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ACCOUNTING
ASSIGNMENT
 Table of Contents

Introduction........................................................................................................... 2

General Pricing for Accessories..............................................................................3

Survey Experience ................................................................................................3

Cash Budget.......................................................................................................... 4

Master Budget....................................................................................................... 4

Sales Budget.......................................................................................................... 4

Purchases Budget..................................................................................................5

Wages Budget........................................................................................................5

Overhead Cost Budget...........................................................................................5

Learning Outcomes................................................................................................6

References ............................................................................................................ 8

Introduction
In this report I would focus on opening an accessories store were I will sell hats, belts, and
gloves for the Olympic 2012 in London. I will be setting site down by the Olympic site as the
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potential for customers during this time is will be high. The stadium will be able to hold up to
81000 people, and from speculation, it is certain that the stadium will be at maximum
capacity. My survey gave me an insight on how many my potential clients will be willing to
pay for accessories. I visited various shops for comparison to allow me to see prices set and
how operation takes place. Some of the store I visited include: peacock, Next, M&S, top
shops. D&G and H&M all in Westfield shopping centre. I was able to analyse how operations
took place in these stores and how the people took pride in the products they were selling.
This gave me an insight on I can set up my own business on accessories. I did more research
on location to setup my business so it can match other competitors in that business
environment and meet the goal of the business. I saw a shop that would be fit to my business
in a very good location in Stratford.

General Pricing for Accessories

Based on my research that I conducted in Westfield mall and surrounding area, I found that
businesses were selling watches, scarfs and belts at 10, 5 and 7 pounds respectively. Other
costs that will be incurred will be included further in this paper. It can be said that because of
the huge number of people expected during the Olympics, businesses can expect higher
demand for their products. For this reason we intend to increase the price after the first two
weeks of operations.

Survey Experience
It was important to choose the type of products that and service that I was going to offer
during this time as a potential financial benefit would arise from these products. Just to re-
iterate, the survey took place in the Westfield mall and surrounding area. This was done by
designing a questionnaire with questions that were product oriented and I was targeting my
potential customers. I also conducted a research looking at the potential numbers of people
that were expected here and how diverse this group would be. Based on these findings I will
be able to target my customers better as I will understand where they are coming from and
the types of products they will want as souvenirs. From my survey I was also able to
conclude the following:

• According to the statistics it shows that 30% of respondent prefers Watch 20% prefers
belts and 50% wear scarves occasionally.

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 • According the survey it shows that 89% respondents shop for their accessories at
middle class like H&M, Top man. While 11% respondent shop at luxury like
Selfridges.
• Respondents willing price for accessories ranges, 90% would buy between £7-£50
and 10% will pay £50 and above.
• Respondent prefer to shop in their preferred shop was because of the quality, less
expensive and brand. 60% quality, 30% less expensive and 10% brand name.

Cash Budget
The following has been prepared solely based on the information that was collected from my
survey.

Master Budget
Description Week1 Week2 Week3 Week4 Week5 Week6
Total sales 1600 1760 1875 1915 2010 1910
Total Purchases 530 586 629 645 670 640
Total Wages 612 612 612 612 612 612
Total Overheads 365 365 365 365 365 365
Total Payments 1507 1563 1606 1622 1647 1617

Cash Flow 93 197 269 293 363 293

Opening Balance 0 93 290 559 852 1215
Closing Balance 93 290 559 852 1215 1508

Sales Budget
Description Week1 Week2 Week3 Week4 Week5 Week6
Watches 90 99 106 110 110 105
Belts 50 60 70 70 80 80
Scarfs 70 70 65 65 70 60
Unite Price (£)
Watches 10 10 10 10 10 10
Belts 7 7 7 7 7 7
Scarfs 5 5 5 5 5 5
Total unit sales
Watches 900 990 1060 1100 1100 1050
Belts 350 420 490 490 560 560
Scarfs 350 350 325 325 350 300
Weekly total sales 1600 1760 1875 1915 2010 1910

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Purchases Budget
Description Week1 Week2 Week3 Week4 Week5 Week6
Watches 90 99 106 110 110 105
Belts 50 60 70 70 80 80
Scarfs 70 70 65 65 70 60
Unite Price (£)
Watches 4 4 4 4 4 4
Belts 2 2 2 2 2 2
Scarfs 1 1 1 1 1 1
Total unit sales
Watches 360 396 424 440 440 420
Belts 100 120 140 140 160 160
Scarfs 70 70 65 65 70 60
Weekly total purchases 530 586 629 645 670 640

Wages Budget
Description Week1 Week2 Week3 Week4 Week5 Week6
Manager 38.5 38.5 38.5 38.5 38.5 38.5
Shop Attendant 1 25 25 25 25 25 25
Shop Attendant 2 20 20 20 20 20 20
Wages per hour
Manager 9 9 9 9 9 9
Shop Attendant 1 5.9 5.9 5.9 5.9 5.9 5.9
Shop Attendant 2 5.9 5.9 5.9 5.9 5.9 5.9
Total unit sales
Manager 346.5 346.5 346.5 346.5 346.5 346.5
Shop Attendant 1 147.5 147.5 147.5 147.5 147.5 147.5
Shop Attendant 2 118 118 118 118 118 118
Weekly total wages 612 612 612 612 612 612

Overhead Cost Budget

Description Week1 Week2 Week3 Week4 Week5 Week6
Electricity 40 40 40 40 40 40
Telephone 10 10 10 10 10 10
Petty Cash 25 25 25 25 25 25
Insurance 50 50 50 50 50 50
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 Cash register rental 15 15 15 15 15 15
Rent 225 225 225 225 225 225
Total week Overheads 365 365 365 365 365 365

Recommendation

• For this business to be profitable it is important for the management to have a more
involving role and engage in more public relations to sell their products directly to the
public.

• To make the most from this business the management will have to work along with two
other staff members to ensure that customers are served efficiently and quickly.

• The business will also have to make sure they meet with the trading standards that have
been set out here I the United Kingdom and adhere to these standards.

• The method is division of labour where one staff would be at the paying desk and others
two would be attending to customer and would rotate among them.

• For the customers that purchase a lot more accessories, discounts will have to be given.
So let’s say 10 per cent off everything over 50 pounds of purchases.

• The selling price is very reasonable among other competitors and according to my
survey respondents are would buy accessories in this price range. There would be more
publicity when the business is set-up so in the near future the business would expand
and would be looking forward to employing more staffs

Learning Outcomes

The following budgets have been completed based on the market research that was collected
from my surveys. This was my primary source of data, other secondary sources of data
included information gathered from other similar stores, ideas from various managers I spoke
to and particularly Westfield mall stores were I spend so much time gathering this
information.

Sales Budget

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To get the sales price, I had to multiply the weekly sales total per item of sale with the sale
price per unit. This was been done for each of the consecutive weeks and in the third week
when the actual Olympics start, sales are expected to grow.

Purchases Budget

I have been able to find a UK supplier for my products thus making it cheaper for me to
purchase my products. This is the recommended retail price for these products I will be
selling and I have made sure that they are fair trade products.

Wages Budget

It is expected that the manager will work full time hours and the other two staff member will
be on part time contracts. This will ensure that the management is able to control things at all
times and be able handle any complaints that might arise. This is a new business and it is
expected to have a manager on sight at all times.

Overheads

Most of the overhead costs for small businesses are fixed, thus I don’t expect any increases in
the price of running the shop to increase any time soon. The rental price came from the
property website other were estimates.

Conclusion

It is important to operate this store during the peek hours as this is when people are expected
in the area. None the less the store should always be open as this is going to become a tourist
destination thus making it a potential for revenues. This project has given me an
understanding of what it takes to start-up a business and it is not easy. It is also important to
remember that VAT has not been included in work, but in any business this is one of the most
important aspects as the government could shut a business don for this.

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References
• Kaplan, R. S. and Norton D.P. (2001): Balance without profit, Financial Management

• Lucey, T. (2003): Management Accounting, 5th Edition: Thomson Learning London.

• OJA. (2002). Accounting for Business Combination: Reconstruction and Dissolution.

Lagos: Hadley P

• D, A. Financial Reporting: The Theoretical and Regulatory Framework. London:

Chapman and Hall.

• http://www.thechildmindingshop.co.uk/receipt-book---100-duplicate-receipts-237-

p.asp accessed on 15/11/2010

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