1.1
(1) The cost varience report is a listing of allowable expenses compared with the actual expenses incurred. (2) The actual unit cost is the cost of producing a single products or unit measure of output or service. The budget unit cost is a plan or forecast, of a single unit measure of output or service. The conclusion is that the cost of goods and services is more expensive. (3) The cost variable report can assist you to select the right cost by giving you the list of all the expenses and allowing you to choose which expenses to cut that may be less important.
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e.g the cost varience report may have electricity bill, goods and office refreshments. The list may help you decide which cost should be cut, in this case it would most likely be the office refreshments. 1.2
(1) the company is currently running at a loss R3000.00 loss. (2) Cash paid for operations costs (3) The business runs a lot on operations so it needs a lot of financing on that department.
(4) Inventory is the raw material and products held in stock by a company in anticipation of future sales. (5) The difference between the cash flow statement and the income statement is that, the profit in the income statement is not the same as cash. Some of the items contributing to the profit have not yet been turned to cash and cannot be used to pay short-term debt. The cash-flow statement indicates whether the company is could pay all its debts for the year. It shows whether the company has enough cash flowing in to cover the required outflow. 1.3
(1) –Cash paid for inventory
– Cash paid for other operations
-Cash paid for insurance
-Cash paid for selling
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(2) – Postpone spending. Spending is postponed to some date in the future when the need to cut costs is not as urgent. – Plug leaks. One of the tasks of the first-line managers is to find out where expenses are leaking through the controls, and then plug them up.
Question 2
Product or service, that is, the product being developed and produced or the service being offered. In developing the product/service strategy the organization should consider the following: (1) The choice of service/product and the scope of the product/service range. If it is possible for an insurance company to offer a range of products in a specific category. (2) The feature of the product/service, such as design, style, size, colour and functionality.
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(3) The packaging of the product. Packaging serves two purposes, namely promoting and protecting the product. Packaging design can contribute to increased sales and is a vital part of the marketing strategy. (4) The branding of the product. Branding refers to the use of a brand name, term, symbol or design to distinguish the product from all other products. (5) Which products will be purchased or manufactured by the organization. (6) Service(s) to be offered to the customers and at what price. Price setting and pricing strategy.
the price that a customer pays for a product or service should be comparable to the value of the customer or the benefits received by the customer from using the product or service.
(1) Price setting
The service of the product provider decides on the most appropriate price for the service/product. The price must cover the total cost plus some profit margin. (2) Pricing strategy
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Apart from taking cost into consideration when determining the price, you should also consider the market characteristics and the organisation’s current marketing strategy. These pricing strategies are found in the business environment and take the factors following into consideration: Penetration pricing. Services or products are priced below the usual long-term market price in order to gain market acceptance more rapidly or to increase existing market share. -Skimming pricing.
Prices of services or products are initially set at higher levels for a limited period of time and then reduced to more competitive levels. -Follow-the-pricing-leader. The price is set by a particular competitor are used as the guidelines for setting a price for a service or product. -Variable pricing. Even thore a uniform price is advised, this pricing system allows you to offer price concessions selected customers for a variety of reasons. Flexible strategy. This takes into consideration special market conditions and competitor’s pricing practices.
Promotion strategy
to promote the organization and its services, the organization has to communicate with the existing customers and the potential customers. The purpose of marketing communication is as follows: (1) To inform the customers about the service and products (2) To persuade the customers to make use of such services and purchase the products or services. (3) To remind the customers to continue purchasing the products or services. The promotion mix consists of 5 elements:
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(1) advertising is paid-for communication related to the service, product or idea in different forms of media, namely the print nedia, radio, television, and outdoor billboards. (2) Personal selling is the oral presentation of information about a service, product or idea to one or more potential customers. (3) Publicity is free communication to influence consumers through the publicity media such as the press, radio and television. (4) Sales promotion complements the advertisng, personal selling and publicity to transmit the message to the potential consumers through the use of handouts, free samples and promotional gifts. (5) In direct marketing communication is aimed directly at the target market to elicit a response. Question 3
1)
2) Gannt charts are used to display the project master schedule and detailed task schedules. It can only be drawn up after work breakdown structure analysis has been completed as the work packages are used for the scheduling.