Managerial Accounting Assignment - Wesfarmers
Added on 2020-11-12
12 Pages3659 Words261 Views
Finance
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Managerial accounting
Table of ContentsINTRODUCTION...........................................................................................................................1Q1) Explanation of management accounting topic.....................................................................1Q2) Explanation of the purpose of two studies...........................................................................3Q3) Similarities and Differences of two studies.........................................................................7Q4 specific lesson and outcomes from these studies..................................................................1CONCLUSION................................................................................................................................1REFERENCES................................................................................................................................3.........................................................................................................................................................3
INTRODUCTIONManagerial or cost accounting is refereed to the formation of accurate statements andreports that help manager in the effective decision making for doing company business(Managerial accounting, 2013). The process that includes managerial for creating appropriateplan for future related to the spending of company is commonly known as budgeting. Thusbudgeting plays an important role to the company growth and survival. Proper formation ofbudgets help management to control their spending and maximizing the profit of the company.Budgeting is very important for every organisation so management of Wesfarmers all preparebudgets for proper utilization of resources and control its spending.In this project report the importance of budgeting in Wesfarmers is discussed withreference to two common journal such as accounting, auditing and accountability and other ismanagement accounting research and their similarities and differences are covered under thisproject. Importance of management accounting topic budgeting is discussed and outcome ofthese studies are shown in this project report.Q1) Explanation of management accounting topic.Management accounting the process where manager of company identify, measure,analyse, and communicate financial information for the betterment of company performance.From these information they form budgets to control their expenses and increase revenue andincome in future. Budget are the figuring out of total revenue organisation going to earned andexpenses that a company is going to bear in a specific period of time. Organisation basicallyform all type of budgets such as sales, production etc. that help them to manage their fund andutilise these fund in effective manner. Budgeting is the process that includes managementexpert opinion for prediction of future spending in advance that help them to control their flowof fund in present. In simply, they are the quantitative plan formed by manager to controlcompany money and make aid them to decide which activity will be benefited for organisationin future (Altintas and et. al., 2014). Wesfarmers is one of the leading food company in Australiaso it require huge amount of funds and capital to run their daily activity. Management ofWesfarmers are required to prepare proper budgets so that they can manage and measuretotal earning within a time period as compared to budgeted earning.1
Budgeting plays an important role for operation activity in Wesfarmers that includes thefollowing:Estimates of future sales: As management are able to predict the future condition aboutcustomer demands and trends that help them to prepare proper plan for increasingfuture sales of company product.Helps to control funds: One of the primary function of budgets is to develop understandamong manager that is to control company money and fund and make proper use ofthese funds. Finance manager comes to know through budgets about the effectivenessof project and continue those project and should stop investing money on other projectwhich are not effectiveness to Wesfarmers.Identifies Overspending: Preparation of budgets includes prediction in advance aboutthe total spending going to incur on project. If the budgeted spending is less than actualspending management can easily identifies the exact reason of overspending andcontrol these spending in Wesfarmers.Help management to prioritize funds: Importance of budgeting for Wesfarmers as itenables Manager to find and give Priority to those project and product that have betterreturn to them. It means because of budgeting Manager first focus and spend on thoseproduction activity that have more chance of income generation. This is also known asvalue based spending that ensure management to spend money on the product thatmatter most to company.Helps to reach Financial goals: As the name suggest budgets play an important role inachieving financial goals of Wesfarmers (Appelbaum and et. al., 2017). Manager aremore liable to pay attention towards their spending when they have a preplannedstructure of spending on a particular project so they can control their other unnecessaryflow of funds. Budgets help them to determine financial goals and reach these goals. Assist to save spend: Budgeting help management to prepare a plan for savingWesfarmers money so that it can be useful in any unexpected and expected emergencycost in future. In general, manager save a part of their spending that is used toovercome future uncertainties arising within Wesfarmers.2
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