Accounting Assignment: Management Accounting Assignment
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Added on 2020-06-06
Accounting Assignment: Management Accounting Assignment
Added on 2020-06-06
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ACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1QUESTION 1..................................................................................................................................1QUESTION 2..................................................................................................................................3QUESTION 3..................................................................................................................................4QUESTION 4..................................................................................................................................5a. Calculating the variable cost per pot........................................................................................5b. Contribution margin per pot.....................................................................................................6c. Calculating break-even point...................................................................................................6d. Assessing whether company should accept or reject the order................................................6e. Giving conclusion....................................................................................................................7f. Calculating profit or loss for the month of May.......................................................................7QUESTION 5..................................................................................................................................8Preparing a price quotation..........................................................................................................8QUESTION 6..................................................................................................................................9a. Assessing the factors that influence the decision making of organization in relation toholding cash within the business..................................................................................................9b. Assessing the cost which business unit will incur on the holding of too low level ofinventory......................................................................................................................................9C. Explain the pros and cons of retained profit source of finance.............................................10d. Presenting the financial information that a venture capitalists needs to consider whenevaluating investment opportunities..........................................................................................10CONCLUSION..............................................................................................................................11REFERNCES.................................................................................................................................12
INTRODUCTION Accounting is a broad concept which is primarily concerned withreporting and examining organizational performance for the decisivebusiness decisions. The current report emphasizes on various financial andmanagement accounting practices i.e. financial reports, ratio analysis,budgeting, source of finance, cost calculation and others for the futuregrowth. QUESTION 1(A) Financial accounting collect, gather, organize and report only the resultof financial business activities whereas management accounting deals withexamining both the financial as well as non-financial business performancefor the decisive plans and decisions. Financial accounting reports onlyprovides quantitative information, for instance, P&L account reportsexpenditures and income to reflect net profit whilst balance sheet providesdetail of assets and liabilities to know financial status of the firm (Edwards,2013). In contrast, in the management accounts, receivable reports not onlyinform just the outstanding debt but also inform about the due date, defaultin payment and others helps in rationalized credit decisions. On the otherhand, operational reports present target set and actual result of the businessfunction so that management can compare both and make smart decision. (B) (i) Equity/ordinary shareholders are the owners of a public company. Theygain ownership by investing in the firm’s shares and getting voting rights inthe board decisions. (ii) Lenders, venture capitalists, suppliers, consumers, employees, public,competitor, taxation authorities and other stakeholders (Gassen, 2014) (C) a)Paid up capital: Equity 1
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