Revision question on how to calculate break-even point and margin of safety.

Revision question on how to calculate break-even point and margin of safety

Bonne Bia limited is a newly formed company in the catering business founded by Kate and Paul Johnson. Kate and Paul have considerable experience in the food industry and saw an opportunity to establish a food/beverage business to service the tourist market during the four months from May to August. The business will be located in Wexford and permission has been obtained from Wexford County Council (WCC) to operate a food/beverage outlet near Curracloe beach. At present Kate and Paul are trying to decide between two possible food/beverage options. Pertinent information relating to each of the options is shown below. Initially, Kate and Paul intend to operate the outlet themselves without employing any other staff. read more

Functional budget – meaning and example.

What are duties of internal auditor?

The functional budget is one that relates to any of the functions of an organization. The number of functional budgets depends upon the size and nature of business. The following are the commonly used: read more

Budget manual – meaning and content.

Budget manual - meaning and content.

A budget manual is a document that sets outstanding instructions governing the responsibilities of persons and the procedures, forms and records relating to the preparation and use of budgets and it is a booklet containing standing instructions regarding the procedures to be followed and the time schedules to be observed. read more

Revision variance – meaning

Revision variance - meaning

Revision Variance is the amount by which a budget is revised but which is not incorporated in the standard cost rate as a matter of policy. The standard costs may be affected by wage rate changes after wage accords, fiscal policy etc. The standard costs are not disturbed to account for these uncontrollable factors and to avoid the amount of labor and cost involved in revision, the basic standard costs are allowed to stand. It is essential to isolate the variance arising out of non-revision in order to analyze the other variances correctly. read more