[Year]

Student name: Ana-
Maria Bordas
ID: 209087659

Module Leader: John

Opoku

[MODULE: BUSINESS
ANALYTIC]
Contents
Introduction:.........................................................................................................................................1
Question 01:..........................................................................................................................................1
Developing mathematical model using the cost information..........................................................1
Calculate the profit or loss of MK Ltd. using the above information...............................................1
Draw a graph with a spreadsheet, for a five-year projection from January 2022 taking into
consideration an annual expected increase of 8% in total variable cost, 7% increase in total
output per annum and a 7% increase in unit sales price (NB. The changes must take effect from
2022).................................................................................................................................................2
Critically analyse and comment on costing and revenue behaviour in general, and in particular,
that of MK Ltd; before and after your projections...............................................................................3
Question 02:..........................................................................................................................................4
Calculate the correlation coefficient of advertising/sales and comment on your results..................4
Plot a scatter diagram of the data and discuss the pattern of the relationship of the two variables.6
Critically analyse the impact of advertising expenditure on sales and advice the marketing
manager on how the company can gain competitive advantage in the detergent industry by
adopting other relevant marketing tactics........................................................................................7
Question 4:............................................................................................................................................8
Research the monthly digest of statistics or the national statistical archives for any two economic
variables which you think may be correlated....................................................................................8
Critically analyse and present your results in writing to the interview panel....................................9
References:.........................................................................................................................................10
Introduction:
It is more important for a business to apply different statistical forms and calculation. This
paper consists with different calculation while different model and methods of statistics
supports to reach the goal. This paper reflects the way of making cost determination and
apply the theory to solve the given issue. It also shows the way to make projection for a
certain period to determine the profit and loss for the project. So, it increase the decision
making ability. This paper also discuss over the correlation coefficient issues and solve a case
over it. It also helps to define the better marketing strategy to rich competitive advantages. It
also make discussion over certain statistical data and make solid progress of understanding
over comparing the statistical data and the way to solve different business case to make
decision

Question 01:
Developing mathematical model using the cost information
Cost prediction is not an easy task where different complex issues need to solve to determine
the cost of the business. It is significant analysis for the business to set the selling price and
also predict the project profit or loss margin. Management need to give higher priority to set
the mathematical model. It is more important for the business to set the costs strucutre.it
shows the calculation of total costs of the business. To determine the total cost so the
business, fixed cost and variable cost need to ermine. Fixed costs are the cost Int eh business
like weekly payment, rent, depreciation margin, bank internist etc. (Aljumaily, 2013) these
costs are primarily fixed as bank interest, rent are fixed for a certain period of time. Also, in
the straight lien depreciation model, depreciation amount is also fixed. So, all these costs that
are fixed need to add up for the business to determine the fixed costs. The given scenario
shows the aggregated total fixed cost for the business in a certain year. It is important for the
business to concern over more production to reduce the fixed costs margin (Rosemary, 2020).
Variable costs is playing significant role in the business. It shows the variation of the costs as
different external issues makes impact on the variable cost of the business. Variable costs
involves the unit variable costs and quantity that the business produces. Different raw
materials price, delivery charge, sales commissions, advertising costs and others can be
changed due to the change of external environment (Aljumaily, 2015). So, it is important for
this business to determine the variable cost per unit. Total variable costs depends on the total
margin of production for the business. The given data already shows that this business is
having variable cost per unit £1.50. To determine the cost margin for this business, it is
important to add total fixed cost with total variable costs. Total fixed cost already given so
total variable cost need to determine. Per unit variable cost need to multiply with the total
annual output of the business. So, both result need to add to determine the total cost of this
business
Calculate the profit or loss of MK Ltd. using the above information.
To determine the profit and loss margin of the business, it is important to make solid
calculation of these. There is a structure that can be follow by this business to determine
profit or loss from the given data for the business. To determine the total profit or loss
margin, it need to calculate the total selling price and subtract from the total cost margin.
Total profit = Total selling price – Total cost
Here,
It is important to determine the total selling price.
So,
Total selling price = £400,000×3 = £1200000
Total costs also need to define. The theory of total cost is adding all the fixed costs with
variable cost per unit for the business.
In here,
Fixed costs is £100000 and variable costs in £1.5 in per unit.

So,
Total cost= £100000+ £1.5*400000= £700000
So, Total profit / Loss = Total selling price – Total cost

Total profit = £1200000-£700000= £500000

It shows the selling price is £500000 higher than the total costs so that shows the effective
profit margin for the business.
Draw a graph with a spreadsheet, for a five-year projection from January 2022
taking into consideration an annual expected increase of 8% in total variable
cost, 7% increase in total output per annum and a 7% increase in unit sales price
(NB. The changes must take effect from 2022)
The given data shows that from January 2022, annual expected increase of variable costs is
8% and sales price and total output as product unit will increase 7% too. Variable costs in
previous were £1.50. So, from 22, it need to add up another 8%. So
Variable costs increased 8%= £1.25*8%= £.10
So, the variable costs per unit should be in 2022 is = £1.25+£0.10= £1.35
Given data also shows the increase margin of final output is 7%. The final output in currently
having at 400000 unit. So, it need to add up with another 7%.
Total annual output is = 400000*7%= 28000
Total annual output in 2022 is = (400000+28000) = 428000 in yearly
Given data also shows the sales price is going to increase too. It shows the sales price should
increase at 7% from the current sales price. Current sales price is £3 so it need to add with
another 7% from 2022.
Unit sales price= £3*7%+£3= $3.21
So, the same data is applying to make projection for the next 5 year for this business.
 Year 2022 2023 2024 2025 2026
Sales 428000 457960 490017 524318 561021
quantity
price 3.21 3.43 3.68 3.93 4.21
variable 1.35 1.46 1.57 1.70 1.84
costs
 Projection
Year Sales quantity price variable costs

561020.69228
524318.404
490017.2
457960
428000

1.35 1.46 1.57 1.70 1.84

3.21 3.43 3.68 3.93 4.21 variable costs
price
2022 2023 2024 2025 2026 Sales quantity
Year
1 2 3 4 5

This graph contains with all the calculation over the given data and provide the right graph to
highlights the projection for the year. It shows gradual increase of every portion as selling
price, variable costs and total output of the business. it show the calculation as in every year
from January 2022 taking into consideration an annual expected increase of 8% in unit
variable cost, 7% increase in both total output and sales price per unit. The graph highlights
that the way all the calculation changes from 2022 and it also highlights the positive sing for
the business as business will get more profit in future as per increase of their selling price and
total output. It will help to reduce the fixed costs for the business and reach higher growth
with more customer interaction and reach the sustainable profit margin

Critically analyse and comment on costing and revenue behaviour

in general, and in particular, that of MK Ltd; before and after
your projections.
Cost behaviour is one of the major analysis of the business that shows the change in the
behaviour of costs margin for a business on different business activity. For example,
electricity costs can be changes according to the change of working hours. But, all the costs
are not changing while some are fixes o, costs behaviour discuss over the fixed and variable
both cost margin of the business. MK ltd. shows the certain costs margin as fixed costs and
variable costs per unit already given. Also, some changes from 2002 shown and the
calculation also shows by using the expected changes. So, shows the changes of the cost and
revenue issues for this business. For a business manager, it is important for them to analyse
the cost behaviour and also determine all the single activity of the business because all the
activities are involves with cost margin for the business (Slag Mulder, 2008). Manager can
apply the cost-volume-profit analysis too. It helps them to set the plan and make control over
the cost margin of the business. There are different costs does the business is having and
these need to segmented. Variable costs is directly realign with the production marginal and
having influence from the external issues. Changes of the currency exchange rate makes
impact on the business. Also Agnes of oil price is one of the major cause of changes of the
raw materials and others that makes impact to the variable costs (Matthew, 2020). Also, cost
of transportation can be change as freight can be increase or decrease that makes impact on
the business variable costs. Business can calculate the total variable costs by making
multiplying the per unit variable cost with total production unit. On the other hand, business
is having certain fixed costs too. It shows business need to determine over the rent, bank,
wages etc. It is effective for the business to increase the production margin to reduce the
fixed cost per unit. It shows fixed costs are fixed for production capacity. So, the increase
margin of production reduce the fixed cost of the business.
Profit behaviour is relates with the cost behaviour. Sales margin and selling rice need to set
against the cost margin of the business (Demits, 2008). It is effective for the business to
determine the total cost to set the selling price. Business need to define the competitor’s
activity as pricing of these competitors and set the strategy of setting price of per unit.
Business is having certain vision and goal that need to set the selling price to reach goal and
objective of the business. It is effective for the business to control over cost to make effective
profit margin of the business
For example of the year 2025, after applying the change in cost, the profit margin need
to measure
Variable costs increased 8%= £1.57*8%= £.13
So, the variable costs per unit should be in 2022 is = £1.57+£0.13= £1.70
Given data also shows the increase margin of final output is 7%. The final output in 2023
having at 490017 unit. So, it need to add up with another 7%.
Total annual output is = (490017 *7%) +490017 = 524318
Given data also shows the sales price is going to increase too. It shows the sales price should
increase at 7% from the current sales price. Current sales price is £3.68 in 2024 as add with
7% from 2022.
Unit sales price= £3.68*7%+£3.68= $3.93

So,
Total cost= £100000+ £1.7*524318= £991341
So, Total profit / Loss = Total selling price – Total cost
Total selling price is (selling price per unit 3.93 * total sales margin 524318) = 2060570
Total profit = £2060570-£991341= £1069229
It shows the selling price is £1069229higher than the total costs in 2025 so that shows the
effective profit margin for the business.
Question 02:
Calculate the correlation coefficient of advertising/sales and comment on your results.

Yea X Y x̅ y̅ (x- x̅ ) (y-y̅) (x- x̅ ) (y- (x- x̅ )^2 (y-y̅)^2

r y̅)
2016 2,000 80,000 4,000 86,000 -2,000 -6,000 12,000,000 4,000,000 36,000,000
2017 5,000 100,000 4,000 86,000 1,000 14,000 14,000,000 1,000,000 196,000,000
2018 4,000 70,000 4,000 86,000 0 -16,000 0 0 256,000,000
2019 6,000 120,000 4,000 86,000 2,000 34,000 68,000,000 4,000,000 1,156,000,00
0
2020 3,000 60,000 4,000 86,000 -1,000 -26,000 26,000,000 1,000,000  
Tota 20,000 430,000 20,000 430,000 0 0 120,000,00 10,000,00 1,644,000,00
l 0 0 0

Now need to use the formula of T the correlation coefficient

120000000
r = 10000000∗1644000000 = 0.93

This the calculation over the correlation coefficient. It starts with 2 variables. One of the
variable is advertising expenses count as X and other one is sales revenue defies as Y in here.
So, it need to use the correlation coefficient formula that already given. It is the pre-requisite
of having two different variable to make calculation of correlation coefficient. One of the
variable need to define as X and other one under Y. it shows if the result is exactly 1 in
negative figure then it represent the downhill linear relationship. It shows no relationship
between the variables. Exactly 1 in positive figure shows the uphill linear relationship in
positive manner while +0.70 shows the strong linear relationship between two variable
(Deborah, 2018). The output of the calculation shows 0.93 that is more than 0.70 in positive
manner that shows the strong and almost uphill linear relationship does two variable is having
Plot a scatter diagram of the data and discuss the pattern of the relationship of the two
variables.

Plot Scatt er diagram

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0
1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500

Scatt er Diagram
450000
400000
f(x)==0.979897424076528
R² 19.4626865671642 x + 3582.0895522388
350000
300000
250000
200000
150000
100000
50000
0
0 5000 10000 15000 20000 25000

Graph: plot scatter diagram

Plot scatter diagram helps to make pairs with different numerical data. It helps to determine
the relationship between two numerical variables. There are some variables can have multiple
value. Also, these values can be in independent variable so it is important to draw this Plot
scatter diagram. It shows independent variables and dependent variable needed to guide in X
and Y axis respectively. In here, advertising expenses defines as the independent variable and
sales revenue margin defines with the dependent variable in here. It is important to set the
mathematical representation.
Y= 3542+ 19.46X
It shows that total advertisement cost is 20000 and the total sales revenue is 430000. There
are couple of year data already given as it shows the data starts from 2016 to 2020. So, it
shows different data of a signal variables. Tow variables are chosen and given data use for
the further progress of making the plot scatter diagram. In 2017, the total cost of
advertisement and sales revenues intercepts to reach other. So, business need to concern over
their sale marginal and determent eh output as growing over the sales margin of 100000 that
done in year 2017. So, it is the point that business need to ensure for their further revenue
margin. advertisement cost if airline din gear range in first phase of the business while after
machine establishment f brand the costs reduced while it need to run in continuous format to
make further brand awareness and improve brand image
Critically analyse the impact of advertising expenditure on sales and advice the
marketing manager on how the company can gain competitive advantage in the
detergent industry by adopting other relevant marketing tactics
Advertising is playing crucial role in modern day business. Effective Advertising helps to
improve sales margin as it helps to increase brand image of the business stop the target
customers. Effective Advertising boost up the sale margin of the business as in modern days
there are lots of competitor does having in all the products (Lee, 2013). So, I is not easy to
increase sales with the quality of the products only. Business need to draw effective
marketing strategy that will help to promote products and services of the business sand also
makes strong connection and attachment with large margin of Customer to increase sales
margin. Effective Advertising helps to define the products quality, price a features that helps
to compare customers over the products from certain business to others (Jared, 2019). So,
Advertising helps to make telling about products and services of the business to their
potential customers. Also, for the new business, it is more important to use unique
Advertising strategy that helps to show him business operation in the market. There are
different business as competitor can be have of a single product but effective Advertising
makes the different. For example, there are different chocolate brand does existing in the
market but effective promotion of ‘Kit Kat’ makes the difference and getting more
connection with customers to reach higher margin of sales and growth of the business.
There are different marketing strategy does the manager can utilize to make solid attachment
with target customers and ensure better sales growth of the business. Marketing managers can
use the social media marketing. It is one of the most potential Advertising strategy at present
time. People are attached with social media in large margin. Facebook, What Sapp and some
different social media that currently involves with daily life of people surrounding the world.
So, it is the major platform that the business can make advertising to interact with large
margin of customer. Business can use the SEO tool that will help them to bring the business
sin top in the search list. It makes strong brand image of the business and brand recognition
for the customers (Vicki, 2021). So, it increase the customer interaction that results with
higher margin of sales and profit margin for the business. There are different video content,
images that business can share in different social media that will highlights products features
and significance and also make comparison of the product of the other competitors in the
existing market. So, unique marketing strategy helps to interact with more customer marina
and make higher growth of the business
Business also nee do make different offer to their target customers as combo product, lucky
coupon, occasional discounts etc. it also make attachment of large margin of customer.
Business can use the clearing sales stocks that helps them to clear the existing stock as most
of the fashion business using this strategy and make open space for new product. It also helps
business to make effective progress of Customer attachment and reach higher growth of sales
and profit. So, business need to come out from the traditional marketing approaches and use
more effective digital Advertising approaches to reach higher growth

Question 4:
Research the monthly digest of statistics or the national statistical archives for any two
economic variables which you think may be correlated
Year GDP Growth Rate Employment Rate
2010 1.95% 70.40%
2011 1.54% 70.50%
2012 1.47% 71.10%
2013 2.13% 72%
2014 2.60% 73.20%
2015 2.35% 74%
2016 2.91% 74.40%
2017 1.89% 75.20%
2018 1.34% 75.70%
2019 1.46% 75.90%
(Clark, 2021)

GDP Growth Rate and Employment Rate

77.00% 3.50%
76.00%
2.91% 3.00%
75.00%
2.60% 2.50%
74.00% 2.35%
73.00% 2.13%
1.95% 2.00%
1.89%
72.00%
1.54% 1.47% 1.46%1.50%
71.00% 1.34%
70.00% 1.00%
69.00%
0.50%
68.00%
67.00% 0.00%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Employment Rate GDP Growth Rate

It is important to use different variables to check the linear regression and relation between
these variables. For this research, researcher chosen the GDP growth rate in UK from 2010 to
2019 as 10 years data in comparison of employment rate of UK. This table and graph shows
the GDP growth rate and employment rate of UK for last 10 years. It is important to check
the relation between two variables but before checking the relation it is important to represent
these data in a graph. It shows the GDP growth rate in 1.95% in2010 and the employment
rate is 70.40%. GDP helps to describe the economic position of the business. Higher growth
of GDP shows better progress of the national economy. This table shows, UK is having
significant growth of GDP in 2012 to 2016. After the recession of early stage of 2008-2012,
this economy makes impact on the recession that shows the less margin of growth of GDP
while they have effective growth in 2013 to 216 but after the Brexit it makes direct impact on
this country’s economy that shows les margin of growth as declining GDP than 2016. On the
other hand, employment rate makes sustainable growth as t never reduced in margin and
make effective growth from the starting point. So, there is not such a impact does GDP can
shows on employment rate in this country
Critically analyse and present your results in writing to the interview panel.
Regression Statistics
Multiple R 0.0393458
6
R Square 0.0015481
Adjusted R -
Square 0.1410878
9
Standard Error 0.0212378
6
Observations 9

ANOVA
  dn SS MS F Significanc
eF
Regression 1 4.8954E-06 4.9E-06 0.010 0.9199486
9
Residual 7 0.00315733 0.000451
Total 8 0.00316222      

  Coefficient Standard t Stat P- Lower 95% Upper Lower Upper

s Error value 95% 95.0% 95.0%
Intercept 0.7328314 0.02708966 27.05207 2E-08 0.6687746 0.796888 0.6687746 0.7968883
3
0.0195 0.1385934 1.3303258 0.10418 0.919 -3.0071273 3.284314 -3.007127 3.2843141
9

This table helps to define the relation between these two variables. GDP is taking to the X
axis and employment rate is defines with the Y axis. GDP rate shows changes in several
times as depends on the national economy and different external issues. Employment rate
growing in their natural way while increase of GDP or decline of GDP is not making any
specific issue in employment rate. So, these two variables are not having strong relating
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 Data.worldbank.org. (2021). GDP growth (annual %) - United Kingdom | Data.

[online] Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?
locations=GB [Accessed 1 February 2021].
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