(SOLVED) How can each company shift the balance? What information will each company need?

Discipline: Accounting

Type of Paper: Question-Answer

Academic Level: High school

Paper Format: APA

Pages: 3 Words: 856


companies like Amazon Music, Pandora, and Apple offer music streaming services that currently cater to more than 1 billion users. The companies have control over millions of sound tracks. As competitors, there are fluctuations in the market share, but some companies continue to lag behind as operational costs continue to rise.
Given the market fluctuations across this sector of the entertainment industry, the officers of each company must make decisions to improve or maintain a competitive advantage. The challenges are many, while the opportunities may be restricted. How can each company shift the balance? What information will each company need?
Complete the assignment by submitting:
  • Access Mergent Online database through the NCU Library and locate the 5-year P&L and balance sheet for each company.
  • Write a ½- to 1-page synopsis of each company’s current position—use web sources.
  • What can you determine about each company’s viability for the last 5 years?
  • How have revenues and expenses changed over this period?
  • How have operational costs changed over the period?
  • What can be determined by comparing revenues from advertising and subscriptions?
  • Based on your research and analysis, make one prediction about the future of each company and one recommendation.
Length: 3 to 5 pages, cover and reference pages do not contribute to the page count, use APA formatting and style
References: Include a minimum of 3 peer-reviewed resources from the NCU Library.
Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect graduate-level writing and APA standards. Be sure to adhere to Northcentral University's Academic Integrity Policy


Cost Calculations and Analysis

Cost analysis is important in business decisions. Many types of costs exist in management accounting, including target costs, job costs, and costs associated with intangibles. As an example, a firm’s decision-makers might elect to use ABM (activity-based management) to determine the best way to increase profits on items that match customers’ needs. Alternatively, the ABM information may result in cutting product lines or eliminating an entire plant to preserve shareholder value. Without these tools, managers and leaders might become traditionalists, expecting to see static profit margins year after year (Freud’s definition of insanity).
When leaders become traditionalists, the result is waste due to DOWNTIME. This acronym represents defects, overproduction, waiting, not utilizing people to their full potential, transportation, inventory, movement, and excess processing. These are the costs associated with failure; however, with the right information (tools), operations and profits can be sustained long-term.
McWatters, C. S., & Zimmerman, J. L. (2016). Management accounting in a dynamic environment. New York, NY: Routledge, Taylor & Francis Group.
Cost calculations and analysis definitions:
  • Average cost: The total costs of production divided by the number of units produced.
  • Capacity: The measure of constraints on the operation of an organization.
  • Cost-benefit analysis: The process of making decisions by comparing the costs and benefits of alternative choices.
  • Differential benefit: The difference in benefits of two alternative decisions.
  • Differential cost: The difference in costs of two alternative decisions.
  • Fixed cost: The cost of initiating production, which does not vary with the number of units produced.
  • Marginal cost: The additional cost of producing one more unit given a certain level of output.
  • Opportunity cost: The forgone opportunity of using a resource for another purpose.
  • Relevant range: The range of output levels over which variable costs are reasonable approximations of opportunity costs.
  • Sunk cost: A cost that has already been incurred and cannot be changed.
  • Variable cost: The variable cost per unit times the number of units produced.
  • Variable cost per unit: The variable cost per unit is an approximation of the marginal cost using fixed and variable costs.
It is essential to understand cost behavior and the effect on the organization. This week, the focus is on the tools used for analyzing costs and the practical application of the information to further the organizations strategy.
Expert Solution Preview

The Financial Analysis of the Music Streaming Subsector

Despite the pandemic, the CEOs of the music streaming apps have been largely optimistic about 2021. Their strategy is based on international expansion. Considering the balance sheet and P&L statement may not be enough to notice market trends and different factors that affect how online streaming of music is marketed. The need necessitates that one should consider the operational costs, revenues, and advertising among others.