Advance Management Accounting Sample Assignment
Added on 2021-02-21
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Advance ManagementAccounting
Table of ContentsINTRODUCTION ..........................................................................................................................1TASK 1............................................................................................................................................1P1. Purpose and presentation of financial information from the perspective of differentstakeholders.................................................................................................................................1TASK 2............................................................................................................................................3P2. Use of different accounting microeconomic techniques.......................................................3TASK 3............................................................................................................................................4P3. Concept of variance analysis in its importance.....................................................................4P4. Actual and standard costs to control and correct variances..................................................5TASK 4............................................................................................................................................7P5. Evaluation of external and internal factors changing the business.......................................7CONCLUSION ...............................................................................................................................9REFERENCES .............................................................................................................................10
INTRODUCTION In present business scenario, the role of managerial person is increasing day by day asthey are responsible to manage and control effective tool, techniques, operation and workforce sothat valuable decision are taken for improvement in any required (Andriof and Waddock, 2017).The concept of advance management accounting is related with used of more highly accurate oradvance tools and techniques which enable to predict the future in more advance manner andsupport in preparing for present in more progressive way. Nowadays company are more focusedto control cost and deliver best quality product and maintain suitable price to attain thecompetitive advantage. To better understand the concept of advance management accountingsouthern window have been selected. In this report, cost analysis techniques, method of cost variance and CVP and usefulsolution to the problem presented within one and two activity are discussed. In addition, it alsodisclose the relevant component of cost and variance that are essential for making decision. TASK 1P1. Purpose and presentation of financial information from the perspective of differentstakeholders.Overview of company.It is a well develop and growing family business which was started with producingaluminium and uPVC window around 35 year ago (About Southern Window, 2019). So in therecent time they have modified their techniques and technologies in order to manufacture thelatest designer aluminium doors and window and some special product in glazing solution tomeet the customer demand. As southern window is manufacturing glass product form a longtime thus they are able to mix minimum aesthetics and new and effective innovative glasstechniques in order to establish and deliver visionary architectural glazing system. Purpose of financial informatics to different stakeholder.In business world, data that is related with overall rating, balance in account, cashliquidity and other monetary facts and figures that describe the financial status, strength orposition about an respective company is known as financial information. It is stated that entirefinancial information must be controlled and managed in effective manner to conduct thebusiness activity and must be handled carefully so that no internal crucial information is leak out.
All crucial information that is collected must be presented in appropriate and meaningfulfinancial statement which gives detail understanding about financial position, performance andfollowing changes in the overall position of a respective company. In southern window, managermust first apply the authentic IFRS framework that help in preparation of gather financialinformation into proper statement which enable number of stakeholder to make economicdecision for further improvement and growth. For example the declaration of revenue is thedeclaration of all expenditure and earnings over time (Bhimani, 2019). Every company beginswith the preparation of the income statement for that period when preparing the financialstatements. Some of important stakeholder for respective company that require financialinformation to make valuable decision. These are Investors: Investors of Southern Window rely on the financial information of the company to check the performance of business. They seek financial information to safeguard their interests of dividend, bonus shares and decision making power in the company. They wish to ensure that their investment does not get doomed. They use to analyse the income statement ofprevious year in order to estimate future profit. The economic power and solvency of the business will reveal the safety of their investment that was shown in the audited financial statements. Such as income statement of southern window, acts as a useful source for carrying out the company's value investing, the investor can evaluate the cash flows and make a financial choice about whether or not to share his interest in the firm.Creditors: Southern window has a wide range of creditors ranging from banks, financial institutions, venture capitalists to debt funds. They look for timely financial information of the business to check if the business is functioning properly and is liquid enough to repay their debts on the due date. Creditor or lender of firm mainly relies on the company's solvency, which the financial position declaration should reveal. Long-term lending can also be supported by the business's ' safety ' over particular assets. The significance of these resources will be shown in the economic position statement.Government: Government actually also maintains track of financial achievements by analysing corporate financial reports from various industries of the community. They rely majorly on corporates for corporate tax which makes the largest part of the receipts to the government. The receipts generally come in the form of tax, interest payments, capital gains etc. 2
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