(PDF) Impact of Management Accounting Techniques

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Scenario 1a.......................................................................................................................................1
Question 1...................................................................................................................................1
Question 2...................................................................................................................................2
Scenario 1b.......................................................................................................................................3
Question 1...................................................................................................................................3
Question 2...................................................................................................................................4
Question 3...................................................................................................................................4
Scenario 2.........................................................................................................................................5
Question 1 Establishing the potential demand for the planned flights........................................5
Question 2 Distinguishing between business and pleasure travellers.........................................5
Question 3...................................................................................................................................5
Question 4...................................................................................................................................6
Recommendation:.......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Implication of management accounting techniques which in turn will be helpful and
effective as to have satisfactory rise in the income and efficiency in business performance. In the
present report there will be discussion based on analysing the financing for Derwent Ltd
Manufactures Telecommunications and their operational practices in US and Australia. There
will be several analyses which will bring the effective information in relation with improving the
operational income as well as analysing the fruitful income sources in both the divisions.
Scenario 1a
Question 1
Particulars details Amount (in $)
Reduction in taxes of Australia 35% * $1
= $0.350
Rise in import duties of US 15% * $1
= $.150
Less: Reduction in US taxes 40% * 1.10
= .440
Tax payments 0.060
Particular details Full manufacturing cost Market price
Australian division
Sales Revenues 800 * 10000 = 8000000 950 * 10000 = 9500000
Expenses
Manufacturing Expenses (800 *
10000)
8000000 8000000
Operating income 0 1500000
Less: Tax @ 35% 0 525000
Operating profit after tax 0 975000
1

US division
Sales Revenue (10000 * 1150) 11500000 11500000
Expenses
Transferring Expenses 800 * 10000 = 8000000 950 * 10000 = 9500000
Import duties @ 10% of
transferred in price
80 * 10000 = 800000 95 * 10000 = 950000
Total cost (transferring cost +
import duties)
8800000 10450000
Operating income (Revenue –
expenses)
2700000 1050000
Less: Tax @ 40% 2700000 * 40% = 1080000 1050000 * 40% =
420000
Profit after tax (operating
income – tax)
1620000 630000
Question 2
Particular details Amount (in $)
Full manufacturing cost per unit 800
Market price 950
Average price (800 + 950) / 2
= 875
Particulars Amount (in $)
US division
Sales revenue (10000 * 1150) 11500000
Expenses
2