Management Accounting & Control - Assessment

Added on - 21 Feb 2021

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ManagementAccounting &Control Assessment
Table of ContentsIntroduction......................................................................................................................................4Task 1-............................................................................................................................................4a. determine the production plan which will maximize the weekly profit of Lazy King Ltd andprepare a profit statement showing the profit your plan will yield.............................................4b. applying a response drawn from a relevant academic research, critically analyse how couldLazy King Ltd adopt Economic order quantity (EOQ) , Margin of safety and Just-in-time incost reduction...............................................................................................................................6c. critically evaluate and discuss by use of the balance score card (BSC)...................................7Task 2...............................................................................................................................................9(a)- Analysis of different investment options..............................................................................9Net present value (NPV):............................................................................................................9(b) Benefits and limitation of each financial performance measures.......................................10(c) Dysfunctional consequences of short-term financial performance measures and criticallydiscuss the adoption of balance score card (BSC) in reducing short-term orientation..............13Conclusion....................................................................................................................................14References......................................................................................................................................14
IntroductionManagement accounting plays a vital role in the development of a business. It enablesthe coping mechanism of an organisation by providing a range of qualitative and quantitativesolutions to the chronic problems (Bresser and Bishop, 2019). This report is dedicated on thelocus of management accounting control systems and their assessment. This study will introducevarious tools and techniques used by the organisations in modern world to reduce cost andmaximise profits. For the purpose of emancipating management accounting principles in realscenario, Lazy king limited is chosen which is engaged in plastic chair manufacturing business.The firm is searching for alternatives to reduce costs and increase profits. And in scenario two,KADlex consultancy PLC is engaging in three investments options and the possible solution toenhance performance of each investment option. The final estimation of financial performanceof proposed investment venues will heavily be based on the inferences from strategicmanagement accounting techniques and principles, quantitative models and advance theoriespractised by the managers all over the globe. The generous attempt would seek to deriveimportant aspects of management accounting in dealing with real business scenarios.Task 1-a. determine the production plan which will maximize the weekly profit of Lazy King Ltd andprepare a profit statement showing the profit your plan will yieldProduction plan: Production plan is a planning schedule which is used to manageproduction and operations activities as per the manufacturing capacity of the plant and clientsdemand. This plan is made to ensure that all factors of production like raw materials, labour,machinery, tools and equipments etc. are available at all times during the production process toensure smooth flow of processes (Bromwich and Walker, 2018). This planning method focuseson estimating future demand of the products through trends, fads, customer preferences, plantcapacity etc. There are a number of production plans which can be devised by the organisation.Some of them are as introduced :Job method :As per this method, the manufacturing task is either handled by a workeralone or in a group of workers. This method suffices for a small scale manufacturing firm wherethe tasks are not much skilled. Chefs, saloons, tailoring etc. are the businesses which primarily
use job method. This method is customer centric where the work is to performed as per the needsof a customer.Batch method :Under this method, the goods are produced in batches. It suffices thedivision of labour into parts. Goods are produced in equally divided time schedules which isbased on the labour-hour relationship. A batch contains a number of bundles of products. Once abatch is produced, the production of next batch starts. It is most commonly used by electronicgoods manufacturing firms.(Chastek and McGregor, 2012)Flow method :This method is focused on the continuous flow of goods from one stageof production to another stage without much interference from the labour. This method reducesthe time lag, labour costs and raw material wastage. With the help of advance infrastructure andmodern technology the work flow is automated to full capacity where all the processes happensin a simultaneous chain.RankingProductQtyMcHr/UnitTotal McHrCont/unitTotal Con1Leather300390042126002Metal3004120052156003Wood220511006013200320041400TFC*69300Loss-27900SalesshortfallUnit contAdditional costsNet contRevisedcont3Wood806070-10-8004Plastics3005582.5-27.5-8250Extrabenefits/Loss(-)-9050BLHrF/Ohd385018W1Cost analysisPWwoodplastics
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