IGCSE & A LEVELS GUIDE

Chapter 32 - Budgets Lesson Objective: To understand how to perform variance analysis It is obvious: budgets are controlling tools : At the end of every budget period there needs to be an assessment comparing the company's aims and the actual performance . This process is called budgetary control . Any differences found between the aims and the actual performance are to be investigated . This is called variance analysis and it's an important part of budgeting for several re

Chapter 15 - Production of Goods and Services Lesson Objective: To understand the difference between production and productivity Throughout the next couple of blog posts we will discuss operations management, more specifically, production : The question remains: What is production? Production is the process of converting inputs (what is inputs?) such as land, labour, and capital into sealable outputs/goods (e.g. shoes). There is one department of business that is responsibl

Chapter 32 - Costs Lesson Objective: To understand the difference between full-costing and contribution costing Let's get started with the two costing techniques we are up to discuss by looking at: 1. Full Costing Technique (Absorption Costing) : a technique in which all fixed and variable costs are allocated to products, services, or divisions of the business On this technique the total overheads is divided between each product and cost centers on the proportion of total di

Chapter 32 - Costs Lesson Objective: To understand the basic concepts of costs before learning costing techniques What are the reasons cost data/information is so important for businesses? Why should managers have accurate cost data? Cost data is important for various reasons: Costs aid on pricing decisions ; Costs are also important for production decisions: Whether to stop the production of a product; Whether to increase production ; Whether to implement new methods; Wheth

Chapter 30 - Forecasting and Managing Cashflows Lesson Objective: Managing inflows and outflows Having Cash Flow Problems is obviously bad for businesses. But what are the main reasons causing these problems to happen in the first place? Lower inflows and/or increased outflows: - Poor Credit Control : sometimes payments need to be chased after; - Long Credit Terms to customers ( payables ); - Unplanned/Fast Expansions : those are costly investments that just yield revenues o

You should know by know the different course of action businesses can take when operating with short or long-term excess capacity . You are also familiar with the problems of operating at full capacity. What are the different possibilities for a business when operating at full-capacity ( capacity shortage )? Increase Capacity by acquiring more production resources such as land, capital, and labor; Increasing capacity can be beneficial as it increases long-term capacity , en