Page 9 - CIMA MCS Workbook February 2019 - Day 2 Tasks
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ADVANCED MANAGEMENT ACCOUNTING (P2) ‐ PRACTICE TASKS
TASK 3 – PROFITABILITY AND BREAK‐EVEN ANALYSIS
Trigger and Task
The Senior Financial Manager has sent the following email to you
To: Financial Manager
Date: Today
Subject: Profitability analysis
The board have recently let me know that they are open to a suggestion of mine to implement a
more detailed analysis of costs, even to the level of introducing activity based costing. This has
led me to start thinking about the other types of analysis that we can do once we have the better
costing information.
I’m particularly considering profitability analysis in all of its forms and break‐even analysis.
Could you put together for me some details on the benefits and limitations of implementing
analyses by customer, procedure type and practice, as well as how we might include break‐even
analysis to help us set targets for the practices?
Ignore the difficulties of getting the relevant costing information as I feel that is a separate
consideration for us.
Regards,
Senior Financial Manager
Prepare the work that the Senior Financial Manager has requested. (Time 45 minutes)
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