ABC Ltd had a net profit of $169,740 last year (as per the Contribution Margin Statement below),
Question:
ABC Ltd had a net profit of $169,740 last year (as per the Contribution Margin Statement below), based on sales of 1,900 tonnes of their product. The manufacturing capacity of the business is 3,000 tonnes per year. The following data relate to the year ending 31 March 2021:
ABC Ltd
Contribution Margin Statement
For the year ending 31 March 2021
Sales | 969,000 | ||
Variable costs: | |||
Manufacturing | 342,000 | ||
Selling | 190,000 | 532,000 | |
Contribution margin | 437,000 | ||
Fixed costs: | |||
Manufacturing | 120,000 | ||
Selling | 109,800 | ||
Administration | 37,460 | 267,260 | |
Net profit | 169,740 |
Required:
(i) Outline the challenges for organisations that seek to measure the future impact of their current activities on the environment and society.
(ii) An increasing number of companies are reporting their sustainability performance.
Explain why organisations report their sustainability performance, particular when in many countries such reporting is voluntary. Does the increase in the number of companies reporting their sustainability performance necessarily means that these are more sustainable in their outlook and performance? Discuss.
(iii) Explain the concept of integrated reports and how they relate to sustainability reports.
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton