Cost Estimates and Budgeting: A Case Study on Amana Ltd.

Management
accounting

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Monthly control report.................................................................................................................1
Amana’s performance during 2020.............................................................................................2
Recommendation for the improvement.......................................................................................4
PART B...........................................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Cost estimates are incredibly crucial in calculating all of a firm's spending. Budgets may be
produced employing a variety of ways, according to research (Bondar, Iershova and Chaika,
2019). Budgets have also been discovered to be one of the very important components which
aids a company in planning its next way to proceed. A major consideration has indeed been
devoted to the findings and the deviations decided in a produced budgets in this current debate.
The focus of this paper is on Amana Ltd. that has been hit hard by the COVID-19 epidemic. The
conduct of such a firm has been examined in relation to the current topic. The corporation's
productivity deviations have been assessed on this criteria. Furthermore, if Mr. Amana need to
do his commercial operations digitally is also discussed in this conversation and that too in an
impactful and precise format. According to the findings of the investigation, the business has
experienced both positive and adverse fluctuation. In this case, it is suggested that the enterprise
concentrate on cost-effective personnel, as this will assist the firm reduce non-favourable
variation. Mr. Amana is also advised to offer the merchandise on Amazon, since it will be more
cost-effective for the firm.
PART A
Monthly control report
Particulars Original
budget Actual Variance
Units 100 000.00 80 000.00 20 000.00
Price (Selling) £ 25.00 £ 20.00 £ 5.00
Costs (Variable)
Materials £ 250 000.00 £ 280 000.00 -£ 30 000.00
Labour £ 400 000.00 £ 440 000.00 -£ 40 000.00
OH £ 150 000.00 £ 120 000.00 £ 30 000.00
Contribution £ 1 700 000.00 £ 760 000.00 £ 940 000.00
Fixed OH
Rent (Warehouse) £ 200 000.00 £ 170 000.00 £ 30 000.00
Insurance £ 100 000.00 £ 100 000.00 £ -
Salary (Fulltime warehouse supervisor) £ 50 000.00 £ 35 000.00 £ 15 000.00