Bathurst Engineering Ltd Makes Extensive Use of Financial Performance Reports

question 2

Essay

Bathurst Engineering Ltd makes extensive use of financial performance reports for each of its departments.Most departments have been reporting favourable cost variances with the company's current inventory system.However,management is concerned about the overall performance of the purchasing department.For example,the following information is for the purchasing of materials for a product the company has been manufacturing for several years:
$$\begin{array} { | l | l | l | l | } \hline \text { Purchase Year } & \text { Quantity Used } & \begin{array} { l } \text { Average } \\\text { Inventory }\end{array} & \text { Price Variance } \\\hline 2013 & 00000 & 12000 & \$ 1000 \mathrm {~F} \\\hline 2014 & 90000 & 22500 & 10000 \mathrm {~F} \\\hline 2015 & 30000 & 30000 & 12000 \mathrm {~F} \\\hline 2016 & 75000 & 18750 & 30000 \mathrm { U } \\\hline 2017 & 31000 & 27000 & 3000 \mathrm {~F} \\\hline 2018 & 37000 & 34800 & 9750 \mathrm {~F} \\\hline\end{array}$$
Required:
a.Calculate the inventory turnover for each year.Can any conclusions be drawn for a yearly comparison of the purchase price variance and the inventory turnover?
b.Identify problems likely to be caused by evaluating purchasing only on the basis of the purchase price variance.
c.What recommendations will improve the evaluation process?
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Distinguish between consumer needs, wants, and demands in the context of marketing.

Identify strategies for effective marketing communication and promotion.

Understand the concept of target markets and how organizations direct their marketing program towards specific groups.

Identify the four components of the marketing mix (product, price, promotion, and place) and their role in solving marketing problems.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.

Operating Data

Operating data consists of the information related to the day-to-day operations of a company, helping in the management and optimization of its business processes.

ROI

Return on Investment, a financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Controllable Margin

The net operating income after variable costs are subtracted, highlighting what management can influence directly.