Management Accounting Assignment detailing bookkeeping procedures used by Pacific Telemet Ltd and Go-Go-Grow Ltd

Question:

What specific bookkeeping methods and software do Pacific Telemet Ltd and Go-Go-Grow Ltd employ to record their financial transactions?

Answer

Answer 1- Pacific Telemet Ltd.
Specific Telemet Limited is a business organization producing smartphones with dual SIM cards and this product of the company is very popular among the executives that are traveling overseas on a frequent basis. According to the current pricing strategy of the company profits made by the company are as follows-

Board of director has pressurized chief executive officer of the company to increase the sales in an incoming financial year. For this purpose, three managers have proposed two different kinds of strategies. Evaluation of these strategies is as follows-

The strategy of production manager David Groate : Production manager has suggested increasing the overall advertisement expenses by $60,000 along with increasing the quality of products. Increasing the quality of the product will also increase the variable cost by $36 per unit. After this strategy the profitability of the company will increase and revised the statement of profitability is as follows-

Based on this profitability statement, it can be concluded that the company's overall profit has improved by 10% compared to its initial profitability. Given that the scenario's contribution margin is 52% and fixed costs are $1020,000, break-even revenues would be $1961538. Break-even revenues in this case are much lower than the $5520000 in sales the company made during the previous fiscal year (Weygandt, Kimmel &Kieso 2015). Based on this study, it is possible to say that this idea is very promising if it is anticipated to have a favourable effect on the company's total profitability. Before implementing this plan, the chief executive officer should have a look at key flaws. Finding a successful advertising strategy is crucial for the business if it wants to improve sales by 30%. It is extremely challenging for a corporate organisation to increase 30% of its sales in a year using simply advertising expenses (Noreen, Brewer & Garrison 2014).