Management Accounting (ACC00146 )

MANAGEMENT ACCOUNTING

Contents
Introduction......................................................................................................................................3
Overview of the expected results in 2019........................................................................................4
Analysis of contribution margin of the products.............................................................................7
Analysis of cash position of the business........................................................................................8
Analysis and predictions of 2020..................................................................................................10
Conclusion.....................................................................................................................................11
References:....................................................................................................................................12

Introduction
The management of the company prepare different kind of budgets in order to plan its
expenditure. If the expenditures are properly planned, then the production facility can be carried
out smoothly and efficiently. The budgeted data of “on the beach” manufacturers has been used
for this assignment.. The budgets that have been prepared in this report are on the basis of these
projected data. Budgeting is a component of financial planning which helps the management in
achieving its objectives. The preparation of budgets is a complex task which includes collection
of important information and then the application of such data in order to obtain useful
information. The projected result of the manufacturers is shown in this report.

Overview of the expected results in 2019.
The projected data from various segments has been taken to calculate the results of the next year.
To begin with its financial planning, the company has first estimated the number of units that are
expected to be sold in the upcoming year.
The graph provided below shows the number of units that the company expects to sell next year
(2019).
Jan/19
Feb/19
Mar/19
Apr/19
May/19
Jun/19
Jul/19
Aug/19
Sep/19
Oct/19
Nov/19
Dec/19
Jan/20
Feb/20
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
One-piece
Board shorts
Towels
Beach Bags
It is clearly visible in the graph provided above that the demand for goods that has to be sold will
be higher in January but it is expected to decline in the following months. Taking into
consideration the expected sales volume, all the other function such as purchase, distribution and
production has to be planned. The estimation of production units will have a direct impact on the
purchase of raw material and hiring of labour [ CITATION Atk12 \l 1033 ].
It has been planned by the management that the inventory level maintained will be equal to 50%
of the next month’s inventory demand. On the basis of this plan by the management, the
production units are calculated.