Business Plan Progress Can and Should Be Measured Throughout the Year.Discuss

question 70

Essay

Business plan progress can and should be measured throughout the year.Discuss three controls that help track progress.(Students can discuss any 3 of the following six)
A.Inventory control.By controlling inventory,the firm can ensure maximum service to the customer.The faster the firm gets back its investment in raw materials and finished goods,the faster that capital can be reinvested to meet additional customer needs.
B.Production control.Compare the cost figures estimated in the business plan with day-to-day operation costs.This will help to control machine time,worker hours,process time,delay time,and downtime cost.
C.Quality control.This will depend on the type of production system but is designed to make sure that the product performs satisfactorily.
D.Sales control.Information on units,dollars,specific products sold,price of sales,meeting of delivery dates,and credit terms is useful to get a good perspective of the sales of the new venture.In addition,an effective collections system for accounts receivable should be set up to avoid aging of accounts and bad debts.
E.Disbursements.The new venture should control the amount of money paid out.All bills should be reviewed to determine how much is being disbursed and for what purposE.

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Definitions:

Monthly Dollar Sales

The total revenue generated from sales in a particular month, measured in dollars.

Unit Variable Cost

The variable cost incurred to produce one unit of product, including direct materials, direct labor, and variable manufacturing overhead.

Monthly Sales

The total revenue generated from the sales of products or services within a month.

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding income and expenses from unusual or non-operational activities.