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Finance and Accounting for MacLeish Nurseries - Essay Example

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The reporter states that MacLeish nurseries need to pursue a course of action that would ensure the company increase their turnover and increase the profit that it posts. This would facilitate the repayment of the loan and increase the earnings that shareholders can get for their capital…
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Finance and Accounting for MacLeish Nurseries
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Finance and Accounting MacLeish nurseries need to pursue a course of action that would ensure the company increase their turnover and increase the profit that it posts. This would facilitate the repayment of the loan and increase the earnings that shareholders can get for their capital. In this case, I would recommend that MacLeish increase the advertisement cot be $800, as this would lead to an increase in the sales in quarter four by $ 2000. This in itself would ensure that the $18 million targeted turnover is realized.

MacLeish should further lower the selling price of their products to result in an increase in the sales level by 4%. By decreasing the selling price, MacLeish will be in a position to increase the amount of profits that it would report in the financial statements hence increase their ability to increase the amounts of their loans and be in a position to make the repayments. I therefore recommend that MacLeish increase their investment on advertisement and lower their prices to benefit from the elastic demand nature of their products.

Bedford property management just like any other company must undertake variance analysis as a way of managing their costs and ensuring efficiency. In the calculation below, it is evident that the company has recorded adverse variance in all areas and the management must therefore move with speed to control to take corrective actions. In the case of labor cost variance, Ms. Kim should ensure that close supervision is conducted to eradicate the inefficiency. At the same time, Kim has to reduce the rate per hour rewarded to the workers.

The variances with regard to the number of respondents must also be corrected to increase the turnover. Management has to increase their marketing strategies to ensure the number of customers served increase to remove the adverse variance. The rates charged to the clients should also be as per the standards to eliminate the rate variance. Finally, the management has to control their overhead costs by reducing the expenses like rent, maintenance, and insurance to eliminate over expenditure. In conclusion, variance analysis should be carefully done to ensure profitability and success.

AppendixActual no responded to=10000Actual rate= 100Budgeted no of respondents= 15000Budgeted rate=110Budgeted hour=2Budgeted cost per hour=25Actual hours= 25000Actual cost per hour=30Fixed overhead budget=100000Actual overhead= 125000Service quantity variance= (actual respondents-budgeted respondents)*budgeted rate = (10000-15000)110 =550000 (adverse) Respondent rates variance= (actual rate- standard rate) actual respondents = (100-110)10000 =$100000 (Adverse)Labor cost variance= Actual labor cost- standard labor cost =25000*30-10000*2*25 =250000(adverse)Labor efficiency variance= (actual labor hours-standard labor hours) Standard rate = (25000-20000) 25 =125000Labor rate variance= (actual rate-standard rate) actual hours = (30-25)25000 =125000 Total Fixed overhead variance = actual overhead- budgeted overhead =125000-100000 =25000 (Adverse)

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