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| | | | Cost Benefits Table for Cookridge Carpet Ltd 2011/12 | | | | | | Cost | Benefit | Notes | Outstanding invoices | | £500,000.00 | Note 1 | New staff member remuneration pay | £ 12,000.00 | | Note 2 | Commissions | £ 5,000.00 | | Note 3 | New office equipment | £ 250.00 | | Note 4 | Sage 50 | £ 444.00 | | Note 5 | Bank Charges (BACS) | £ 960.00 | | Note 6 | New manuals | Nil | Nil | Note 7 | Bank Charges (Direct Debit) | £2400.00 | | Note 8 | PayPal cost | £6072.80 | | Note 9 | Professional qualification | £ 360.00 | | Note 10 | Saving on Idle time over 12 months | | £492.96 | Note 11 | Total Benefits | | £500492.96 | | Total cost | (£27486.80) | | | Additional income | £473006.16 | | | Cost benefits for Cookridge Carpets Ltd calculations Note 1, (Report 6.7) Cookridge Carpets Ltd has outstanding invoices of more than £1000.00 per customer from 500 customers This will bring extra income to the business of £50000.00 500 customers x £10000.00(at least outstanding amount of unpaid invoice) = £500000.00 Note 2 & Note 3 (Report 6.7) Salary: Basic wages of new staff member is £12000.00 per annum. Commissions: Cookridge Carpets Ltd will pay 1% for collection of unpaid invoices. Therefore £500000.00 x 1%= £5000.00 payable for commission in 2011/12 Note 4 (Report 6.7) For new member of staff the company will need to purchase new telephone and new desk. According what market is offering the company could buy: Telephone at a cost of £20.00 (Furniture for the Business Ltd article nr 50) New desk with the chair £230.00 (Furniture for the Business Ltd Article nr 210) All prices including VAT. Note 5 (Report6.2) To purchase new computer system will cost the company: Sage 50 Cost £204.00 2 Extra licenses (£100 plus VAT per user) £240.00 Total cost: £444.00 Note 6 (report 6.5) BACS method that will be used to pay salaries will cost the company per annum £960.00 £80.00 cost per month x 12 moths = £960.00* *This price has been offer by the bank and is fixed for the first 12 months. Note 7 (Report 6.3) The company will write manuals and regulations by themselves and therefore the cost is £nil. Note 8 (Report 6.6) Lax of Credit control will cost the Business £2400.00 per annum for Direct debit £200.00 monthly bank charge x 12 months= £2400.00 Note 9 (Report 6.8-6.9) PayPall cost: £0.20 each transaction X 364 transactions per annum = £72.80 Approximate income from transactions: 1.5% from £400000 = £6000.00 Total cost: £6072.80 Note 10 (Report 6.4) Accounting Qualification will cost £300 plus VAT= £360.00 Note 11 (Report 5.8) Cookridge Carpets could safe monies from over time once accounts department will stop working on Excel Sheet. the following saving is from idle time 5 hours of overtime x £8.21 per hour = £41.05 per month £41.05 x 12 months = £492.60