Management Accounting: Monthly Control Report and Analysis of Amana's Performance

Management
accounting

Table of Contents
SSINTRODUCTION ......................................................................................................................3
TASK...............................................................................................................................................3
Part A...............................................................................................................................................3
Preparation of monthly control report of Amana's Ltd...............................................................3
Analysis of Amana's performance during the year 2020............................................................5
Recommendations for improvement...........................................................................................6
Part B...............................................................................................................................................8
Analysis the Amana's decision....................................................................................................8
To give the advice of the Amana's to established the commercial enterprise through on line
shop or sell on amazon................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The term management accounting represents a merger of two words management and
accounting. Management refers to the function of planning and controlling while accounting
refers to record, analysis and presenting of various financial transactions. In this content that
form of accounting is called management accounting. Management accounting is concerned with
presentation of accounting information in a manner which can assist the management in creation
of policy and decision making. It is an integral part of management concerned with identifying,
presenting and interpreting information used for formulating strategy, planning and controlling
activities, decision making, optimum use of resources, discloser to employee and safeguard
assets (Albergaria, 2020). In this report, to prepared the monthly control report of Amana's Ltd
which is situated in England ans sells souvenirs to tourist. This report also includes the decision
of Amana's Ltd if they should business on amazon and set up their own business.
TASK
Part A
Preparation of monthly control report of Amana's Ltd
Budget:
 it is an item wise estimate of income and expenditure of the government for a fixed
period of time that is Annual financial statement.
 A budget is basically a financial plan for defined period, normally a year.
 A plan of operation based on those estimates.
 An instrument of fiscal policy for the government.
 One of the major instruments by which the use of public resources are planned,
controlled and public welfare are delivered.
Features of budget:
1. It is basically a policy statement funding to different program scheme reflect policy
decisions. Fiscal policy is solely impressed through budget.
2. Budget is presented on a particular day of year, the budgeting process continue round the
year (Banker, Fang and Mehta, 2020).
3. Till 2016 Railway budget was presented separate from general budget.

4. Budget is finest example of how executive and legislative collaborate in policy process in
democracies.
5. Budget is not everything about Indian economy. The monetary policy are managed by
RBI, outside the budget. It is only about government income and expenditure but does
not include income and expenditure investment of private sector.
6. Importance of budget is further diluted due to GST and major tax proposals and program
announcements outside budget (Bescos, Deville and Foulquier, 2020).
Function of budget:
 Resources are allocated to different sectors and segments of population as per the society
needs and priority.
 Progressive taxation and subsidies are the way of income/ wealth distribution.
 By tweaking fiscal policy demand is increased/ decreased to stabilize economy.
The budget can be classified into the various parts such as production budget, sales
budget, fixed budget and flexible budget. But to calculate the monthly control report of Amana's
Ltd, only to discuss of two budget such as flexible and fixed budget.
Flexible budget- Flexible means adjustable and budget refers to an anticipated plan made for the
financial activity of the entity. Therefore, the flexible budget is a financial plan created for
different activity levels. It is changed as per the activity level or production of units.
It is more useful and an effective tool for cost control. It clearly shows the impact of expenses on
operations and it helps in accurate forecasts. It is a series of static budgets for different levels of
activity. Such budgets are especially useful in estimating and controlling factory costs and
operating expenses. It is more realistic and practicable because it gives due consideration to
behaviour of revenue and cost at different levels of activity. While preparing the flexible budget,
the expenditures can be classified into three parts such as fixed, variable and semi variable
(Borba and et.al, 2021).
Fixed budget- A budget prepared on the basis of standard or fixed level of activity is known as
fixed budget. It does not change with a change in the level of activities. Thus a budget prepared
on the basis of standard or fixed level of activity is known s fixed budget. It becomes an
unrealistic yardstick in case the level of activity actually attained does not confirm to the one
assumed for budgeting purpose. The management will not be in a position to assess the