Scribd Logo
Upload

Welcome to Scribd!

  • 326 views

    U7 Spreadsheet 01

    Uploaded by

    munshif Ahmed
    Telford Engineering reported $1.44M in net profit on $8M in sales. Their accounting department costs $800k per year, with 70% spent on staff costs. The accounting department has 18 staff ranging from technicians to fully qualified accountants. Telford exports 40% of its output and imports 50% of materials from CETA. With an exit from CETA, exports may fall 30% and import costs will rise due to a lower exchange rate. The company expects a 10% increase in general staff costs and a 20% increase in accounting staff salaries due to the exit.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    U7 Spreadsheet 01

    Uploaded by

    munshif Ahmed
    326 views7 pages
    Telford Engineering reported $1.44M in net profit on $8M in sales. Their accounting department costs $800k per year, with 70% spent on staff costs. The accounting department has 18 staff ranging from technicians to fully qualified accountants. Telford exports 40% of its output and imports 50% of materials from CETA. With an exit from CETA, exports may fall 30% and import costs will rise due to a lower exchange rate. The company expects a 10% increase in general staff costs and a 20% increase in accounting staff salaries due to the exit.

    Original Title

    u7 Spreadsheet 01

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Telford Engineering reported $1.44M in net profit on $8M in sales. Their accounting department costs $800k per year, with 70% spent on staff costs. The accounting department has 18 staff ranging from technicians to fully qualified accountants. Telford exports 40% of its output and imports 50% of materials from CETA. With an exit from CETA, exports may fall 30% and import costs will rise due to a lower exchange rate. The company expects a 10% increase in general staff costs and a 20% increase in accounting staff salaries due to the exit.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    326 views7 pages

    U7 Spreadsheet 01

    Uploaded by

    munshif Ahmed
    Telford Engineering reported $1.44M in net profit on $8M in sales. Their accounting department costs $800k per year, with 70% spent on staff costs. The accounting department has 18 staff ranging from technicians to fully qualified accountants. Telford exports 40% of its output and imports 50% of materials from CETA. With an exit from CETA, exports may fall 30% and import costs will rise due to a lower exchange rate. The company expects a 10% increase in general staff costs and a 20% increase in accounting staff salaries due to the exit.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    You are on page 1of 7

    TELFORD ENGINEERING P/L account: $M'000

    Sales 8,000
    Costs Production costs
    Materials -2,000
    Staff costs -1,500
    Overheads -300
    Distribution costs
    Staff costs -600
    Other costs -160
    Gen Admin costs
    Staff costs -900
    Other costs -200
    Accounting costs -800
    Finance costs -100

    Net profit 1,440


    NOTE 1
    Breakdown of total accounting department costs %
    Amortisation of non-current assets 10
    Accounting admin costs: materials and variable overheads 20
    Accounting staff costs** 70
    100

    Accountancy department staff grades and salary cost breakdown Number of staff
    Head of accounting 1
    Fully qualified (FQ) 4
    Part qualified (PQ) 5
    Accounting technicians (T) 8
    Total staff members: 18
    $M'000
    80
    160
    560
    800

    Average salary ($M'000) Total salary by grade ($M'000)


    70 70
    45 180
    30 150
    20 160
    Total salaries: 560
    ROLES AND GRADES WITHIN THE ACCOUNTING DEPARTMENT TEAM (PRE-MEXIT ANNOUNCEMENT)
    Function Team leader Reports
    Receivables PQ (A) Lara Petrov PQ (D) T1 and T2
    Payables FQ (A) Gerry Otuma PQ (E) + T3
    Credit control FQ (B) Rafael Sanchez FQ (D) + T4 and T5
    Payroll PQ (B) John Conti T6 and T7
    Long-term asset management FQ (C) Robert Stone No reports
    Treasury and cash management PQ (C) Philip Russell T8
    MENT)
    FURTHER INFORMATION
    Telford Engineering exports 40% of its output to CETA.
    Telford Engineering imports 50% of its materials from CETA and import costs will be affected by the lower exchange rate post

    Pre-Exit announcement exchange rate: M$1.00 = C$1.40


    Post-Exit announcement exchange rate: M$1.00 = C$1.12

    Post-exit fall in export volume to CETA based countries = 30%


    Post exit general increase in departmental staff costs due to staff replacements (excluding Accounting Dept.) = 10%
    Increase in salaries of replacement staff in the accountancy department due to MEXIT announcement = 20%

    Assumptions:
    1 Exit from CETA takes place in one year’s time.
    2 Exchange rate between home country and CETA falls at the point of MEXIT, but remains constant for the foreseeable fu
    3 Exports are invoiced in the domestic country currency (Menai $) so there is no currency conversion effect on exports.
    4 Fall in export volume is a one-off reduction due to MEXIT.
    5 Imports from CETA are subject to the increased exchange rate conversion rate post exit.
    6 Material volume will be affected proportionally by changes in sales volume, including exports.
    7 Assume all other costs are fixed in respect of sales volume.
    8 The general inflation rate is assumed to be zero each year for all revenue and costs (including wage inflation for all staff
    9 Assume all amortisation costs and overheads remain constant for the next year and for the foreseeable future.
    10 Ignore time value of money and taxation.
    CETA.
    rom CETA and import costs will be affected by the lower exchange rate post MEXIT.

    C$1.40
    = C$1.12

    ntries = 30%
    osts due to staff replacements (excluding Accounting Dept.) = 10%
    countancy department due to MEXIT announcement = 20%

    me.
    d CETA falls at the point of MEXIT, but remains constant for the foreseeable future.
    try currency (Menai $) so there is no currency conversion effect on exports.
    n due to MEXIT.
    eased exchange rate conversion rate post exit.
    onally by changes in sales volume, including exports.
    of sales volume.
    e zero each year for all revenue and costs (including wage inflation for all staff remaining in post, except when being replaced).
    ads remain constant for the next year and for the foreseeable future.

    You might also like