Financial Analysis

Financial Analysis

Introduction

The Report basically deals with the costing procedure and break down of the excavation of 25 km of trench, and the laying of concrete pipes (supplied and delivered by others) in the excavated trench. The project details will be explained in detail, however it must be taken into account the report includes both the scenarios presented in the case study including the overall analysis of the field of case study and he objects being used in it. The problem involves the comparison of the cost of two alternative approaches to the excavation of 25 km of trench, and the laying of concrete pipes (supplied and delivered by others) in the excavated trench. Backfill excluded. In both cases Time based indirect costs = $ 1500 / week, Escalation rate of 6 % per year, Labour costs per shift hour are:



Foreman $ 35,

Tradesmen /operators $ 30,

Laborers and

other workmen $ 28.

Both options work nominal 8 hr day / 6 day week

Cost of small tools used by work force - allow 2% of direct labour costs (include as a Fixed cost). Round off durations to full day.

Discussion

In today's market conditions significantly complicates process of enterprise management, which allowed full economic and financial independence. Economic self-sequence is to choose the organizational form of the enterprise, activity, business partners, and the definition of market products. Financial independence of the company lies in its full self-financing and the development of financial strategies. Therefore, become more complex and the challenges facing the system accounting becomes inevitable emergence of management accounting as a separate branch of accounting activity. The costs incurred to perform an activity, a project, a company, it is called relevant costs, which are the direct costs of an election, and are of two types: fixed costs that are decoupled from production, this is, are independent of the scale of production, produce or not, such as rent or lease payments on a car. The costs vary in direct proportion to the scale of production of the company are called variable costs.

Cost of Production

Despite all the innovations in technology that daily managing, and facilitate the classification of costs, there are still organizations that have failed define a suitable cost system, which from its needs, they can generate key success factors for good decision-making. Accounting has long had three main industrial application, a financial one and administrative costs. Companies then should know that the cost accounting, allows analysis and presentation of information, which provides the financial accounting and non-financial related all costs of acquiring or using resources in organizations. Thus, the cost can be considered or used to achieve a specific target. A major classification is as actual cost and budgeted cost, being one of the most used and easy to distinguish. For companies know how they affect the actual performance of the company is strategic, because I can be overestimating the budget, which could mean an actual decrease cash and inventory increase incurring other unplanned costs.

For managers and administrators, it is easy ...