SPS Ltd operates in the high-technology energy solutions sector. The PV Division designs, manufactures and installs solar panel systems. These systems are sold as either: small, medium or large systems. Small systems have a peak power generating capacity up to 100 kW (100,000 W); medium systems up to 1 MW (1,000,000 W); and large systems above 1 MW. The following information relates to the planning and actual data for 2020 year. There has been management discussion about improving the budgeting and planning processes at SPS. Currently, the budget process consists of making an adjustment to prior year actuals. The consensus amongst many of the managers is that there is little in the way of new initiatives or new ideas explored in the process. Moreover, the market revenue analysis conducted seems to serve little purpose other than the calculation of variances, which are rarely acted on.
A. How might SPS benefit from the process of profit planning? 3 marks
B. How might the market variances and associated report help inform the profit planning process for 2021? 3 marks
C. What additional information (beyond the profit variance report and related information) might be useful to help SPS management decide on specific courses of action during the profit planning process. 3 marks
12. SPS Ltd operates in the high-technology energy solutions sector. The PV Division designs, manufactures and installs solar panel systems. These systems are sold as either small, medium or large systems. Small systems have a peak power generating capacity up to 100 kW (100,000 W): medium systems up to 1 MW (1,000,000 W); and large systems above 1 MW. The following information relates to the planning and actual data for 2020 year. There has been management discussion about improving the budgeting and planning processes at SPS. Currently, the budget process consists of making an adjustment to prior year actuals. The consensus amongst many of the managers is that there is little in the way of new initiatives or new ideas explored in the process. Moreover, the market revenue analysis conducted seems to serve little purpose other than the calculation of variances, which are rarely acted on VD were former Ote 3 . ape T 15 SO Profile Variance planned 5635 hareware productiva 13190 Mence araw an 419 22 actualetting gott A. How might SPS benefit from the process of profit planning? 3 marks 1. How might the market variances and associated report help inform the profit planning process for 2021? 3 marks What additional information (beyond the profit variance report and related information) might be useful to help SPS management decide on specific courses of action during the profit planning process. 3 marks 12. SPS Ltd operates in the high-technology energy solutions sector. The PV Division designs, manufactures and installs solar panel systems. These systems are sold as either small, medium or large systems. Small systems have a peak power generating capacity up to 100 kW (100,000 W): medium systems up to 1 MW (1,000,000 W); and large systems above 1 MW. The following information relates to the planning and actual data for 2020 year. There has been management discussion about improving the budgeting and planning processes at SPS. Currently, the budget process consists of making an adjustment to prior year actuals. The consensus amongst many of the managers is that there is little in the way of new initiatives or new ideas explored in the process. Moreover, the market revenue analysis conducted seems to serve little purpose other than the calculation of variances, which are rarely acted on VD were former Ote 3 . ape T 15 SO Profile Variance planned 5635 hareware productiva 13190 Mence araw an 419 22 actualetting gott A. How might SPS benefit from the process of profit planning? 3 marks 1. How might the market variances and associated report help inform the profit planning process for 2021? 3 marks What additional information (beyond the profit variance report and related information) might be useful to help SPS management decide on specific courses of action during the profit planning process. 3 marks
