Analyzing Accounting and Management Techniques

This assignment delves into the world of accounting and management techniques. It requires an in-depth analysis of diverse methods such as activity-based costing, budgeting techniques (including comparing different types), and key performance indicators (KPIs). Students are expected to draw upon provided case studies and research papers, including those from renowned authors like Amundson, Arai, Holtzman, Houghton, Innes, Jacob, Kee, Kennedy, Steffan, Swarr, Wielicki, Young, and Zimov. The analysis should highlight the practical applications and impacts of these techniques on organizational performance.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Different type of cost classification.......................................................................................1
1.2 Calculation of Unit cost and total job cost.............................................................................2
1.3 Calculating cost of Exquisite using absorption costing.........................................................2
1.4 Analyzing cost of Exquisite...................................................................................................6
TASK 2............................................................................................................................................7
2.1 Preparing and analyzing cost report for the month of September.........................................7
2.2 Various performance indicators to identify area for improvement.......................................9
2.3 Ways to reduce cost and enhance quality..............................................................................9
TASK 3..........................................................................................................................................10
3.1 Purpose and nature of budgeting process............................................................................10
3.2 Appropriate budgeting method for organization.................................................................10
3.3 Preparing different type of budgets.....................................................................................11
3.4 Preparing cash budget..........................................................................................................12
TASK 4..........................................................................................................................................16
4.1 Calculating variance and identifying causes........................................................................16
4.2 Preparing operating statement reconciling budgeted...........................................................18
4.3 Findings to the board of directors........................................................................................19
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
Management accounting is associated with the field of accounting through which it is
possible for business to combine norms of budgeting along with cost. By considering different
techniques it is possible for organization to calculate actual cost of production along with
operational activities so that decisions can be taken accordingly. Further, it has become
necessary for enterprise to record actual cost and expenses by considering different methods of
costing (Adler, 2013). Through, this it is possible for company to reduce the level of cost and
profitability level can be enhanced easily. Apart from this every organization has indulged into
practices of maintaining different type of accounts so that overall performance in the market can
be known easily and corrective actions can be taken on the basis of same. For conducting the
present study, organization chosen is Jeffrey and Sons which manufactures many branded
products called Exquisite. Further, business has many departments where major one is service
and production. Various tasks have been covered in the report which involves different type of
cost classification, calculation of job costing etc.
TASK 1
1.1 Different type of cost classification
Cost is considered as the expenses which are incurred by company for conducting overall
operations. Further, main costs associated with the business are segregated into:
 Element: As per this factor cost is divided into direct and indirect. Direct cost are
incurred for carrying out the manufacturing process. Further, main examples of this type
of cost are heating, lightning etc (Young, 2008). Whereas indirect costs are not linked
with the production process and its key example are small tools etc.
 Function: On the basis of function cost can be divided into different type such as
distribution, production, quality check etc.
 Nature: As per the nature of the cost it can be divided into material, labor and overhead.
Material as a cost represents the cost incurred for carrying out manufacturing process.
Labor is associated with wages given to workforce and overhead is associated with cost
of company (Holtzman, 2013).
 Behavior: On the basis of behavior cost can be segregated into fixed, variable and semi
variable. Fixed cost does not change with the level of output, variable keeps on changing
and semi variable contains features of both fixed and variable.
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1.2 Calculation of Unit cost and total job cost
Job cost is considered as one of the most appropriate method through which cost is
calculated in condition where each job is different from other (Steffan, 2008). Further, this
method is developed of undertaking an account where direct along with indirect cost are
undertaken. Computation of unit cost along with total cost of job 444 has been shown below:
Particulars Amount (£)
Direct cost
Direct material 200
Direct labour 270
Indirect cost
Variable production overhead 180
Fixed production overhead 120
Cost per unit 770
Units to be produced 200
Total cost 770*200 154000
Working note
Fixed production overhead (Budgeted overhead / total direct labor hours) *
Direct labor hours used in Job 444
=(£80000 / 20000 hours) * 30 hours
=£120
After doing the above calculations it can be said that per unit cost of job 444 is £3.85 and
total cost of this job will be £770.
1.3 Calculating cost of Exquisite using absorption costing
Production Departments Service Department
Basis of Total Machine Machine Assembly Stores Maintena
nceApportioning Shop X Shop Y
000’s
2

Indirect
Wages
Allocated 362 100,000 99,500 92,500 10,000 60,000
Indirect
Materials
Area
occupied
253 100,000 100,000 40,000 4,000 9,000
Lighting
Heating
& Area
Occupied
50 10,000 5,000 15,000 15,000 5,000
Rent Area
Occupied
100 20,000 10,000 30,000 30,000 10,000
Insurance &
Machinery
Book value
of Machinery
15 7,947 4,967 993 497 596
Depreciation
of Machinery
Book value
of Machinery
150 79,470 49,669 9,934 4,967 5,960
Insurance of
Building
Area
Occupied
25 5,000 2,500 7,500
7,500
2,500
Salaries
Works
of No.
employees
of 80 24,000 16,000 24,000 8,000 8,000
Sub Totals 1,035 346,417 287,636 219,927 79,964 101,056
Re-
of service
Stores Dept. 39,982 29,987 9,995 (79,964)
Maintenance 48,507 32,338 20,211 (101,056)
Totals 434,906 349,961 250,133 0 0
Working Note
Lighting & Heating: Machinery X 10/50 x £50,000 — f10,000
Machinery Y 5/50 x £50,000 — £5,000
Assembly 15/50 x £50,000 — f 15,000
Stores 15/50 x £50,000 = £15,000
Maintenance 5/50 x £50,000 = £15,000
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Rent Machinery X 10/50 x £100,000 = f20,000 Machinery Y 5/50 x £100,000 =
£10,000 Assembly 15/50 x £100,000 = £30,000 Stores 15/50 x £100,000= £30,000
Maintenance 5/50 x £100,000 = £10,000
Insurance & Machinery Machinery X 800/1510 x £15,000 = £7,964
Machinery Y 500/1510 x £15,000 — £4,966 Assembly 100/1510 x :E15,000 — £994 Stores
50/1510 x £15,000= f 497 Maintenance 5/1510 x f15,000= £596
Depreciation of Machinery Machinery X 800/1510 x £150,000 = £79,470
Machinery Y 500/1510 x £150,000 = £49,669 Assembly 100/1510 x £150,000 = £9,934 Stores
50/1510 x £150,000 — £497 Maintenance 60/1510 x £150,000 =
£596
Insurance of Buildings Machinery X 15/50 x £25,000 — £5,000
Machinery Y 5/50 x £25,000 = £2,500 Assembly 15/50 x £25,000 = f7,500 Stores 15/50 x
£25,000 — £7,500 Maintenance 5/50 x £25,000 = £2,500
Salaries of works mgmt. Machinery X 3/10 x £80,000 = £24,000
Machinery Y 2/10 x :E80,000 = £16,000 Assembly 3/10 x £80,000 = £24,000 Stores 1/10 x
£80,000 — £8,000 Maintenance1/10 x £80,000 = £8,000
Reappointing workings: based on material issues
Machinery X 400/800* £79,964 = £39,982
Machinery Y 300/800 * £79,964 = £29,987
Assembly 100/800 * £79,964 = £9,9995
Based on time spent
Machinery x 12/25 * £101,056 = £48,507
Machinery y 8/25 * £101,056 = £32,338
Assembly 5/25 * £101,056 = £20,211
Overhead absorption rate workings
Departments = Total / actual machine hours per dept
Machinery X = £ 434,906/ 80,000 = £5.44
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Machinery Y = £349,960/ 60,000 = £5.83
Assembly = £250,134/ 10,000 = £25.01
Overhead absorption rate
Machinery X= 434906/80000=5.44
Machinery Y= 349960/60000= 5.83
Assembly=250134/10000=25.01
Computation of absorption rate
£ £
Materials 8
Labour 15
Overheads
X (0.8*5.44) 4.34
Y (.6*5.83) 3.5
Assembly (.1*25.01) 2.5
Total cost 33.35
Allocation of cost of support departments on the basis of machine hours
Machine shop X Machine shop Y Assembly Total
Store £39,982.00 £29,987.00 £9,995.00 £79,964.00
Maintenance £45,807.00 £32,338.00 £20,211.75 £101,056.00
Total £434,906.00 £349,961.00 £250,133.00
Allocation of criteria of cost
Particulars Description
Indirect wages and supervision As per the provided amount.
Indirect materials As per the provided amount.
Light and heating On the basis of area occupied
Rent On the basis of area occupied
Insurance and machinery On the basis of book value of machine
Depreciation of machinery On the basis of book value of machine
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Insurance of building On the basis of area occupied
Salaries of works management On the basis of number of employees.
Units to be produced
Material cost £400,000.00 £300,000.00 £100,000.00
per unit material 8 8 8
A/B no. of units 50000 37500 12500
Overhead absorption rate
Machinery X 434906/80000=5.44
Machinery Y 349960/60000= 5.83
Assembly 250134/10000=25.01
Computation of absorption rate
Exquisite calculation
£ £
Materials 8
Labour 15
Overheads
X (0.8*5.44) 4.34
Y (.6*5.83) 3.5
Assembly (.1*25.01) 2.5
Total cost 33.35
1.4 Analyzing cost of Exquisite
Calculation of absorption rate on the basis of labor hours
Machinery X 434908/200000= 2.17
Machinery Y 349960/150000= 2.33
Assembly 250134/20000= 2.15
Calculation of Exquisite
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£ £
Materials 8
Labour 15
Overheads
X (2*2.17) 4.34
Y (1.5*2.33) 3.5
Assembly (1*1.25) 1.25
Total cost 32.09
By considering the overall change linked with absorption rate from machine to labor hour
it has been noticed that changes are taking place in the per unit absorption rate of company. By
undertaking the norms of costing technique it has been identified that technique such as
absorption labor hour is appropriate and this can provide long term benefits to business.
TASK 2
2.1 Preparing and analyzing cost report for the month of September
Cost report for the month of September
Budgeted cost Actual cost Variances
Particulars
Units 2000 units 1900 units
Material cost 24000 22800 -1200
Labor cost 18000 19000 1000
Fixed overhead 15000 15000 -
Prime cost 57000 56800 -
Electricity
Fixed portion 500 500 -
Variable portion 7500 7125 375
Maintenance 5000 5000 -
Total production cost 70000 69425
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Calculation of standard budget at 1900 units
Budgeted cost Budgeted cost
Particulars
Units 2000 units 1900 units
Material cost 24000 22800
Labor cost 18000 17100
Fixed overhead 15000 15000
Prime cost 57000 54900
Electricity
Fixed portion 500 500
Variable portion 7500 7125
Maintenance 5000 5000
Total production cost 70000 67525
Calculation of variable cost – electricity change in total cost / change in no of units to be
produced
(8000-5000) (2000-1200)
= £3.75
Computation of stepped cost
The maintenance cost linked with company will not alter as it is occurred on slot of 500.
Further, by considering this aspect decline in 100 units will not bring any kind of difference in
cost.
Analysis of variance
 Labor cost: Cost report of Jeffrey and Sons is showing adverse variance of 1000. Further,
actual variance is 1900 and it has affected labor cost per unit which is 9 and actual labor
cost is 10. So, this is having unfavorable impact on company where management has to
pay amount of 1.
 Material cost: It is highlighting favorable variance where no change has been noticed in
the per unit cost and through this it can be said that proportionate units can be produced
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easily (Houghton, 2007). Further, it will have unfavorable impact on cost of material
which will decline.
 Fixed overhead: It is not representing any type of variance. Further, with the rise or
decline in production level no such alteration has been seen in the amount of fixed
expense (Innes, Mitchell and Sinclair, 2000).
 Electricity: It is of semi variable nature and after computation it has been found that no
such alteration is present in the fixed proportion. Further, amount of variable portion has
been decline significantly.
2.2 Various performance indicators to identify area for improvement
Different performance indicators are present through which Jeffrey and Sons can
determine the area for improvement. Further, such indicators are as follows:
Financial statements: It is possible for company to analyze financial statements such as profit
and loss account, balance sheet etc (Jacob, 2001). Through this profitability level can be known
and it can be ensured whether business performance is improving or not. Apart from this,
company can consider different type of ratios such as gross profit, return on capital employed,
net profit etc. Through this, areas for improvement can be identified easily by business.
Quality of products and services: By determining the present quality of product business can
take corrective measures so as to enhance overall level. For the same, it is necessary for company
to monitor all the operations tasks of company. This will assist management in finding major
areas where improvement can take place (Kee and Schmidt, 2000).
Customer satisfaction: It is also one of the major performance indicators where by knowing
satisfaction level of target market business can enhance overall performance in the market (Key
Performance Indicators, 2014). Further, Jeffrey and Sons can consider views of customers and
products can be modified accordingly.
2.3 Ways to reduce cost and enhance quality
Different ways are present which Jeffrey and Sons can consider for enhance quality level
of its service and it can save overall cost of the business. Such ways are as follows:
Total quality management: This tool is appropriate for business through which quality can be
improved to extent (Kennedy and Affleck-Graves, 2001). Further, it can assist Jeffrey and Sons
to find major areas where quality level can be enhanced. Through this cost can be saved and it
has positive impact on the profitability level of business.
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Management audit: This method is also effective where company can reduce cost through
continuous monitoring and main stress can be on areas where improvement is required. Further,
this technique assists business in carrying out each and every activity as per taste and
requirement of target market (Swarr, 2011).
Kaizen costing: Jeffrey and Sons can undertake technique of Kaizen costing with the motive to
accomplish overall aims of the business. Further, it can assist in enhancing motivation level of
staff members and wastage associated with the production process can be reduced easily which is
one of the main motives of business.
TASK 3
3.1 Purpose and nature of budgeting process
Main purpose of budgeting process is to forecast future operational tasks. Further, it
supports in estimating future expenses along with revenue so that resources can be allocated
properly (Wielicki and et.al., 2002). Jeffrey and Sons has developed budget with the motive to
know expenditure level so that crucial operations can be carried out easily. Apart from this
profitability level or loss can be known easily through budgeting process undertaken by
management.
Nature
By nature entire budgeting process is flexible where actual values of the last accounting
period are undertaken by Jeffrey and Sons. Further, with the help of estimation computation of
actual amount of cash is done from the sales volume which is also beneficial for company
(Zimov, Schuur and Chapin, 2006). Apart from this, all the expenses are considered such as
material, labor and production. Further, expenditure amount is deducted from profit and this
helps in knowing the deficit or surplus amount.
3.2 Appropriate budgeting method for organization
Different budgeting methods are present which Jeffrey and Sons can undertake for
enhancing overall performance of the business. Such methods are as follows:
Operational budget: This type of budget is being prepared by company after considering
separate operational tasks (Al-Omiri and Drury, 2007). Through this budget it is possible for
organization to know income level which is being expected by company and it supports in
knowing the expenditure level of firm. Moreover, operational budget helps in development of
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plans for business and undertake all the key operations of the company so that they can be
carried out in appropriate manner.
Zero base budgeting: This budgeting technique provides previous base for development of
budget (Amundson, 2001). Further, this type of condition occurs due to alteration in market
place. Moreover, in this method no measure of forecasting is present and high possibility of
variance exist. Apart from this, Zero base budgeting technique undertakes process flow whose
stages are business process identification, evaluating alternatives, determining funding level and
setting priorities.
Incremental budgeting: Through this budgeting method it becomes easy to perform calculation
of budget where few alterations are taking place in the surroundings (Comparing Budgeting
techniques., 2015). This traditional method of budgeting relies on financial information. Main
advantage of undertaking this technique is that it depends on financial results etc.
3.3 Preparing different type of budgets
(a) Production budget
Particulars July August September October
Sales 105000 90000 105000 110000
Less: opening stock 11000 13500 15750 16500
Add: Opening stock 13500 15750 16500 15000
Units to be produced 107500 92250 105750 108500
Working note
Closing Stock:
July = 15% * August sales = 15%*90000 = 13500
August = 15% * Sept. sales = 15%*105000 = 15750
September = 15% * Oct. sales = 15%*110000 = 16500
October = 15%*Nov. sales = 15%*100000 = 15000
(b) Material purchase budget
July August September October
Material usage 215000 184500 211500 217000
Less: Opening stock 52000 46125 52875
Add: Closing stock 46125 52875 54250
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Purchases 209125 191250 212875
July opening stock = 52000 kg and closing = 25%* 184500 = 46125
Material usage budget
July material usage= 107500 units * 2 kg = 215000 kg
August material usage= 92250 units * 2 kg = 184500 kg
September material usage= 105570 units * 2 kg= 211,500 kg
October material usage= 108500 units * 2 kg = 217,000 kg
3.4 Preparing cash budget
Cash budget of Jeffrey and Son's smake
Particulars July August September
Opening balance of cash £16,000.00 £204,431.25 £192,306.25
Received from debtors £333,000.00 £335,250.00 £330,750.00
Cash sales £567,000.00 £486,000.00 £567,000.00
Total receivable £916,000.00 £1,025,681.25 £1,090,056.25
Expenses
Payment to creditors £290,568.75 £333,375.00 £289,693.75
Direct wages £300,000.00 £300,000.00 £300,000.00
Variable overhead £46,000.00 £100,000.00 £100,000.00
Fixed overhead £75,000.00 £100,000.00 £100,000.00
Total payable £711,568.75 £833,375.00 £789,693.75
Closing balance of cash £204,431.25 £192,306.25 £300,362.50
Working notes
Computation of amount receivable from debtors
July August September
Amount received for sales before a month 247500 236250 236250
Amount received for sales before two months 85500 99000 94500
Sum 333000 335250 330750
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Computation of amount of overhead payment
Overhead payment July August September
Variable overhead 46000 100000 100000
Fixed overhead 75000 100000 100000
Computation of production cost
July August September
Material cost £3.50 £3.50 £3.50
Wages £3.00 £3.00 £3.00
Variable overhead £1.00 £1.00 £1.00
Total variable cost £7.50 £7.50 £7.50
Fixed overhead £100,000.00 £100,000.00 £100,000.00
Units to be produced 107500 92250 104250
Total variable cost £806,250.00 £691,875.00 £781,875.00
Total production cost £906,250.00 £791,875.00 £881,875.00
Sales budget
July August September
Units to be sold 105000 90000 105000
Sale price 9 9 9
Sales 945000 810000 945000
Cash budget of Jeffrey and Son's
Particulars July (£) August (£) September (£)
Cash inflow
Sales receipts (w.n.1) 900000 731250 864000
Cash outflow
Purchase 365969 334688 372531
Labour (w.n.2) 322500 276750 317250
Variable O/H (w.n.3) 108500 98350 100350
Fixed O/H 75000 87500 87500
Net cash flow 28031 -66038 -13631
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Opening balance 16000 44031 22007
Closing balance 44031 -22007 -35638
Working notes
Working Note-1
Sales (£) July (£) August (£) September (£)
May 855000 85500
June 990000 247500 99000
July 945000 567000 236250 94500
August 810000 486000 202500
September 945000 567000
July: 105000*9 = 945000
August: 90000*9 = 810000
September = 105000*9 = 945000
July receipts August receipts September receipts
10%*855000 May 10%*990000 June 10%*945000 July
25%*990000 June 25%*945000 July 25%*810000 Aug.
60%*945000 July 60%*810000 Aug. 60%*945000 Sept.
Working Note-2
Labour
July 1075000*3 = 322500
August 92250*3 = 276750
September 105750*3 = 317250
Working Note-3
Variable overhead
July (£) August (£) September (£)
June 44000
July 64500 43000
August 55350 36900
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September 63450
Total 108500 98350 100350
Based on Junes Sales = 40% * 110000 and it should be based on production of June and the
difference is in immaterial.
40%*110000 units = 44000*1 = £44000 from June and payable in July
60%*107500 units = 64500*1 = £64500 from July and payable in July
40%*107500 units = 43000*1 = £43000 from June and payable in Aug.
60%*92250 units = 55350*1 = £55350 from June and payable in Aug.
40%*92250 units = 36900*1 = £36900 from July and payable in Sept.
60%*105750 units = 55350*1 = £63450 from June payable in Sept.
(d) Budgeted profit and loss account
July (£) August (£) September (£) Total (£)
Sales 945000 810000 945000 2700000
Less: bad debts 47250 40500 47250 135000
897750 769500 879750 2565000
Total MC of
production
806250 691875 793125 2291250
Add: opening
stock
82500
Less: closing
stock
123750
Cost of sales 2250000
Contribution 315000
Fixed overheads 300000
Profits 15000
July (£) August (£) September (£) Total (£)
Material 376250 322875 370125 1060500
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Direct labour 322500 276750 317250 916500
Variable O/H 107500 92250 105750 305500
Total MC of
production
806250 691875 943125 2582500
TASK 4
4.1 Calculating variance and identifying causes
Computation of variances of Jeffrey and Son's
Particulars Budgeted Actual Variance
Nature of
variance
Per unit Total Per unit Total
Sales revenue (A) 4 per unit 14000
3.95 per
unit 13820 -180 Adverse
Material Cost (a) 2.4 per kg 3360 2.4 per kg 3420 60 Adverse
Labor charges (b) 8 per hour 2800
7.80 per
hour 2690 -110 Favorable
Fixed overheads (c) 4800 4900 100 Adverse
Total Cost (a + b + c) 10960 11010 50 Adverse
Actual profit (A-Total cost) 3040 2810 -230 Adverse
Working note
Sales variances
Sales volume variance (4160- 3040) = (1120) (A)
Sales prices variance (14000- 13820) = (180) (A)
(Budgeted: 35000*£4- Actual sales)
The material prices variances
AQ (1425Kg) X AR (£2.40) = £3420
The material prices variances 0(A)
AQ (1425Kg) X SR (£2.40) = £3420
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The material usage variance 60(A)
SQ (3500 Units x 0.4) X SR (£2.40) = £3420
The labor variances
AH(345Hrs) X AR (£7.8 ) =£2690
The labor variance rate 70 (F)
AH(345Hrs) X SR (£8.0 ) =£2760
the labour efficiency variance
SH (3500 Units x0.1)350hrs X SR (£2.40) = £2800
Fixed overhead selling
Actual fixed overheard = £4900
The fixed overhead expenditure variances 100(A)
Budgeted fixed production overhead = £4800
Budget
Original Flexed Actual
Output (Production
and sales units )
4000 3500 3500
£ £ £
Sales revenue 16000 14000 13820
Raw materials -(3840) (3360) (1400)Kg (3420) (1425Kg)
Labour -3200 (2800)(350Hrs) (2690)(345Hrs)
Fixed overheads -4800 -4800 -4900
Operating profit 4160 3040 2810
After computation of variance it has been found that Jeffrey and Son’s is not performing
up to the mark. Further, variance is being present in the labor, sales and profitability of business.
This is showing that business is not efficient in determining sale price per unit which has lead to
decline in sales volume (Arai, Kitada and Oura, 2013). Further, manufacturing tasks of business
have consumed large amount of material which is high as expected. Therefore, it is necessarily
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required for business to take corrective measures with the motive to deal with situation such as
variance.
4.2 Preparing operating statement reconciling budgeted
Reconciliation statement is prepared with the motive to identify the main cause of
variance. Statement of reconciling of Jeffrey and Sons is as follows:
Particulars Amount (in £)
Budgeted profit 3040
Less: Variance of sales -180
Less: Variance of cost -60
Add: Labor 110
Less: Overhead -100
Actual profit 2810
Operating statement for May
£ £ £
Favorable Adverse
Sales volume variance 1120
Sales price variance 180
Material price variance 0
Material usage
variance
60
Labor rate variance 70
Labor efficiency
variance
40
Fixed overhead
expenditure variance
100
Total variance 110 F 1460A
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Total net variance -1350
Budgeted operating
profit
4160
Less: Net variance -1350
Actual operating profit 2810
After developing reconciliation statement it has been found that actual profit of
organization is less than £230 and it is one of the main reason behind decrease in sale price of
enterprise and rise in overhead consumption and material.
4.3 Findings to the board of directors
To: Managing Director
From: Finance manager
Subject: Responsibility centers report of company
Date: 25th Jan 2016
After preparing reconciliation statement overall performance of the business has been judged where it is
necessary for each and every department to develop effective strategies so that situation of variance can
be avoided easily.
For sales department it is required to estimate proper sale price so that situation of variance can be
avoided. Further, conducting market research is also appropriate for business through which sale price of
product can be determined easily. This can enhance overall performance of business. Further, in case of
production department it is required to deal with situation of excess material consumption. By employing
advanced tools wastage can be reduced and profitability can be enhanced. At last, human resource
department is also required to take actions as it is showing variance due to decrease in labor charges.
CONCLUSION
The entire study being carried out has supported in knowing about the concept of
management accounting. Further, it has assisted in knowing performance of Jeffrey and Sons in
the market where business is required to take appropriate actions with the motive to avoid
situation of variance. Budgeting techniques such as zero base, incremental etc are appropriate for
business through which corrective actions can be taken for performance improvement. Apart
from this, the techniques present such as total quality management, Kaizen costing etc are
appropriate through which business can reduce cost and can enhance quality level.
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