Management Accounting Report on Amana Ltd's Efficiency and Online Business Strategy

Management
Accounting

Contents
INTRODUCTION ..........................................................................................................................3
PART A...........................................................................................................................................3
Create 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.............................6
PART B............................................................................................................................................7
Estimate after determining if Amana should accept to go online or establish its own online
shop, taking into account all of the company's expenditures.......................................................7
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
This report discusses the productivity of the Amana Ltd company in the accounting year
2020, and if there is any misunderstanding in the enterprise's task or a difficulty in performance,
provide recommendations to the company's CEO for enhancing the department's operations.
Thus, generally, this aids in the understanding of the organization's numerous challenges, and
then they design a strategy plan to fix the firm's disruption (Pelz, 2019). Its major focus is on the
business's expansion and development in general. In the second section of this report, examine
what moves Mr. Amana made to improve the firm's efficiency, as well as how Mr. Amana set up
his business on his own website or sold his items on Amazon, both of which caused costs for the
company. This report, on the other hand, incorporates the idea of a budget. It covers budget
analysis and determining the sum of costs and income incurred over a specific period of time. It
essentially expresses how much money a person can spend and save over a set length of time.
PART A
Create a monthly control report that includes the original budget, the flexible budget, and the
variations.
The study discusses budget planning in terms of creativity, flexibility, and deviations. First
and foremost, it's critical to comprehend the monthly control budget. In general, the budget
expresses information based on data from the company's payroll operations, whereas overhead
expenses represent changes in spending and their utility (Hiebl, and Richter, 2018). The
company's most significant component is to assist the owner or leader in analysing the sample of
investments made by the entrepreneur. The corporation may find it challenging to comprehend
its disclosure. This report also enables the organization's high department to construct the
department's operating cost maintenance and begin to understand the techniques for lowering
business costs and expenditures.
 Flexed budget: The budget also addresses the company's set of performance or
stages. In other words, the budget discusses the pricing structure that does not alter.
When a flexible budget is created, it is a back-to-back adjustment with firm
fluctuations in expenditure, and the benefit of this flexing budget is that it helps to
reduce money destruction. High opportunities and quick performance, on the other
hand, to transform the market and company environment. Data originality: This

budgeting idea aids in the understanding of previous expenditure and income data.
The budget is made with expenditures in mind, and it also aids in determining the
firm's new income.
Budget Variance: In general, this budget aids in determining the difference between the
actual and original budgets, as well as discussing the current state of the business and
demonstrating different improvements in the company's performance (Korhonen, and et.al.,
2020). To learn about the state of the fiscal year 2020. The workings of the initial budget,
flexible budget, and budget variations are shown in the table below.
AMANA LTD
Monthly Control
Report
Particulars
Original
Budget
Flexed
Budget Variances Variance
(%)
Revenue 2500000 1600000 -900000 -36.00%
Less: Cost of Goods Sold 800000 840000 40000 5.00%
Raw Material 250000 280000 30000 12.00%
Direct labor 400000 440000 40000 10.00%
Overheads 150000 120000 -30000 -20.00%
Gross Profit 1700000 760000 -940000 -55.29%
Less: Non- operating / Fixed
Expenses
350000 305000 -45000 -12.86%
Warehouse rental 200000 170000 -30000 -15.00%
Insurance 100000 100000 0 0.00%
Full time Warehouse
Supervisor salary
50000 35000 -15000 -30.00%
Net Profit 1350000 455000 -895000 -66.30%
Working notes:
Revenue-
Original Budget: 100000 * 25 = 2500000
Actual Budget: 80000 * 20 = 1600000