Activity 4 (1)




Activity 4 (1)

Class Activity 4

Financial cost analysis

  • Before you can cost products or services effectively, analysis of what costs is required?
  • Product cost is different from sales price. Product cost is simply the cost of a single unit of product. You may wonder how a Gucci bag or a can of Coca-Cola is priced. Well, it’s all because of product cost analysis. By having the product cost analysis, you’ll be able to at least get the most accurate cost of your product even in the tourism industry.
  • Give an example of a packaged tourism product and describe the individual components.
  • For each component describe the direct and indirect costs.
  • Explain the difference between fixed and variable costs.
  • Fixed costs:
  • Variable costs:
  • Budget Analysis

  • What is budget deviation analysis?
  • Give at least 5 examples of where budget variances could occur.
  • Why do you think variances occur?
  • Why is it necessary to regularly check actual income and expenditure against budgets at regular intervals?
  • How often should this be carried out?
  • Classify the following into indirect or direct costs to a business, and advise whether they are fixed or variable costs:
  • Stock
  • loan payments
  • ......

    Activity 4 (1)
    Last updated: Sep 2023

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    loan payments

  • equipment
  • transport costs
  • packaging
  • wages
  • petrol
  • marketing
  • stationery
  • worker’s compensation
  • Variance Exercise
  • Look at the following revenue statement for a café for the first quarter of 20XX. Using the figures shown, calculate the missing items. Fill in ‘F’ for a favourable variance (i.e. an increase) or ‘U’ for an unfavourable variance i.e. (a decrease). Calculate the missing items and fill in your answers.

    March 20XX

  • Add the budget figures to an XL spread sheet and insert another month – April.
  • Include Variance, % and F/U

  • Add an advertising expense $5,000.00
  • Increase revenue by 35%
  • Food supplies increased by 5%
  • What has changed for the cafe in the month of April
  • What was the trigger that caused this variance?
  • Deviations can be considered under the heading of: Give your understanding for these terms.
  • Unforseen
  • Foreseen
  • Excessive deviations
  • ...

    Activity 4 (1)
    Last updated: Sep 2023

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