AQA BUSINESS UNIT 2

AQA BUSINESS UNIT 2 everything you need

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  • Created on: 14-05-09 09:05
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Chapter 16
Using budgets
Benefits of using budgets
They provide direction and contribution you now how much you should be
spending.
Motive staff makes them work harder.
They improve efficiencyby monitoring and reviewing budgets.
The assess forecasting ability predictions
Drawbacks of using budgets
Difficult to monitor fairly.
Allocations may be incorrect.
Saving may be sought that are not in the interests of the firm.
Changes may not be allowed for when a budget is reviewed.
THIS IS ALL BECAUSE IT IS A PREDICTION.
Features of good budgeting
A good budget should:
Be consistent with the aims of the business.
Be based on the opinions of as many people as possible
Set challenging but realistic targets
Be flexible
Variance analysis
In budgeting (or management accounting in general), a variance is the difference between a
budgeted, planned or standard amount and the actual amount incurred/sold. Variances can
be computed for both costs and revenues.

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Chapter 17
Improving cash flow
Causes of cashflow problems
Firms may have cash flow problems for a variety of reasons:
Seasonal demand the demand for the products may fall during different reasons
e.g. ice cream does not really sell in winter.
Overtrading the firms become over confident and expand but then later they need
the money.
Over investment in fixed assets they may invest in fixed assets to grow but this
does not always work.…read more

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Chapter 18
Measuring and increasing profit
Net profit margin (%) = net profit before tax
Sales (turnover)
Return on capital (%) = net profit before tax
Capital invested
Methods of increasing profits
Increasing price
Decreasing costs
Increasing sales
Investing in assets…read more

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Chapter 19
Improving organisational structures
Organisational structure
Organisational structure the relationship between different people and functions
in an organisation.
Organisation charta diagram showing the lines of authority and layers of hierarchy
in an organisation.
Span of control the number of subordinates whom a manager is required to
supervise directly.
Delegation the process of passing authority down the hierarchy from a manager to
a subordinate.…read more

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Chapter 20
Measuring the effectiveness of the workforce
Labour productivity
Labour productivity= output per period _
Number of employees per period
Rate of labour turnovers= Number leaving a business over a given period
Average number employed over a given period
Problems with high labour turnover high costs
reduced productivity
Absenteeism the number of employees not at work on a given day.…read more

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Chapter 21
Recruitment, selection and training
Workforce planning
job descriptions
advertising
short listing
Training
Training needs
Benefits of training good employees
Induction training…read more

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Chapter 22
Motivating employees
Reasons for motivate
Making them work harder
Safety
Keep them happy so they stay
Companies respect
How to motivate
Performance rated pay
Profit sharing
Good feedback…read more

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Chapter 23
Making operational decisions
Operational management
Operations management the process that uses the resources of an organisation
to provide the right goods or services for the customer
Operational targets
Unit cost= total cost
Units of output
Punctuality (%) = deliveries on time
Total deliveries
Capacity utilisation (%) = actual output per annum
Maximum possible output per annum…read more

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Chapter 24
Making operational decisions: quality
What is quality?
Appearance
Reliability
Durability
Functions
Image and brand
Reputation
Exclusiveness
Importance of quality to a business
Impact on sales
USP
Impact on price
Cost reductions
Reputation
Training
Distribution
Quality control
Quick
As you only check at the end you wont find all the problems
Quality assurance
Takes longer
More costs
Check at every stage
Know what's wrong…read more

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Chapter 25
Making operational decisions Customer service
What is customer service?
Customer service identifying and satisfying customer needs and delivering a level
of service that meets or exceeds customer expectations.
Customer expectations what people think should happen and how they think
they should be treated when asking for or receiving customer service.
Customer satisfaction the feeling that the buyer gets when they are happy with
the customer service.
Customer expectations are based on:
What people hear and see.
What they are told.
Experience.
Previous experience.…read more

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