Management accounting Essay Example | Topics and Well Written Essays - 1500 words - 7

Management accounting - Essay ExampleThis is a growing commercialise as evident from the fact that 85 billion is spent annu anyy on UK tourism, especially London. just about 50 % of this is by overseas visitors and the rest are by UK residents in day trips and staying away from interior(a) (UK-Culture, 2007). The book impart be marketed to both the tourists and business visitors alike, as business tourism is also sightly increasingly common. In 2005, business tourism accounted to about 8 million visits to London (UK-Culture, 2007).The shareholders of the company will invest 5,000 for the company. Another 30,000 will be taken as a long term loanword from the family with instalment payments starting from the third socio-economic class with a standard point of 0 % and in a period of 9 years. A loan of 25,000 from NatWest bank will be availed at an interest rate of 6.4 % APR.The estimated sales for the initial year of operations are about 6,173 units. This amounts to an averag e sale of 515 units per month in the first year. The tourist industry in London is always active and the company estimates to sell all of the 515 units produced in the month irrespective of the season. The sales volume is presented in Appendix 2.The cash for the sales make in the month are collected within the end of the month (i.e., within a upper limit period of 30 days). This way, the company will be able to maintain effective liquidity. The suppliers will be paid in two instalments, 50 % on purchase date and the remaining 50 % later on 30 days.The books will be made based on a just in eon strategy, thus reducing the inventory to zero. This will enable the company to effectively safe on fund costs as well. A total of 6,173 units will be sold in the first year and there will not be any closing stock in the monthly budget, as all the 525 units manufactured in the month will be sold. The initial inventory will be zero at start