Sample Report on Management accounting by Experts

Management accounting is regarded as an important business element that assists in providing accounting information to the managers in the firm. Successfullyreportedthisslideshow. YourSlideShareisdownloading. × Activateyour30dayfreetrial tounlockunlimitedreading. SampleReportonManagementaccountingbyExperts Report InstantEssayWriting • Jan.11,2017 • 2likes • 12,299views DownloadNow Download NextSlideShares Youarereadingapreview. Activateyour30dayfreetrial tocontinuereading. ContinueforFree UpcomingSlideShare SampleAssignmentonManagementAccounting-InstantAssignmentHelp Loadingin…3 × ManagerialAccountingReport SaadSuhail,MBA-Finance Managementaccountingreport MagdyAbdelsattarOmar Processcostingfinal balasabbiradar ManagementAccountingProject NeelutpalSaha CostSheet,Tenderandquotation RajaKrishnanM Costaccounting-MNarora AkhileshKrishnan ManagerialAccounting-EasyBooklet FaHaD.H.NooR Casestudy1greetingsinc.jobordercostingMANAGERIALACCOUNTING NatashaZulkifli Facebook Twitter LinkedIn Size(px) Starton ShowrelatedSlideSharesatend Share Email     Topclippedslide 1of27 1of27 SampleReportonManagementaccountingbyExperts Jan.11,2017 • 2likes • 12,299views Report DownloadNow Download Downloadtoreadoffline Education Managementaccountingisregardedasanimportantbusinesselementthatassistsinprovidingaccountinginformationtothemanagersinthefirm.Thisisinordertoofferthembasistodevelopinformedbusinessdecisionwhichwouldallowthemtobeequippedintheirmanagementandkeepatrackonthefunctions(BurgstahlerandEames,2006).ForMoreInformationReadOurcompletesample. Readmore InstantEssayWriting Follow Managementaccountingisregardedasanimportantbusinesselementthatassistsinprovidingaccountinginformationtothemanagersinthefirm.Thisisinordertoofferthembasistodevelopinformedbusinessdecisionwhichwouldallowthemtobeequippedintheirmanagementandkeepatrackonthefunctions(BurgstahlerandEames,2006).ForMoreInformationReadOurcompletesample. Readmore Education SampleAssignmentonManagementAccounting-InstantAssignmentHelp InstantAssignmentHelp ManagementAccountingSample-AssignmentPrimeAustralia AdamJackson Managementaccountingassignmenthelp EssayCorp ManagementAccountingAssignmentSample-GlobalAssignmentHelp AmeliaJones Costngaccounting MuhammadImad Basicconcepteofcost PraveenOjha Assignmenthelp&writingServicesByGlobalAssignmentHelp AmeliaJones Costbehavior&terminology RayhanSarower CostConcept DeviNurlitasari CostSheetAtCorporateLevel VARUNMODI SampleAssignmentonManagementAccounting-InstantAssignmentHelp InstantAssignmentHelp ManagementAccountingSample-AssignmentPrimeAustralia AdamJackson Managementaccountingassignmenthelp EssayCorp ManagementAccountingAssignmentSample-GlobalAssignmentHelp AmeliaJones Costngaccounting MuhammadImad Basicconcepteofcost PraveenOjha Assignmenthelp&writingServicesByGlobalAssignmentHelp AmeliaJones Costbehavior&terminology RayhanSarower CostConcept DeviNurlitasari CostSheetAtCorporateLevel VARUNMODI MoreRelatedContent Slideshowsforyou ManagerialAccountingReport SaadSuhail,MBA-Finance Managementaccountingreport MagdyAbdelsattarOmar Processcostingfinal balasabbiradar ManagementAccountingProject NeelutpalSaha CostSheet,Tenderandquotation RajaKrishnanM Costaccounting-MNarora AkhileshKrishnan ManagerialAccounting-EasyBooklet FaHaD.H.NooR Casestudy1greetingsinc.jobordercostingMANAGERIALACCOUNTING NatashaZulkifli B2biayakonsep SejahteraAffif JobCosting,JobCostingSystem,Normalcosting,ABCCosting AdvanceBusinessConsulting Chapter2SystemsDesign:Job-OrderCosting ViệtHoàngDương JobcostingTutorial Svtuition ManagerialAccountingbyG.NorrenChap002 InstituteofCostandManagementAccountantPakistan |ManagerialAccounting|Chapter1|AnOverviewtoManagerialAccounting|... 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ASample On ManagementAccounting www.instantessaywriting.com 2. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. TABLEOFCONTENTS INTRODUCTION.........................................................................................................................3 TASK1...........................................................................................................................................3 1.1Differenttypesofcostclassification......................................................................3 1.2Usingjobcostingcalculationofunitcostandtotaljobcostforjob444.4 1.3CalculatingcostofExquisiteusingabsorptioncosting..................................5 1.4AnalyzingthecostofExquisitefocusingontechniqueusedbyJeffrey& Son'sLtd...................................................................................................................................7 TASK2...........................................................................................................................................7 2.1Preparationandanalysisofcostreportandcommentingonvariance....7 2.2Identificationofareasofimprovementsusingperformanceindicators..9 2.3Waystoreducecosts,enhancevalueandquality........................................10 TASK3........................................................................................................................................10 3.1Purposeandnatureofbudgetingprocess........................................................10 3.2Selectionofappropriatebudgetingmethodsforfirmanditsneeds......10 3.3Preparationofdifferenttypesofbudget...........................................................10 3.4Preparationofcashbudget....................................................................................11 TASK4........................................................................................................................................12 4.1Calculationofvariances,identificationofcausesandrecommending correctiveactions...............................................................................................................12 4.2Preparationoperatingstatementreconcilingbudgetedandactual results.....................................................................................................................................13 4.3Reportingfindingstomanagementaccordingtoresponsibilitycenters identified................................................................................................................................13 CONCLUSION..........................................................................................................................14 REFERENCES............................................................................................................................15 www.instantessaywriting.com 3. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. INTRODUCTION Managementaccountingisregardedasanimportantbusinesselement thatassistsinprovidingaccountinginformationtothemanagersinthefirm (Managementaccounting,2014).Thisisinordertoofferthembasisto developinformedbusinessdecisionwhichwouldallowthemtobeequipped intheirmanagementandkeepatrackonthefunctions(Burgstahlerand Eames,2006).Thereportsrelatingwithmanagementaccountinginvolve detailedaccountsofthecompany'savailablecash,generationofrevenue andcurrentorganizationsaccountspayableandreceivables. Inthepresentreport,managementaccountinghasbeendiscussedin contextofcasestudyrelatedwithJeffreyandSon'sLtd.Thefirmis manufacturingconcernthatproducespopularandbrandproductknownas Exquisite.Thepresentreportentailstomakeanalysisofcostinformationin thefirm.Furtheritinvolvesmethodstoreducecostsandenhancevalue withinbusiness.Inadditiontothisitalsoincludespreparation,forecasting andbudgetsforbusiness.Atlastitincludesmonitoringofperformance againstbudgetwithinfirm. TASK1 1.1Differenttypesofcostclassification Costisreferredtoasexpendituresincurredbytheorganizationin accomplishmentofitsactivities.Thecostofbusinessisdividedinthe elementsstatedasunder: Basisof classificati on TypeofcostMeaning www.instantessaywriting.com 4. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. FunctionsProduction, administration, researchand development, sellingaswellas distribution. Theexpensesrelatedwithproductionwhich assistsinconvertingrawmaterialinto finishedstockarereferredascostof production.Onthecontraryentireoffice expensesthatareneededtocontrol businessoperationsaretermedas administrationcost.Suchinvolvesstationery andofficerent.Sellinganddistributioncost coverstheexpensesinvolvedinpromoting andsellingtheproductssuchascostof marketing. NatureDirectaswellas indirectcost Directcostistheexpensesthatcanbe chargedtotheproductandservices.This involvescostofmaterialandlabor.In contrasttothisalltheotherexpensesthat cannotbechargedfromtheproductcostare indirectcostwhichincludessupervision, insurance,rentandrates(Lucey,2002). BehaviorVariable,Fixed andsemi variable Theexpensesthatarenotinfluencedwith theincreaseordecreaseinthevolumeof productionareconsideredfixedcost.This includessalaryofforemanandrentof building.Butsemivariablecostisonethat changesaftercertainlevelofproduction.For www.instantessaywriting.com 5. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. instance,telephonebill,electricitycharges etc.Onthecontraryvariablecostisonethat directlychangeswiththealterationinthe productionvolume.Thisincludesincreasein costofmaterialasaresultofriseinvolume ofproduction. 1.2Usingjobcostingcalculationofunitcostandtotaljobcostforjob444 Jobcostingisreferredtoasanessentialapproachthatcanbeusedby firminordertocalculatethecostinvariedsituation.Underthiseveryjob possessdifferentnatureandithasbeenscheduledinaccordancewith specificationsofferedbycustomers(Prior,2004).Thistechniqueiscontrolled bymaintainingdirectindirectcostaccountinrelationtothejob.Calculation ofunitcostandtotalcostforjob444aspercaseofJeffreyandSon'sLtdis asunder: NameofItemPerunitcostAmount Directmaterial£200£40000 DirectLabor£270£54000 Productionoverhead: Variable£180£36000 Fixed£120£24000 Costperunit£770 Totalcostof200 units £154000 Workingnote: www.instantessaywriting.com 6. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. ParticularQtyper unit RateCalculationCost Direct material 50kg.4£perkg50kg*4£*20040000£ Directlabor30hours9£per hour 30hours*9£*20054000£ Variable production overhead 30hours6£per hour 30hours*6£*20036000£ Fixed production overhead (80000£)/(20000 hours)*(30*200) 24000£ Costperunit(154000£)/(200Units)770£ 1.3CalculatingcostofExquisiteusingabsorptioncosting Absorptioncostingisatechniquethatassistsinmakingcost calculationofaproductbytakingintoconsiderationdirectcostsaswellas indirectexpenses.Itisthetechniqueinwhichallthemanufacturingcosts areabsorbedbytheunitsproduced(AdahandMamman,2013).Costof finishedunitwithininventorywouldinvolvedirectmaterial,directlaboras wellasbothvariableandfixedmanufacturingoverhead. ThisisaSampleReportonManagementAccounting ForCompleteEssayWriting KindlyVisitusat: [email protected] www.instantessaywriting.com 7. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. (a)Allocationandapportionofoverheadstothreeproduction departments Basisof allocation Machine shopX Machin eshop Y Assembl yStores Mainten ance Indirect wagesand supervisionAllocated £100,000. 00 £99,500 .00 £92,500. 00 £10,000 .00 £60,000. 00 Indirect materialsAllocated £100,000. 00 £100,00 0.00 £40,000. 00 £4,000. 00 £9,000.0 0 Lightand heating Area occupied £10,000.0 0 £5,000. 00 £15,000. 00 £15,000 .00 £5,000.0 0 Rent Area Occupied £20,000.0 0 £10,000 .00 £30,000. 00 £30,000 .00 £10,000. 00 Insurance and machinery Machinery bookvalue£7,947.02 £4,966. 89£993.38£496.69£596.03 DepreciaThis isaSample ReportOn Healthand SocialCare ForComplete EssayWriting KindlyVisit usat: help@instant essaywriting. com Machinery bookvalue £79,470.2 0 £49,668 .87 £9,933.7 7 £4,966. 89 £5,960.2 6 8. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. tionof machinery Insuranceof building Area occupied£5,000.00 £2,500. 00 £7,500.0 0 £7,500. 00 £2,500.0 0 Salariesof works management Numberof employees £24,000.0 0 £16,000 .00 £24,000. 00 £8,000. 00 £8,000.0 0 Totalcostof overhead £346,417. 02 £287,63 6.00 £219,927 .00 £79,964 .00 £101,056 .00 (b)Reapportionofsupportdepartmentscosttoproduction departments ParticularBasisMachineXMachineYAssembly Primary Distribution AsStated Earlier £346417.02£287636£219927 Stores Department Direct material (4:3:1) £39982£29987£9995 Maintenance Department Maintenance machine hours (12:8:5) £48506.88£32337.92£20211.2 Totalcost£434905.9£349960.92£250133.2 (C)Deducingoverheadabsorptionrates(OAR)foreveryproduction departmentsusingmachinehourbasis OAR=Totalcost/Actualmachinehours ParticularMachineXMachineYAssembly Totalcost£434905.9£349960.92£250133.2 Actualmachine hours 800006000010000 OAR£5.44£5.83£25.01 (D)Calculationofoverheadchargetotheproduct www.instantessaywriting.com 9. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. ItemsCalculationPerunitcost Material£8 Labor2hours*£7.50£15 ProductionDep’t. Overheads MachineX0.8hours*£5.44£4.35 MachineY0.6hours*£5.83£3.5 Assembly0.1hours*£25.01£2.5 Totalcost£33.35 1.4AnalyzingthecostofexquisitefocusingontechniqueusedbyJeffrey& Son'sLtd Inaccordancewiththecasescenarioprovideddirectoroffinancein Jeffrey'sSonisnotdelightedwiththepresentallocationbasisforcalculating overheadabsorptionrates.Ithasbeenstatedthatabsorptionofoverhead needstobebasedupondirectlaborhours. Calculationofoverheadabsorptionratesusinglaborhoursasa basis OverheadAbsorptionrate=Totalcost/directlaborhours ParticularMachineXMachineYAssembly Totalcost£434905.9£349960.92£250133.2 Laborhours200000150000200000 OAR£2.17£2.33£1.25 Calculationofcost www.instantessaywriting.com 10. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. ItemsCalculationPerunitcost Material£8 Labor2hours*£7.50£15 MachineX2*2.17££4.34 MachineY1.5*2.33££3.5 Assembly1*1.25££1.25 Totalcost£32.09 Thereforeitcanbedeterminedthatlaborhourbasisisquitegood allocationbasis.Thisisduetoreasonthatunderthisbasis,thereisdecrease incostperunitto£32.09.WiththisfirmcanreducethecostofproduPrior,P. B.,2004.ManagingFinancialResourcesandDecisions.BPPProfessional Education. ct. www.instantessaywriting.com ThisisaSampleReportonManagementAccounting ForCompleteEssayWriting KindlyVisitusat: [email protected] 11. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. TASK2 2.1Preparationandanalysisofcostreportandcommentingonvariance Inaccordancewiththeprovidedscenario,forecastingwasdonebythe managerinrelationwithbusinessexpendituresforproductionof200units. Theexpensesincludematerial,labor,fixedandvariableoverheads(Kippand et.al.,2012).Thereforethepreparationofcostreportisdoneby determiningtheactualcostinordertoproduce1900unitsandthevariances. Actualcostcalculation NameofItemCalculationActualcost Material12£*1900units22800£ Labor10£*1900units19000£ FixedoverheadUnchanged15000£ Electricity(Variable)3000£/800units*1900 units 7125£ Electricity(Fixed)8000£-(3.75*2000 units) 500£ Totalelectricitycost7125£+500£7625£ Maintenance5000£-(1000£/500*100)4800£ Calculationofdifferencetotalcostofelectricityduetochangingthe numberofunits UnitsTotalcost www.instantessaywriting.com 12. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Highest20008000£ Lowest12005000£ Difference8003000£ Costreport Elements Budgeted costActualcostVariance 2000units1900units Material24000£22800£1200£ Labor18000£19000£(1000£) FixedOverhead15000£15000£0 Electricity8000£7625£375£ Maintenance5000£4800£200£ Total70000£69225£775£ Fromthecalculationofvariancesaboveitisclearthatmaterial, electricityaswellasmaintenancevariancespositivelyaffectprofitability.In contrasttothesenegativevariancesisdemonstratedbycostoflaborwhich affectstheprofitabilitytoagreaterextent.Themajorreasonforthe existenceofabovevariancesisrelatedwithreductioninthevolumeof productionassuchithasreducedfrom2000unitsto1900units.Changein materialcostisasareasonofdeclineinthetotalproductionmadebyfirm. Howeverthepriceofmaterialremainsconstantinthebudget.Negative laborvarianceis£1000whichisresultedfromhigherlaborrateof£10.Semi variablecostincludeselectricitycostwhichremainsconstantatalimitof www.instantessaywriting.com 13. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. £500andgetschangeswiththechangeinthevolumeofproduction.A varianceof£375hasbeendeterminedasresultofdecreaseinthevolume upto1900units.Ithasbeenpresentedbythescenariothatmaintenanceis regardedassteppedcostwhichhasincreasedby£1000forproductionof 500extraunits.Thereisdecreaseintheactualcostwhichisupto£4800as suchthereisreductioninproductionby1000units.Thusthereisgreater needforJeffrey&Sontodevelopessentialpoliciesthatcanassistin mitigatingthecalculatedvariances.Inadditiontothisincreaseinlaborcost inclinedtotalcost.Itisimportantforthemanagementtoincreasemotivation amonglaborsoastoenhancetheirefficiencyaswellasproductivitytoa greaterextent. 2.2Identificationofareasofimprovementsusingperformanceindicators Throughapplicationofwiderangeofperformanceindicatorsseveral areasofimprovementhavebeendeterminedbyJeffreyandSon.Theseare enumeratedbelow: Satisfactionamongcustomers:Itisregardedasanessentialindicator withwhichmanagementisabletoresolvetheissuesrelatedwith performanceofseveralproductsandservices.Underthisprocedure improvementcanbemadebymanagementinthequalityofproduct withrespecttocustomerreviews(Pilleboueandet.al.,2015).By takingintoaccountfeedbackandcomplaintsJeffrey&Son's www.instantessaywriting.com ThisisaSampleReportonManagementAccounting ForCompleteEssayWriting KindlyVisitusat: [email protected] 14. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Accountingstatement:Throughdetailevaluationofseveralaccounting statementslikeincomestatements,balancesheetandcashflowetc. Jeffrey&Son'smanagementcanmakeassessmentofchangein financialposition.Iffirmdeterminesreductioninsalesalongwiththe profitabilityintheexpenditureofbusinessthenitisimportantfor managementtobringchangesintheoperationalstrategiessoasto enhanceperformanceoftheorganization.Suchstatementspresent effectivenessinofferingdescriptionregardingthechangesthathas occurredinthefinancialvaluesinaparticularfinancialyear. 2.3Waystoreducecosts,enhancevalueandquality ThereisexistenceofdifferenttechniquesthatcanassistJeffrey&Son inaccomplishingitstargetwithrespecttoreductionincost,enhancementof valueandquality.Theseareenumeratedbelow: Totalqualitymanagement:Itisaneffectivetoolthatassistsinbringing qualitativeimprovementsinthevariousoperationalactivitiesoffirm. Thustotalqualityapproachisrelatedwithimprovementinentire processofproductionthroughevaluationandresolutionofseveral variancesintheprocessofmanufacturing(Jorgensen,Patrickand www.instantessaywriting.com 15. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Soderstrom,2012).WiththisJeffrey&Soncanbringimprovementin itsefficiencytoagreaterextent. Kaizen:Likewise,TQMapproach,thetechniqueofKaizenpayshuge attentiontowardscontinuousbettermentintheentirefunctioningof theorganization.Thetoolhasprovedtobebeneficialintermsof motivatingthepersonneltowardsattainmentofoperationalactivities inaneffectiveway.Itassistsmanagementinminimizingwastageof resourcesbytakingintoaccountthefactorssuchashightimeof waiting,ineffectivehumanresourceallocationandincrementinfaulty unitsofproduction.Furtheritalsoinvolvesinappropriatemanagement ofinventoryaswellasinadequacyinthequantityofproduction. TASK3 3.1Purposeandnatureofbudgetingprocess Budgetisthemonetaryplanthatispreparedbythecompanyforeach andeverydepartment,organizationandprojectsthatestimatethe presumptiveincomegenerateandexpensesmadebythecompanyduringa specifictimeperiod.Herearesomeofthefollowingpurposeofpreparingthe budgetsbyJeffrey&Son’smanagementisasfollows:- 1.Budgetsarepreparedbythecompanyisordertoestimatethefuture income,profitabilityandexpenditurethatcanbeincurredbythe companyafterthecompletionofthespecifictimeperiod. 2.Thesearealsopreparedbythemanagersinordertocomparethe actualoutputwiththatofbudgetedoutput. 3.Anotherpurposeofpreparingthisbudgetistocreateaframeworkfor themanagersinordertopreparevariousstrategies(Kaplanand 16. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Atkinson,2015).Strategiesarepreparedbytheorganizationinorder toachievethedesiredtargetandtobeatitscompetitors. NatureofbuCostAccountingAssignmentHelpdgetingprocessthatis adoptedbytheJeffrey&Son'smanagementinordertopreparevarious typesofbudgetsisasfollows:- 1.Companyshouldusethelastbudgetpreparedbytheminorderto estimatetheupcomingfinancialenvironment. 2.Afterthatcompanyshoulddeterminetheestimatedamountoffund thatcanberenderedbythemfromthesalesoftheproductorother activities. 3.Afterthatcompanyshouldspecifytheapproxamountofexpenditure thatcanbefacedbythemintermsofrawmaterial,advertisements, productionoverheadsandlabour(ParkerandKyj,2006). 4.ThenafterthatJeffrey&Son'smanagementshouldsubtractthe estimatedincomefromthatofestimatedexpensesinordertoanalyse thebudgetisshowingtheconditionofdeficitorsurplus(Mohapatra, 2015). 5.Afterconsideringandreviewingalltheabovestepsthefinalbudgetis needtobesubmitted(Budgetingandbudgetarycontrol,2016). Therefore,atlastwhenbudgetingperiodiscompletedafterthespecifictime periodthaninthatcaseactualbudgetneedtobecomparedwiththe estimatebudgetinordertoanalysetheactualresult. www.instantessaywriting.com ThisisaSampleReportonManagementAccounting ForCompleteEssayWriting KindlyVisitusat: [email protected] 17. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. 3.2Selectionofappropriatebudgetingmethodsforfirmanditsneeds IncrementalbudgetingmethodisusedbyJeffery&Son'sinorderto preparevariousbudgetsthatprovebeneficialfortheorganization.Atthe timeofpreparationofincrementalbudgetmangerofJeffery&Son's undertakethepreviousbudgetsmadebytheminordertopreparethenew budgetfortheupcomingtimeperiod.ThisbudgetpreparedbytheJeffery& Son'shasverylittleimportanceintheever-changingbusinessenvironment. Therefore,inordertosetupmorerealisticbudgetJeffery&Son'sshould moveontowardsthepreparationofZerobasedbudgeting.Zerobased budgetingisthemethodofbudgetingthealltheexpensesthatwarrantfor eachnewperiodoftime.Zerobasedbudgetingstartsfromazerobase.In otherwordsitcouldsaythatzerobasedbudgetingisthemethodof budgeting,budgetholderandmanagerofanorganizationconsideringthe zeroasthebaseforthecalculationofincomeandexpenditure. Thismethodisusedbythemanagertomakeallnecessaryattemptsin ordertoidentifythevariousalternativesfortheincomeandexpenditure.In additiontothismanageralsomakerealassessmentoftheincomeand expenditurewhichtheycanobtainoveraspecificperiodoftime.Inorderto formappropriatebudgetZerobasedbudgetsundertakealltherealistic aspectsandviews(FisherandKrumwiede,2015).Therefore,atlastitcould www.instantessaywriting.com 18. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. beconcludedthatzerobasedbudgethelpstheJeffery&Son'toachievethe variousdesiredtargetsandresultsbyreducingthevariance. 3.3Preparationofdifferenttypesofbudget Productionbudget ParticularsJulyAugustSeptember Unitstobesold10500090000105000 Desiredending inventory135001575016500 Totalneed118500105750121500 Less:beginning inventory-11000-1350015750 Unitstobeproduced10750092250105750 Calculationofendinginventory JulyAugustSeptember 90000*15% =13500 105000*15% =15750 110000*15% =16500 Materialpurchasebudget ParticularsJuly(£) August(£ ) September( £) Unitstobeproduced10750092250105750 Materialconsumption215000184500211500 Add:Materialinendinginventory461255287554825 Totalmaterialneeded261125237375266325 www.instantessaywriting.com 19. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Less:materialinbeginninginventory520004612552875 materialtobepurchased209125191250212875 3.4Preparationofcashbudget Thecashbudgetispresentedtoevaluateavailabilityofcashbalance withthebusinessunit.Theorganizationisabletoanticipateinflowand outflowofcashthroughpreparationofbudget(ChanandChan,2004).The cashbudgetforpresentcaseispresentedunderneath. ParticularsJuly(£)August(£)September(£) Openingbalanceof cash1600044031-22007 Cashsales900000731250864000 Totalreceivable916000775281841993 Expenses Paymenttocreditors365969334688372531 Directwages322500276750317250 Variableoverhead10850098350100350 Fixedoverhead750008750087500 Totalpayable871969797288877631 Closingbalanceof cash44031-22007-35638 Asperthebudgetpresentedabove,itisseenthatthebusinessunitis abletoearnpositivecashflowinthemonthofJuly.However,inmonthof AugustandSeptembertheorganizationisearningnegativecashflow.This indicatesthatthebusinessunitisunabletogeneratesufficientcashflow www.instantessaywriting.com 20. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. throughitsoperations.Theorganizationstriveshardtocontrolitsoperating andnon-operatingexpenditure.Itisseenthattheexpenditureisdecreasing oncontinuousbasis.Nevertheless,thecashbalanceisdecreasingdueto reductioninoverallrevenueoftheorganization.Itisthroughreductionin salesthattheorganizationisunabletogeneratesufficientamountofcash flow.Henceforth,thebusinessunitshouldfocusonincreasingsalessoasto improveliquidityposition. TASK4 4.1Calculationofvariances,identificationofcausesandrecommending correctiveactions Varianceconsistsofthedifferenceswhichoccurbetweentheactual andstandardperformanceofanorganization.Budgetisthemosteffective toolwhichhelpsJeffery&Sonsinassessingthedeviationswhichoccurredin theperformofthefirm(GibassierandSchaltegger,2015).Itenables organizationtoundertakeeffectualorcorrectivemeasureswithinthe suitabletimeframe. ParticularBudgetedActualVariance Sales16000138202180 Material38403420420 Labor32002690510 Fixedoverhead48004900-100 Totalcost1184011010830 Profit416028101350 WorkingNote: FormulaCalculationVariance Material variance Materialprice(SP-AP)*AQ(2.4-2.4)*1425Zerovariance www.instantessaywriting.com 21. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. variance Materialusage variance (SQ-AQ)*SP[(3500*0.4)- (1425)]*2.40 60(A) Labourvariance Laborrate variance (SR-AR)*SH(8-7.8)*350units70(f) Laborefficiency variance (SH-AH)*SR(350-345)*840(f) Overhead variance Budgetedfixed overhead–fixed overhead variance (4800–4900)100(A) Salesvolume variance (4160–3040)1120(A) Salesprice variance (AQ*SP)-Actual sales (14000–13820)180(A) Causesbehindthevariances: Onthebasisoftheabovementionedtableactualsalesarelowerthan thebudgetedsales.Itisnotthepositivesignforanorganization becausesalesaspectsarehighlyassociatedwiththeprofitabilityofan organization. Besidesthis,positivematerialvarianceof£420recordedbyJeffery& Sons.Itoccurredduetothedeclineintheproductionunitsfrom4000 to3500.Itisthemaincausebehindtheoccurrenceofpositivematerial variance. Inadditiontothis,laborrateperhourgetdeclinedfrom£8to£7.8. DuetothisaspectactualcostincurredbyJeffery&Sonsislowerthan thebudgetedamount. www.instantessaywriting.com 22. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Alongwithit,companyhasincurredhigherfixedoverheadexpensesin comparisontothebudgetedfigures.Itreflectsthatcompanyfailsto makeeffectualfinancialplaninrelationtotheiroverheads. Recommendationsforfurtherimprovement: ItisadvisedtoJeffery&Sonsthattheyneedstoundertake promotionalstrategiesandcampaignwhichhelpstheminmaximize thesalesandprofitabilityaspect. Furthermore,organizationneedstoproducemoreunitswhichhelp themingettingtheeconomiesofscaleandtherebyimprovinggross marginofanorganization. Jeffery&Sonsneedstoencouragetheiremployeestoperformtheir activitieswiththehighlevelofefficiency.Throughthis,companyis abletoproducemoreoutputwithintheshortspanoflife. Alongwithit,companyalsoneedstoframecompetentstrategiesand policiestomakecontroloverexpenditures.Throughthis,companyis abletoattainsuccessinthedynamicbusinessarena. 4.2Preparationoperatingstatementreconcilingbudgetedandactualresults OperatingstatementofJeffery&Sonsonthebasisofactualand budgetedresultsisasfollows: Particular Per unit Budgeted(4000 Units)Perunit Actual(350 0) Varian ce Sales4160003.9413820-2180 Material0.9638400.973420420 labor0.832000.772690510 Fixed Overhead48004900-100 Total2.96118403.1411010830 Operatin1.0441600.828101350 23. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. gprofit Onthebasisoftheabovementionedoperatingstatementithasbeen identifyingthatsellingpriceoftheperunitofproductisdecreasedfrom4to 3.94.Itisthemaincauseduetothis;actualamountofsalesislowerthan thebudgetedamount.Inadditiontothis,pricesofthematerialareget inclinedfrom.96to.97.Nevertheless,numberofunitswhichorganization needstoproduceisgettingdeclined.Duetothisaspect,positivevarianceis occurredinthematerialvariance.Inadditiontothis,pricesofthelaborare declinedfrom.8to.77whichmaycausebehindthepositivevarianceofan organization.Inadditiontothis,fixedoverheadisalsoincreased.Duetothis aspect,negativevarianceisoccurredintheoverheadexpensesofan organization.Thusorganizationrequiresframingcosteffectivepoliciesand strategieswhichhelpsindesiredlevelofoutcomeorsuccess. 4.3Reportingfindingstomanagementaccordingtoresponsibilitycenters identified From:Responsibilitycenters Subject:Reportingthefindings Date:22January2016 Baseduponthecomputedvariances,ithasbeenreportedthatentire responsibilitycenterswithintheorganizationarenoteffectivelyworking. www.instantessaywriting.com ThisisaSampleReportonManagementAccounting ForCompleteEssayWriting KindlyVisitusat: [email protected] 24. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Responsibilitycenters:Itisthesubunitoftheorganizationthatoffers managerwithauthority,responsibilityaswellasaccountability.Itincludes profitcentre,costcentreandrevenuecentre.Themanagerpreparesreport bytakingintoaccountperformancesofalltheresponsibilitycenters.These areasunder: Revenuecenters:Therevenuecenterspossesstheresponsibilityto attainoutcomesintermsofbusinesssalesbothinunitsaswellasvalues.In accordancewiththecasescenarioprovidedactualaswellasbudgeted revenuesofJeffrey&Sondemonstrateshugevariation(KaplanandAtkinson, 2015).Thusitisimportantforthemanagertocommunicatewiththe managerofcenteranddeterminethemajorcauses.Aspercasegivensales ofJeffrey&Sonisdeclining.Thusitcanbeviewedthatitsperformanceis declining.Themajorreasonofitsreductionisdeclineinthesalespricefrom 4to3.94. Costcenters:Furtheritisimportantforthemtodeveloppoliciesand takesuitabledecisionsfortheorganizations.Butthedutytomake appropriatecostcontrolreliesonthecostcenter.Thereforecostcenterof Jeffrey&Sonrequiresgreatermonitoringofoperationalactivitiesin continuousmanner(McLean,McGovernandDavie,2015).Thisiswiththe 25. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. aimtomaintaineffectivecontrolwithintheorganization.Bybringing improvementintheworkingofboththecentersmanagercaneffectively attainthepre-determinedgoals.Thereisincreaseinthematerialquantity from1400standardsto1425thatdemonstratesusageofmaterialinthe business.Adverseuseofmaterialhasresultedinincreasingthecostof organization.Thusitcanbeviewedthatcentreisnotworkinginaneffective manner. CONCLUSION Itcanbeconcludedfromthestudythatitisimportanttodevelop soundmanagerialdecision.Thisisbecausesuchmajorlycontributestowards growthoforganizationinaneffectivemanner.Presentreportsdemonstrate thatthereisexistenceofnumberofmanagementtoolsandtechniquesthat assistsinattainingsuccessthroughbusiness.Withthistechniquefirmcan effectivelyreducethecosts,monitorthespendingoffirmandcaneliminate thevariancesinaneffectivemanner.Thusthisactsasanaidforthefirmin attainingitssettargetsinanappropriateway.Furtheritiseffectivein reducingthenegativefinancialconsequencesinordertorunsuccessful businessoperations.Throughcashbudgetfirmcanmakedeterminationof thedifferentcostinvolvedinperformingtheactivities.Thishasgreater advantageforfirmintermsthatitcankeepatrackonitsexpensesinan appropriatemanner.REFERENCES Booksandjournals Adah,A.andMamman,A.,2013.AssessingthePerformanceofIncremental BudgetingSystemintheNigerianPublicTertiaryInstitutions.European JournalofBusinessandManagement.5(5).pp.100-108. www.instantessaywriting.com 26. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. Burgstahler,D.andEames,M.,2006.Managementofearningsandanalysts' forecaststoachievezeroandsmallpositiveearningssurprises.Journal ofBusinessFinance&Accounting.33(5‐6).pp.633-652. Chan,A.P.andChan,A.P.,2004.Keyperformanceindicatorsformeasuring constructionsuccess.Benchmarking:aninternationaljournal.11(2).pp. 203-221. Exley.C.J.andSmith,A.D.2011.Thecostofcapitalforfinancialfirms. CambridgeUniversityPress,12(1).pp229-283. Fisher,J.G.andKrumwiede,K.,2015.ProductCostingSystems:Findingthe RightApproach.JournalofCorporateAccounting&Finance.26(4).pp. 13-21. Gibassier,D.andSchaltegger,S.,2015.Carbonmanagementaccounting andreportinginpractice:Acasestudyonconvergingemergent approaches.SustainabilityAccounting,ManagementandPolicyJournal. 6(3).pp.340-365. Jorgensen,B.,Patrick,P.H.andSoderstrom,N.S.,2012.OverheadCost Measurement:EvidencefromDanishFirms’SwitchfromVariableto AbsorptionCosting.AAA. Kaplan,R.S.andAtkinson,A.A.,2015.Advancedmanagementaccounting. PHILearning. Kaplan,R.S.andAtkinson,A.A.,2015.Advancedmanagementaccounting. PHILearning. Kipp,A.andet.al.,2012.Layeredgreenperformanceindicators.Future GenerationComputerSystems.28(2).pp.478-489. Lucey,T.,2002.Costing.Continuum. www.instantessaywriting.com 27. TollFreeNo:+1213-929-5632 E-mail:[email protected] GetbestessaywritingservicesbytheexpertwritersofInstant EssayWriting,weprovideserrorfreedocumenttostudents. McLean,T.,McGovern,T.andDavie,S.,2015.Managementaccounting, engineeringandthemanagementofcompanygrowth:Clarke Chapman,1864–1914.TheBritishAccountingReview.47(2).pp.177- 190. Mohapatra,P.,2015.JobCosting.Economics/Management/Entrepreneurhip. Parker,R.J.andKyj,L.,2006.Verticalinformationsharinginthebudgeting process.Accounting,OrganizationsandSociety.31(1).pp.27-45. Pilleboue,A.andet.al.,2015.VarianceAnalysisforMonteCarloIntegration. ACMTransactionsonGraphics.34(4).p.14. Prior,P.B.,2004.ManagingFinancialResourcesandDecisions.BPP ProfessionalEducation. www.instantessaywriting.com ThisisaSampleReportonManagementAccounting ForCompleteEssayWriting KindlyVisitusat: [email protected] × ShareClipboard × Facebook Twitter LinkedIn Link Publicclipboardsfeaturingthisslide × Nopublicclipboardsfoundforthisslide Selectanotherclipboard × Lookslikeyou’veclippedthisslidetoalready. Createaclipboard Youjustclippedyourfirstslide! Clippingisahandywaytocollectimportantslidesyouwanttogobacktolater.Nowcustomizethenameofaclipboardtostoreyourclips. Createaclipboard Name* Description Visibility OtherscanseemyClipboard Cancel Save SharethisSlideShare SpecialOffertoSlideShareReaders × TheSlideSharefamilyjustgotbigger.Enjoyaccesstomillionsofebooks,audiobooks,magazines,andmorefromScribd. 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