Accounting Answers

Mr Zoo is planning to set up a mini Zoo in Howick.

The following relates to different pricing plans of visiting the zoo and costs of running the zoo.

Pricing Plan 1 - $30 per person (a special pack will be included)
Pricing Plan 2 - $25 per visitor (the special pack not to be included)

Variable Costs per visitor

Special Pack - $8
Zoo Consumables - $7
Zoo Expenses - $2

Total Fixed Costs - $200,000


REQUIRED: Study the information above then answer the following questions.

Using the CVP formula, calculate the number of units (and its dollar amount) for achieving
Breakeven
A profit of $30,000 for both plans.
Calculate the Contribution Margin ratio for both plans.
Describe the meaning of Contribution Margin ratio.
Explain the relationship between Contribution Margin ratio and Number of Breakeven units.
Explain why it is important to calculate Margin of Safety.

Differences between cash, revenue and expenditure. Provide an example of each category and which budget/s it is relevant to preparing.

Describe the role that performance indicators could have achieving organisational success and compliance with organisational internal controls.

What role does the ASX play in assisting corporate governance in Australia?

Is consultation always necessary before the timetables for the implementation of corporate governance requirements are developed?

How will a business determine the correct establishment of lodgement schedules?

Explain what internal controls mean in terms of reporting

The preparation, effort and care that goes into a report should reflect its usage. Comment on this statement.

Why is it necessary for boards to delegate financial responsibilities or accountabilities? Is there a difference between responsibility and accountability in this context?

The board is concerned about the internal control procedures currently in place. Why is it important that these be reviewed and, if necessary, modifications made?