Management Accounting: Budget Analysis and Suggestions for Amana Ltd

Management
Accounting

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART A...........................................................................................................................................3
Prepare a monthly control report that includes the original budget, the flexible budget, and the
variations.....................................................................................................................................3
Examine the control report and evaluate Amana Ltd.'s efficiency in the fiscal year 2020.........5
Make some suggestions for Amana's CEO on how to enhance the company............................7
PART B............................................................................................................................................8
Evaluate after determining if Amana should accept to go online or establish its own online
shop, taking into consideration all of the entity's expenditures..................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
A budget is a procedure of balance revenues, expenditures and corporate goals for a
specific time period. In other words, it is an estimation of how much amount company requires
and how much amount (Ahn, Hoitash and Hoitash, 2020). This report discusses the efficiency
of Amana Ltd company in fiscal year 2020, and if there is any misconception in entity's task or
a complexity in performance, give suggestions to entity's CEO for improving the department's
functions. Therefore, usually, this aids in understanding of company's various risks, and then
they design a strategy plan to fix the firm's interruption. It mainly focuses on organisation's
expansion and development in general. In the second part of this report, analyse what moves
Mr.Amana made to improvise the firm's efficiency, as well as how Mr.Amana establish his
enterprise on his own website or sold his items on Amazon, both of which caused costs for
entity. This report, on the contrary, integrate the idea of a budget. It includes budget analysis and
determining the sum of costs and revenue occurred over a particular period of time. It
significantly expresses how much money a person can spend and save over a specific time
duration.
PART A
Prepare a monthly control report that includes the original budget, the flexible budget, and the
variations.
The analysis presumes the planning of budget in terms of creation, flexibility, and
alterations. Firstly it is essential to determine the monthly control budget. In simple words, the
budget furnishes information which relies on data acquired from the entity's payroll workings.
On the contrary overhead expenses represents the variations in spending and utility. The
enterprise's most essential factor is to assists the owner or the leader in analysing the illustration
of investments made by entrepreneur. Businesses may find it complex to determine its
disclosure. This report also helps the organisation's top department to generate department's
operating cost maintenance and to start to estimate the techniques for reducing business cost and
expenses (Lennox and Wu, 2022).
Original budget: It consists of prepared budget which has been made on the grounds of
previous data or information, cost procured in the past and production level. With the assistance
of this budget the entity find it easier to determine the business performance of the future years.

It also assists to figure out the profits of the enetity in the upcoming period. It also contains the
difference between the static budget and the real or potential figure for the entity's revenues and
expenditures.
Flexible Budget: The budget also concludes the entity's set of performance or levels. In other
simple words, the budget explains the pricing framework that does not changes. When a
flexible budget is generated, it is a continuous adjustment with enterprise variations in
expenditure, and the advantage of this budget is that it assists in reducing money demolition.
More opportunities and quick performance, on the contrary, to alter the market and entity
environment (Malik, and et.al., 2021).
Budget Variance: Generally, this budget assists in consideration of the variations among actual
and original budgets, accompanied with the explanations of existing situation of the entity
and depicting different evolutions in the performance of enetity. These elements assists to
estimate the data which is already utilised by the entity to examine the evaluated, standard
and potential figures. If the variances results in positive that specifies business is in profit
but if it is in negative, then it depicts the wrong effect of the entity that have raised in
standard and real data. It is an accounting term that reports where actual cost is either
increase or decrease than the standard cost. It is estimated by deducting the potential amount
expensed from the amount for every and each line items. It is constantly caused by the
incorrect or bad evaluations or forecast the incorrect budget so the line is against that real
outcomes are estimated is not intellect. Many budget variances can be destroyed through the
primary assemblage of line of the budgets (Meiryani, Susanto and Warganegara, 2019). To
understand about the circumstances of the fiscal year 2020, the workings of initial budget,
flexible budget and variation of budget are represented in the table given below: