Management Accounting: Income Statement, Activity-Based Costing, Variances, and Budgeting

Management accounting

1
Table of Contents
Introduction......................................................................................................................................2
Question 1........................................................................................................................................2
Question 2........................................................................................................................................2
a)...................................................................................................................................................2
b)..................................................................................................................................................3
c)...................................................................................................................................................3
Question 3........................................................................................................................................3
a)...................................................................................................................................................3
b)..................................................................................................................................................4
Question 4........................................................................................................................................4
a)...................................................................................................................................................4
b)..................................................................................................................................................5
c)...................................................................................................................................................5
Question 5........................................................................................................................................5
a)...................................................................................................................................................5
b)..................................................................................................................................................6
c)...................................................................................................................................................6
Question 6........................................................................................................................................7
a)...................................................................................................................................................7
b)..................................................................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The business is required to be managed in an effective manner and for that, there is the need to
perform various tasks by which the profits can be maximized. There are various policies and
strategies which are used in this respect and for that evaluation are to be made. In this report
several such aspects will be undertaken with reference to the BBQ and balloons. In this the
income statement will be prepared and after that activity-based techniques will be taken into
consideration. There will also be the calculation of the variances by which the evaluation will be
made in an effective manner. The performance of the business will be evaluated with the help of
this and it will be helpful in managing the business in the coming period.
Question 1
Income Statement of Barbeque and Balloons
Particulars Amount
Revenue from Barbecue $ 4,000.00
Revenue from Balloon $ 1,000.00
Total Revenue $ 5,000.00
Cost of Barbecue $ 500.00
Cost of Balloon $ 30.00
Total Cost of Goods sold $ 530.00
Gross Profit $ 4,470.00
Expenses:
Salary $ 1,600.00
Production expenses $ 250.00
Sales and administration
expenses
$ 300.00
Total Expenses $ 2,150.00
Net Profit $ 2,320.00
Question 2
a)
Operating
BBQ
Inflating
Balloons
Cashier Greetin
g
Custom
ers
Total