WORD COUNT

Number of Pages:
Number of Words: 3000
Word count is exclusive of the followings:
Cover Page
Content Page
Citation and Referencing
Conclusion
Gantt Chant
Tables
Grahs
Titles!"eadings
Confidential Page #
TABLE OF CONTENTS
#$0: %NTR&'(CT%&N $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$3
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#$3: C/C(0/T, C&-T- (-%NG /PPR&PR%/T, T,C"N%1(,-:$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#5
#$4: /N/02-, /N' PR,-,NT '/T/ 7/-,' &N T", %N3&R*/T%&N G%+,N$$#4
5$# +/NG C&*P/N2 W,,802 R,P&RT:$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#9
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5$3: %*PR&+,*,NT T& R,'(C, C&-T-. ,NC"/NC, +/0(, /N' 1(/0%T2:
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$5;
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List of Figures & Tables
3ig#: 3ixed Costs <+anderbilt 500#=$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$>
3ig5: +ariable Costs <+anderbilt 500#=$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$9
3ig3: -emi?+ariable Costs$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$6
3ig4: %nterdeendence of +ang Coman@ deartments <Case stud@ 50#4=$$$$$$$$$$$$$$$$$$$$$$#5
3ig>: +ang Coman@ Condensed %ncome -tatement <500>?5006=$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#4
Confidential Page 5
3ig9: +ang Coman@ Condensed %ncome rate -tatement <500>?5006=$$$$$$$$$$$$$$$$$$$$$$$$$$$$#;
3ig6: -ales vs$ Total Costs 500>?5006$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#;
3ig:: -ales vs$ Gross Profit$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#>
3ig#0: -ales vs$ /dministrative and -elling ,xenses$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#9
3ig##: -ales vs$ Net income$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#9
3ig#5: WeeAl@ Cost Reort$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#6
3ig#3 +ariable cost in 500>$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$#6
3ig#4: NiAe Global Contract 3actor@ WorAers 7@ Region <NiAe.%NC 50#5=$$$$$$$$$$$$$$$$$$$5#
3ig#;: +ang Coman@ %nvestment Center$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$54
1.0: INTRODUCTION
This report will show how Vang Company will calculate their financial, controlling the
cost and develop the business. It will be discussed and explained about:
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1.1: DIFFERENT TYPES OF COST INCURRED IN THE COMPANY
Each company want to start their business or have highest benefit they must clearly
now about their financial and accounting to have right investment, run and develop the
business. !ccounting is also definite the cost and benefit and help the directors or
managers balance it to achieve the goals and earn more money. "nowing about costs
incurred or revenues earned enables management to estimate the profitability of a
product with the cost to run the business in organisation such as departments, services,
and manufacturer. !ccounting also helps the managers run the business in right way,
set the selling price and balance the costs of sale to have highest benefits. #urthermore,
It puts a value to stocs of goods, control $uantities of product for preparing a balance
sheet of the company%s assets and liabilities &'earning (edia )*+*,
Cost accounting is a management information system, which analyses past, present and
future data to provide the basis for managerial action. It provides the information about
elements of cost including: (aterial, labour, expenses- overheads in direct and indirect
cost. It is also divided in #ixed Cost, Variable Cost and .emi/variable Cost these will be
provided in next paragraphs.
1.1.1Cost Classification:
!re the cost incurred in purchase the raw material, labour and e$uipment that
relate to producing finished products or the cost of administration, mareting and selling
product within a company. In other way, It is a cost that manager or director pay to run
their business and it is classified as direct cost and indirect cost.
1.1.1a Direct Cost:
!re the cost that relate directly with the production of goods and services in a
company. These are the basis cost that the manager can measure to pay before they
decide to run a process. It includes direct materials costs0 direct labour costs and direct
expenses.
1irect (aterials Costs:
!ny manufacture company want to produce product they also need to have the
raw materials, the direct materials costs include the direct payment of manufacture to
have the first basis to produce their product
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#or example, with Vang Company the direct materials costs are sil, buttonhole or clothe
dyes. These things are lined and influenced directly with the finished goods of Vang
Company0 which manager should buy to mae T/shirts.
1irect 'abour Costs:
!re included the cost that the manufacture must pay to their employee, manager
and the person or relation elements influence directly during producing the goods. The
direct labour costs in Vang Company are employee and manager 2 fixed salaries, $uality
checing fee and so on.
3ther 1irect expenses Costs:
It involves directly in producing product such as electronic fee to run and produce
a good or the payment of mareting lie advertisements, selling and retail store to sell
their product.
1.1.1b Indirect Costs:
4eside the direct costs, indirect costs or overheads are the cost, which will be
incurred in the course of maing a product, or providing service &'earning (edia )*+*,
that director or the manufacture cannot measure before producing the final product.
These costs also include (aterials, 'abour and 3ther Expenses costs.
Indirect (aterials Costs:
These cost is not relate directly with the producing goods process but it can be
said that is necessary e$uipment to have finished products in Vang Company lie
machines, the safety e$uipment for their employee, the light and so on.
Indirect 'abour Costs:
!re the costs will be appeared during the time employee producing a product or
the cost of administration such as producing a T/shirt, Vang Company must pay the cost
for wrong doing a T/shirt, the wages of inspector, the watch men and so on.
3ther Indirect Expenses Costs:
!re the expenses are not directly lined with the production of a good. These costs are
charged to the final product &5 Essays )*+6,. In other way, these are the cost of rent a
department, the insurance of a factory or the cost for doing extra a product such as fuel
power, electronic or telephone expenses in Vang Company.
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1.1.2Type Of Cost:
The cost is payment of organi7ation to run their processes, it fluent on the number of
finished product. The manager or director will relate to these costs to tae a decision/
maing. The cost can also be classified on how fre$uent they react to production
&5"essay )*+6,
1.1.2a Fixed Cost:
#ixed cost is identified as the unaffected cost during producing product in the
period of time. The payment is calculated by multiple the $uantities of product and the
cost per unit. ! line in the graph below shows the fixed cost in a company:
Fig1: Fixed Costs !"#de$%i&t '((1)
In Vang Company, fixed costs are included rent cost or wages of permanent
worers, these will be not changed in during producing time. These costs will be
identified to manage and control the payment within the company to eep the business
running as well0 if not they can easily mae their business run down and cannot pay the
cost for producing goods.
1.1.2b Variable Cost:
Compare with #ixed Cost, Variable Cost are the changing cost maybe occurred during
producing product in the short run0 which varies with the level of activity.
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Fig': !"$i"%&e Costs !"#de$%i&t '((1)
In manufacturing industry lie T/shirt, Vang Company also cannot involve the Variable
Costs, these costs will occur during producing any T/shirt that the managers or directors
could not see it before. .ometimes they are costs plus for employee to produce a mount
of extra T/shirt, the labour costs or raw materials. Vang Company must count or
calculate these costs to prepare or mae right decisions to develop their business.
1.1.2c Semi Variable Cost:
.emi Variable Cost is composed of a mixture of fixed and variable elements.
These costs will be affected by changes in the level of activity. #or example, the fixed
cost will increase when Vang Company want to produce more 8* T/shirt per employee
they must pay more money on rent cost, electricity cost and so on &'earning (edia
)*+*,
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Fig*: Se+i,!"$i"%&e Costs
!s the manager can see in the graph, it shows about the semi/variable cost in business.
!ctually, Vang Company is a manufacture and they will increase or develop their
business and they also need to produce more T/shirt to supply the customers.
5nderstanding these costs, the manager can balance the price of good and the cost to
produce them then mae Vang Company will also have the best benefits. It is the main
purpose why Vang Company should do calculate these costs.
1.2: THE NEED OF ND O!ERTION CO"TIN# $EDTHOD" U"ED
Through the classification and types of cost the company will use the costing methods
for pricing or stoc valuation. #urthermore, controlling the business is very also important
in any company. Costing methods will provide to managers or directors a full view about
the financial then they can tae or mae the right decision for success of the
organi7ation. If the company taes wrong costing methods, actually it can mae the
business decline so they must improve their business or drawbac the organi7ation.
(oreover, it taes the company more times to adapt and re/develop their company
again. It is the main reasons why Vang Company must choose and use right costing
methods0 which will be discussed in next paragraphs.
1.2.1Job Costin
This method is applied to calculate the cost of orders or re$uests of customers or
partners of the company which are carried out separately for each product. (oreover,
these costs are based on the specific technical characteristics of the customer or the
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goods made separately in a short time. 9ob Costing is commonly used in the
construction and manufacturing industry, because it is based on orders, customers:
re$uirements to fulfill the needs of each individual and group. #or ;ine Company, 9ob
costings include cost of T/shirt order, shirt printing costs for security companies and
bans.
1.2.2 !at" Costin
4ath Costing includes all the fixed cost and variable cost that may arise in the production
of goods. The price of a product is calculated by dividing the total cost per unit. Costing
4ath in ;ine Company is understood as the cost of production of a certain amount of
good in a months or a year. #or example, each month ;ine Company produces +**,***
T/shirt to offer and sell at supermarets, department stores or customers and this cost is
calculated for the entire shipments divided by the number of T/shirts. 4y doing so,
managers can balance the cost to achieve the greatest profits.
1.2.# Contract Costin
Contract Costing and 9ob Costing are similar but the difference is Contract Costing is
long/term costs of orders or re$uirements of customers, the manufacturers and
customers are together bounded by the terms of the contract to meet the needs of two
parties. ;ine Company can apply this method to calculate the cost and different terms of
contract to extend the contracts with stores, supermarets and shopping centers for
many years.
1.2.$ Operation Costin
3peration Costing is also similar to <rocess Costing, in this method, price of products
and costs will be calculated based on the need to implement processes to produce one
finished product. ;ine Company uses this calculation method in weaving clothes, dying
or machinery stage.
1.2.% Ser&ice Costin:
This method is used to calculate the rates and costs of mining company focused and
service providers to meet the needs of our customers as cafeteria ;ine Company,
where worers, employees still use to buy water and food to meet their operational
needs.
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In addition, to the price of the delivered goods, we can also apply the following methods:
Stoc' Val(ation:
!ccording to this method, the actual value of the goods, materials, manufactured
products of any shipment will be based on the number of units of inventory and actual
import prices of goods or materials. This method is applied to the materials and goods
with high value, few species, good management and protection conditions, identified
stable.
!dvantage: identify the value of goods, materials and export products $uicly.
1isadvantage: businesses have to trac and closely manage each export
shipment. This method is not suitable for the companies using a variety of materials,
products and goods because it would be difficult to count and manage.
FIFO )First In First O(t*:
This method assumes that the amount of material, goods, imported products, which are
first imported, will be before the storing products. In other words, according to this
method, the unit price of the first shipment is exported before the next entries until the
$uantity is sufficient.
!dvantage: 1etermine the value of materials and goods $uicly. (oreover, this
method can help the manager balance and ad=ust the price of each product and material
at the present time.
1isadvantage: the manager has to monitor and closely manage the cost of each
shipment, it is not suitable for the enterprises using a variety of materials, products,
goods and many times of import because it will cause difficulties in monitoring, and
managing the cost of each shipment.
+IFO )+ast In First O(t*:
This method assumes the amount of materials, goods and products which are last
imported will be used before the storing products. In other words, according to this
method, the unit price of the last shipment is exported before the first entries until the
$uantity is sufficient. !ccordingly, the actual value of inventory is determined by the
amount of inventory and the unit price of the new entries at time of manufacture.
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!dvantage: 1etermine the price of goods and products in the maret at present.
(anager can continue to calculate the current price and mae the right decision
because input prices of the products will be included in the price of the current time.
1isadvantage: This method can interfere with the operation because the orders
are sometimes too many and the products are not enough to meet the needs of
consumers. 4usiness may have trouble in setting prices for existing products to balance
the price and sales. (oreover, maing changes and decisions will be more difficult
because of price fluctuations can affect the products.
C(m(lati&e ,ei"ted -&erae .ricin:
5nder this method, the actual cost of each type of material, goods, products is based on
the average price of each type of material, product inventory at the beginning and the
value of each type during the period. In other words, the actual cost of materials, goods,
products is based on the amount of inventory in the period and the average actual unit
price.
!dvantage: (anagers can calculate based on the average calculation methods
and data to mae decisions easily and balance the price of the product. This method is
more efficient than #I#3 and 'I#3 because there is no need to calculate costs of each
period and shipments.
1isadvantage: <rices of products are sometimes not consistent with consuming
demand and easy to be affected by inflation.
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1.*: CACULATE COSTS USIN- APPROPRIATE TECHNI.UES:
-ervice rovided
'eartments B 2 C
Producing ? - ? 30D 40D
Producing E P ;0D 40D 30D
-ervice E B ? 50D ?
-ervice E 2 50D ? ?
-ervice E C 30D #0D ?
*arAeting ? ? 50D
General &ffice ? ? #0D
#00D #00D #00D
Fig/: I#te$de0e#de#1e o2 !"#g Co+0"#3 de0"$t+e#ts C"se st4d3 '(1/)
!pply the case study, it can be easily said that the service of department > has )*
percent of the department ? so the cost of department allocation of > @ )*A? B )*.***.
;e can also calculate ? and C by ? @ )*A> B )*.*** and C @ D*A> B +*A? B +*.***.
Calculating:
> @ )*A? B )*.*** &+,
? @ )*A> B )*.*** &),
C @ D*A> B +*A? B +*.*** &D,
#rom &+, and &), we replace fomula &), into &+, we can have result of > is:
> @ )*.*** B )*A&)*.*** B )*A>,
> @ )*.*** B 6.*** B *.*6>
> E *.*6> @ )*.*** B 6.***
)6.*** @ *.FG>
> @ )6.*** - *.FG @ )8.***
Heplacing > @ )8.*** into ? we will have the result ? @ )*.*** B )*AI)8.*** @ )8.***
Heplacing > and ? into &D, we have C @ +*.*** B D*AI)8.*** B +*AI)8.*** @ )*.***
.o the cost of > @ )8.***, ? @ )8.*** and C @ )*.***
The figure will be shown in next table.
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#ig8: service department cost allocations &Case .tuty )*+6,
Tas ):
Direct Materials 120.000
Direct Wages 100.000
Factory Overhead 60.000
Administrative Overhead 56.000
Selling and Distribtion
Overhead !2.000
The #actory 3verhead rate @ #actory overhead - direct wages @ G*.*** - +**.*** @ G*A
!dministrative, selling and distribution overhead is calculated
@ &!dministrative overhead B selling and distribution overhead, - &direct materials B direct
wages B factory overhead,
@J @ &8G.*** B 6).***, - &+)*.*** B +**.*** B G*.***, @ FK.*** - )K*.*** @ D8A
Calculate selling price in )*+*:
#atory overhead @ factory overheads rate I direct labour @ G*AI6*.*** @ )6.***
Total #actory cost @ G*.*** B 6*.*** B )6.*** @ +)6.***
!dministration, selling and distribution overhead @ D8A of total factory cost
@ D8AI+)6.*** @ 6D.6**
Total Cost @ 6D.6** B +)6.*** @ +GL.6**
<rofit cost is )*A total factory cost and )*A total cost
Confidential Page #3


De"artment
s
# $ % Overhead be&ore
allocation
'otal
(ost
)rodcing *
S * +0, -..500 !0, -/.000 -60.000 -.5.000
)rodcing *
) 50,
-12.50
0 !0,
-10.00
0 +0, -6.000 -00.000
-11/.50
0
Service * # * 20, -5.000 * -5.000
Service * $ 20, -5.000 * * -5.000
Service * % +0, -..500 10, -2.500 * -10.000
Mar1eting * * 20, -!.000 -!.000
2eneral
O&&ice * * 10, -2.000 -2.000

100
,
-25.00
0
100
, 25.000 100,
-20.00
0 -150.000
-220.00
0
<rofit )*A total factory @ )*AI+)6.*** @ )6.***
Total Cost @ )6.K** B +GL.6** @ +F).)**
<rofit from )*A total cost @ )*AI+GL.6** @ DD.6K*
Total Cost @ DD.6K* B +GL.6** @ )**.KK*
!fter the calculating we can see that the total cost including expected profit is
M+F).)** and M)**.KK*
1.%: NL&"E ND !RE"ENT DT '"ED ON THE INFOR$TION #I(EN
!ccounting relates to the development of a company, if the manager or directors
do not have right calculation it can influence in the benefit, maing the decisions and
lose the business.


2006 200. 200/
- - -
Sales 150.000 2/5.000 !00.000
3ariable &actory costs *.0.000 *05.000 *120.000
Fi4ed &actory costs *20.000 *25.000 *+0.000
2ross "ro&it 60.000 165.000 250.000
Administrative and selling e4"enses *25.000 *.0.000 *1+0.000
5et income +5.000 05.000 120.000
Fig5: !"#g Co+0"#3 Co#de#sed I#1o+e St"te+e#t '((5,'((6)
To anal@se and have right view to develo business in future. *r$"a 0ong will
Anow about these figures belowF which will be calculated and the cost ma@ include the
following:
The calculation in three @ears is the same$ *r$ "a 0ong can see the rates in 500> as an
examle$
The first calculation is the total cost
The total cost Gvariable factor@ costs H fixed factor@ costs G 90$000 H 50$000 G :0$000
Total cost rate G+ariable factor@ costs ! total salesG :0$000 ! #;0$000 G 0$> G >0D
Gross rofit rate G Gross rofit ! total sales G >0$000 ! #;0$000 G 0$4 G 40D
/dministrative and selling exenses rate G /dministrative and selling exenses !
total sales G 5;$000 ! #;0$000 G 0$#9 G #9D
Net rofit rate G net rofit ! total sales G 3;$000 ! #;0$000 G 0$53 G 53D
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/fter calculating the ercent or rate in each cost will be shown in the table below:


2006 200. 200/
- - -
Sales 150.000
100
% 2/5.000 100% !00.000 100%
3ariable &actory costs *.0.000 *05.000 *120.000
Fi4ed &actory costs *20.000 *25.000 *+0.000
'otal costs *00.000 60%
*
120.000 42% *150.000 38%
2ross "ro&it 60.000 40% 165.000 58% 250.000 63%
Administrative and selling
e4"enses *25.000 17% *.0.000 20% *1+0.000 33%
5et income +5.000 23% 05.000 33% 120.000 30%
Fig7: !"#g Co+0"#3 Co#de#sed I#1o+e $"te St"te+e#t '((5,'((6)
To analyse and control the data easier, manager can review in some graphs below to
mae the right decisions in future and see how the business was developed.
Fig6: S"&es 8s. Tot"& Costs '((5,'((6
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Fig9: S"&es 8s. -$oss P$o2it
.
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Fig1(: S"&es 8s. Ad+i#ist$"ti8e "#d Se&&i#g Ex0e#ses
Fig11: S"&es 8s. Net i#1o+e
These graphs show how Vang Company runs their business. (r. Na 'ong can easily
analyse that the business was developing and increasing the revenue through Oross
<rofit and Pet Income. #urthermore, as we can see in the total cost and .ales, the cost
reduced from G*A to DKA. It means Vang Company can save the cost but also develop
it to have more benefits for company.
'.1 !AN- COMPANY WEE:LY REPORT:
In this report, Vang Company can see the detail about the cost and their revenue then
control or manage the business to approach the goals in future and develop their
business also.
Confidential Page #9
Sl. 5o. )articlars 200/ 6-7 6,7 Wee1ly 84"enses
1 Sales 150000 100,
2 3ariable "rod cost *.0000
291 Material cost *+5000 *6.192+2/.6.
2.1.1 Direct material 6cloth7 *2!500 *!609/6+01+.
2.1.2 :ndirect material cost *10500 *2019+60/6+
292 ;abor cost *21000 *!029.+0.26
2.2.1 Direct labor cost *16/00 *+229101./0/
2.2.2 :ndirect labor cost 6S"ervisors7 *!200 */095!.0!521
29+ 'ele"hone charges *.000 *1+!92!65.5+
29! 8lectricity bill *.000 *1+!92!65.5+
+ Fi4ed "rod cost *+0000 *5.59+!2!65/
+91 <ental o& bisiness "remises 61000- "er S= &t7 0
+92 Maintenance cost o& tools9 >igs9 &i4tres 0
! 'otal (O2S *00000 60, *1.26902.+0.
5 2ross "ro&it 60000 115096/!0+2
6 Admin9 Selling ? Other 84"enses *25000 1., *!.09!5205!/
691 Sales commission *2500 *!.90!5205!/
. 5et "ro&it +5000 2+, 6.192+2/.6.
Fig1': Wee;&3 Cost Re0o$t
The cost will be shown in the grah below:
Fig1* !"$i"%&e 1ost i# '((5
3rom the grah. +ang Coman@ can anal@se and taAe the decision to minimiIe the costs
and maximiIe the rofit for their business$
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2.2: !ERFOR$NCE INDICTOR INDENTIF& !OTENTIL I$!RO(E$ENT":
/lthough the manager had a lan to do sometimes. in the real business the@ have
to be influenced b@ cost variances$ These are the costs that manager cannot saw and
guested before the lanning a rocess$ Without monitoring the use of resources or
controlling the coman@ to maAe decisions for the future. a business can be harmful and
eas@ to go down because the variances$ 7udget should be reared for each resonsibilit@
centre to Aee the business continuous$
Nowada@s. the cometition and economic are changing da@ b@ da@. if coman@ or
organisation want to survival and success the@ must secifies clearl@ about the
roductivit@. efficienc@ and the effectiveness$ This is the wa@ for an@ organisation and
+ang coman@ also if the@ want to develo the business$ 3irst. the@ must imrove their
roductivit@ from the sum of effectiveness and efficienc@ or b@ the wa@ of increasing the
effectiveness and efficienc@ roductivit@ also increase$
2.2.1 .erformance meas(re for t"e Cost centres:
The roductivit@ can be anal@sed b@ calculating the outut ! inut. the cost er
unit or the indices$ / successful rocess can be identified b@ the seed of how a roduct
will be roduced$ %f the outut increases. the roductivities will also increase$ 3or
examle. the labour roductivit@ in +ang Coman@ are the Juantities of roduct that an
emlo@ee or a store of +ang Coman@ will roduce and the outut or the income will be
more than amount of achieve goals$ /s we can see in the grahs before. *r$"a 0ong can
see easil@ that the rate of -ales vs$ Total Costs decreased$ %t means that the +ang
Coman@ saved the cost from 0$> K er unit to 0$36K er unit and the Juantities of unit
roduced also increased from #;0$000 to 400$000
/s we can see the indices also increased from 500>?5006. as Total Costs were
increase more than >9D b@ calculating <Total Costs in 500> ! Total Costs in 5006= x
#00D it means that the a@ment will also increase$ %n this case. the manager should
exand their business b@ roducing more units to get the benefits$ 7esides. the Jualit@.
resources or the comletion will affect the coman@$ %f the@ can imrove the Jualit@. save
costs. training emlo@ee and exand the business the@ will achieve easil@ the goals$
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3urthermore. it can be Anown as the effectiveness. if +ang Coman@ can maAe
and taAe the right decisions and do the thing in the right wa@ the@ can assess the
efficienc@$ Therefore effectiveness is the liabilit@ of the coman@ to achieve the set
targets and obLectives$ %f the outut in terms increase it means that the coman@ is getting
the efficienc@$
3or examle
2.2.2: .erformance meas(res for t"e re&en(e centers:
These 8P%s will show to manager how a business can sul@ or meet the
customer demand. not onl@ the Juantit@ but also the Jualit@ of roduct and how much the
revenue or benefit the@ will be received from that$ To anal@se and Anow more clearl@. the
manager will looA at and anal@se the data about customer reLects! returns. deliveries late.
flexibilit@ measures. number of eole served and seed of service. customer satisfaction
Juestionnaire$
%n an@ business. customer is la@ing an imortant role in contributing the revenue
for the organisation or the coman@. if director or manager can meet their customerMs
demands and maAe them satisfies then the@ can earn the rofit more and easier$ /s *r$
"a 0ong can see that the Jualit@ or the total sales was increasing in three @ears from 500>
to 5006 <#;$000 E 400$000= it means that the business was exanded and growth and also
met the customer reJuirement$ 3urthermore. the more roduct the@ roduced. the more
roduct sul@ for their customer$ +ang Coman@ can ut their T?shirt in retails. stores
or suer marAets that the customer can bu@ easier or have relationshi with Transort
Coman@ to sul@ and delivers T?shirt JuicAl@$ %f the business is develoed. +ang
Coman@ can attract or influence customer using or launching their new roducts and
also comete with other cometitor$ The@ can receive the customer satisfaction
Juestionnaire b@ using surve@s. customer care deartment and customer meeting monthl@
or @earl@$
3or examle. in NiAe Cororation. the@ tried to aroach of NrisA mitigationO$
3urthermore. the@ also alied to use significant resources and focus on monitoring and
environment imrovement b@ creating new rograms <NiAeResonsibilit@ 50#5= through
these rograms not onl@ the emlo@ees can imrove their labour sAill and worA more
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effective but also the coman@ can save the cost for roducing and increase their roduct
Jualit@ such as in administration. worAing and deliver@$ *oreover. NiAe have man@ store
and have contracts with man@ sulier around the world. it hels them to exand the
business and sul@ roduct to customer in an@where$
Fig1/: Ni;e -&o%"& Co#t$"1t F"1to$3 Wo$;e$s B3 Regio# Ni;e<INC '(1')
3inall@. NiAe is a good sort brand and we can see in the figures that the@ have man@
factories and worAers that mean the roduct can be roduced and sul@ for customers
fast$ The more worAers the@ have. the more roducts will be roduced so it can be said
that NiAe roductivit@ is high$ NiAe also have web age. fan age. customer care and
man@ other deartment that the@ can receive and fix the customer satisfaction and
Juestionnaire$
2.2.# .erformance meas(re for profit center:
/s we can see in the table in Juestion 5$# *r$ "a 0ong can discuss and anal@se
easil@ about frofit center$
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3ig: -ales vs$ Gross Profit
The development in Vang Company be continued discuss in the comparison
between .ales and Oross <rofit, the profit increase from 6*A to GDA and tae D-) the
Oross <rofit in )**G. 4esides, the number of .ales also increases in the several years
from +8*.*** to 6**.***. It shows that the $uantities of product were produced for
customers, suppliers of Vang Company increased. In economic, the more $uantities of
product you produce, the more benefit you will earn. It can be said that Vang Company
completed this target and balance the cost to have benefit for company.
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3ig: -ales vs$ /dministrative and -elling ,xenses
The .elling Expenses also increase because company must pay the cost for
their employee to sell the product or pay for the retail, store in supermaret and so on.
;hen the business has more benefit, the manager will expand it to other place. It is the
reason why the selling expenses increased0 but in general, these costs were not
significantly compare with gross profit or the net income0 which will be analysed in next
paragraph.
3ig: -ales vs$ Net income
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It can be seen clearly that the Pet income will be calculated by taing Oross
<rofit plus !dministrative and .elling Expenses. #or example, the Pet income in )**G is
calculated @ G*.*** B &/)8.***, @ D8.***. Then, the manager can see that in )**K, the
Pet income decreased because the costs in !dministrative and selling expenses
increased +* percent more than )**G to )**L &DA, so it effects on the net income. The
manager in Vang Company and (r. Na 'ong must control these costs and analyse to
mae the decisions in right moments and balance the payment and income to have
highest benefits, develop their company and also saving costs as much as possible. #or
example, reducing the wasting costs of electronic from machines, light or apply more
selling solutions to selling more effective.
).).6 <erformance measures for investment centres:
H3I is called as Heturn on Investment. These data can show how effective
investment that company invested and profit they receive. In other words, it is the rate
between profit - capital employed. Capital Employed @ Total assets E Current 'iabilities @
E$uity B Pon/current 'iabilities &Headyratios )*+6, through H3I can help (r. Na 'ong to
analyse the business and also release how much investment they can put to have a
most effective business and run as well. It relates to revenue and profit also if the
manager taes right decisions.
In Vang Company, (r. Na 'ong can reference this data in )**G and )**L as an
example:
)**G )**L
<rofit 8*.*** L8.***
.ales +8*.*** )K8.***
Capital Employed 8**.*** )8*.***
H3I +*A D*A
Fig1=: !"#g Co+0"#3 I#8est+e#t Ce#te$
!s we can see in the table that the invesment of Vang Company is effective and eep
the business grow because the rate of H3I is increased. In )**L the manager invested
)8*.*** M but they can have L8.*** M in profit the wor is more effective than )**G that
they put 8**.*** M in Capital Employed and got the <rofit 8*.*** M. Investment Centres
plays an important role in any organisation because if the manager do not now exactly
how they must to invest or cut down the money the business can be detroyed by wasting
money or lacing of money for producing in manufacture and so on.
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2.): I$!RO(E$ENT TO REDUCE CO"T"* ENCHNCE (LUE ND
+ULIT&:
In the recent years, the $uality of product was improved by many new
management techni$ues. It was contributing parts advanced for $uality management
activities such as system Qcorrect time for mediumR &9ust In Time,. It is the basis of Total
Suality (anagement.
TS(ETotal Suality (anagement is a management approach of an organisation,
$uality/oriented based on pro=ected participation of al members and bring about long/
term success through customer satisfaction and benefit of all members of the company
and society. The goal of TS( is to improve product $uality and customer satisfaction at
best allowed. The feature of TS( method compare with previous $uality management is
TS( provides a comprehensive system for the management and improvement of all
aspects related to $uality and mobili7e participation every department and every
individual to achieve $uality targets set. Vang Company can apply this system to
improve their product $uality and also enhance the value. !ctually, TS( is a mix of
Suality Control and <roductivity Control to approach goals is lead to have Q4est Suality
<roductR. Vang Company can also apply many management methods such as self/
control or management by fact. It is not only saving the costs for company but also they
will have a synchroisation in all departments. #or example, Vang Company will have
close relationship between manufactures and selling or administration department0
through TS( managers can control, follow the business trend and tae the decisions
easier and more effective.
It can be also said that in Pie, they had applied the TS( in all their business,
they have more than F** contract factories, + milion worers and more than 8**.***
different products but their $uality of their product are also good because they shape
sustainability solutions. !nother reasons are the business will be influenced by outside
factors such as competitors, government and customer. They realise that if they produce
a best product for customer they can also compete with competitors and also attract
more customer and improve product $uality. TS( also focus on the enviromental in
manufacture to save and have healthy products &Pie,IPC )*+),. #rom that, Vang
Company can apply these methods for their business. They can improve their
administration, manufacture management and also improve the $uality of T/shirt by
improving their employee%s sills, tae decisions about location, suppliers, and
warehouses. ;hen the $uality is good, it means that the business will have more
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customers and the revenue also. It is the reason why Vang Company should apply and
run TS( in their business.
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).0: CONCLU"ION
!fter calculating and analysing we can be said that financial is very important for any
company0 which want to develop and minimi7e the cost. Through this, the manager can
also manage and control the business trend. Vang Company is an example0 which show
how to develop a business to compete with other competitors and attract more
customers.
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%.0: REFERENCE"
3wen Vanderbilt &)**+, Cost Volume <rofit !nalysis T3nlineU available from
V htt"@AABBB2.oBen.vanderbilt.edA2ermain.CoerAmgt!1+Acv"Acv".htmlJ T)8
(arch )*+6U
Pie Hesponsibility &)*+), (anufacturing T3nlineU available from
V http:--www.nieresponsibility.com-report-content-chapter-manufacturingJ T)K
(arch )*+6U
Iam sam hubpages &)*+6, (ethod of Costing and Types of Costing T3nlineU available
from
V http:--iamsam.hubpages.com-hub-(ethods/of/CostingJ T)K (arch )*+6U
5" Essays &)*+6, 1ifferent types of cost T3nlineU available from
V http:--www.uessays.com-essays-accounting-different/types/of/cost/that/
an/organi7ation/would/incur/accounting/essay.phpJ T)8 (arch )*+6U
;ord <ress &)**K, TS( definition T3nlineU available from
V http:--n$center.wordpress.com-)**K-*6-)*-$uan/ly/chat/luong/toan/dien/t$m/
la/gi-J T)L (arch )*+6U
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