Analysis of Mr. Amana's Decision to Go Online and Set Up an Online Business

Generic Assessment

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Amana’s performance during the year 2020............................................................................................5
Recommendations to areas for improvement...........................................................................................5
PART B.......................................................................................................................................................7
Provide an analysis of Mr. Amana’s decision to go online and advise to set up online business.............7
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
Management accounting demonstrates the internal management of the company's financial
knowledge and system activities (Tan, 2019). Management accounts are only used by a major
core staff and it is the only distinction between them and financial accounts. During this process,
the finance management expresses with the board members of the business credit declarations
and files, together with receipts and relative balance sheets. This study was based on the Latin
Amana Ltd, which sells tourists souvenirs. The epidemic of Covid-19 recently broke out in
England which prompted the government to restrict movement and travel, affecting dramatically
tourism. The actual and original estimate of the financial budget and current business results are
included in this report. Provide adequately recommended improvements along with them.
MAIN BODY
A report on budget performance is the management estimate, which estimates the actual profits
and expenses of the year on the basis of previous overall earnings, with expected benefits and
costs (Balstad and Berg, 2020). In other words, it is an analysis that shows how the market
outcomes are actual and expected. The management at the end of the financial reporting period
gives this article the opportunity to see if the forecast estimates reported at the beginning of the
process and the actual closing figures are significantly different. Which is an important
instrument because it enables management to determine which parts of the enterprise achieve
expenditure objectives and which places or departments need to be changed.
Particulars Cost per unit Original Flexed Actual Variances
Units 1,00,000 20000 80,000
Selling price 25 2,000,000
Revenues 2,000,000
Variable
costs:
Materials 2.50 2,50,000 3000 2,80,000 (30000)
Labor 4 4,00,000 40000 4,40,000 (40000)

Overhead 1.50 1,50,000 30000 1,20,000 30000
Contribution 17 17,00,000 5400000 11,60,000 540000
Fixed
Warehouse
rental
200000 2,00,000 30000 1,70,000 30,000
Insurance 100000 100,000 Nil 100,000
Fulltime
warehouse
supervisory
salary
50,000 50,000 15000 35,000 15,000
Profit -70000
Budgeted Actual Variances Favorable/
Unfavorable
Units 1,00,000 80,000
Materials 2,50,000 2,80,000 (30000) Unfavorable
Labor 4,00,000 4,40,000 (40000) Unfavorable
Overhead 1,50,000 1,20,000 30000 Favorable
Contribution 17,00,000 11,60,000 540000 Favorable
Fixed
Warehouse rental 2,00,000 1,70,000 30,000 Favorable
Insurance 100,000 100,000
Fulltime
warehouse
supervisory salary
50,000 35,000 15,000 Favorable