Management Accounting

This document looks to outline the significant findings and the end results that have been generated by taking assistance of the plans and strategies that have been implemented by the “Empire Group” by considering the effect of the profits and the expenses that is in association to accounting.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author’s Note:

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MANAGEMENT ACCOUNTING
Answer to Question No 5 (Strategic Management Case Study)
Requirement i:
i) Analysis of Empire's Group:
Particulars Cost p.u. Amount Amount Cost p.u. Amount Amount
Total Sales Volume 3000000 3900000
Gross Sales Value $15.00 $4,50,00,000 $15.00 $5,85,00,000
Less: Rebate $0.00 $0 -$0.80 -$31,20,000
Net Sales Value $15.00 $4,50,00,000 $14.20 $5,53,80,000
Prime Costs -$5.00 -$1,50,00,000 -$5.00 -$1,95,00,000
Manufacturing Costs:
Fixed -$5.58 -$1,67,40,000 -$4.29 -$1,67,40,000
Variable -$0.62 -$18,60,000 -$0.62 -$24,18,000
Total Manufacturing Costs -$6.20 -$1,86,00,000 -$4.91 -$1,91,58,000
Logistic Costs:
Fixed -$1.35 -$40,50,000 -$1.04 -$40,50,000
Variable -$0.15 -$4,50,000 -$0.15 -$5,85,000
Total Logistics Costs -$1.50 -$45,00,000 -$1.19 -$46,35,000
Total Costs -$12.70 -$3,81,00,000 -$11.10 -$4,32,93,000
GROSS PROFIT $2.30 $69,00,000 $3.10 $1,20,87,000
Tootbrush Factory Total Assets $4,00,00,000 $4,00,00,000
ROTA 17.25% 30.22%
Before Strategy Implication After Strategy Implication

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MANAGEMENT ACCOUNTING
Requirement ii:
ii) Analysis of Death Star Manufacturing:
Particulars Cost p.u. Amount Amount Cost p.u. Amount Amount Cost p.u. %
Total Sales Volume 2400000 1725000
Prime Costs $5.00 $1,50,00,000 $5.00 $86,25,000 $0.00 0.00%
Manufacturing Costs:
Fixed $5.58 $1,33,92,000 $7.76 $1,33,92,000 $2.18 39.13%
Variable $0.62 $14,88,000 $0.62 $10,69,500 $0.00 0.00%
Total Manufacturing Costs $6.20 $1,48,80,000 $8.38 $1,44,61,500 $2.18 35.22%
Logistic Costs:
Fixed $1.35 $32,40,000 $1.88 $32,40,000 $0.53 39.13%
Variable $0.15 $3,60,000 $0.15 $2,58,750 $0.00 0.00%
Total Logistics Costs $1.50 $36,00,000 $2.03 $34,98,750 $0.53 35.22%
Total Costs $12.70 $3,34,80,000 $15.41 $2,65,85,250 $2.71 21.35%
Before Strategy Implication After Strategy Implication Increase/(Decrease)
Requirement iii:
This document looks to outline the significant findings and the end results that have been
generated by taking assistance of the plans and strategies that have been implemented by the
“Empire Group” by considering the effect of the profits and the expenses that is in association to
accounting. The analysis of the strategic integration addresses the fact that the total sales volume
of “Star Wars” electronic has been seen a massive rise as the sales volume has increased from
“3000000 to 3900000”. It is even observed that in the similar manner the total cost of the
company has been seen to rise and therefore the cost has increased from “$38100000 to
$4329000”. However, there has been an observation that the gross profit of Star Wars has been
rising and the value has increased from “$6900000 to $12087000” and hence this explains that
there has been a significant rise in the in the return on the overall assets and the percentage has
been 30.22%.

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MANAGEMENT ACCOUNTING
It is seen that following to the introduction of the strategy, there has been a converse
impact in the sales volume for Death Star in their production. In the same manner, a fall has been
observed in the total cost of production and the value has decreased from $14880000 to
$14461500. In addition, there has been a decline in the total costs. Therefore, it can be stated that
there is an existence of a positive impact on the return on the total assets and the sales volume of
the toothbrushes that are manufactured by “Star Wars”. Hence, it is recommended to move ahead
with the changes that have been realised and this implementation can be undertaken by the
strategic committee of the organization.

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MANAGEMENT ACCOUNTING
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