Management Accounting: Purpose, Budgeting, and Variance Analysis

Management
Accounting

Table of Contents
Introduction......................................................................................................................................3
3.1 Purpose of budget......................................................................................................................3
1. Schedule of expected cash collections.....................................................................................4
2. Schedule of expected cash disbursement.................................................................................4
3. Cash budget for September......................................................................................................4
3.2 Flexible budget..........................................................................................................................5
4.1 How organizations are adopting management accounting systems..........................................5
i. Return on capital employed (ROCE)........................................................................................5
ii. Asset turnover..........................................................................................................................6
iii. Operating profit margin..........................................................................................................6
4.2 Improvement of financial performance.....................................................................................6
4.3 Planning tools in management accounting................................................................................8
4.4 Importance of variance analysis................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

Part 2
Introduction
Osbarr, a web group that buys in distributed computer systems. The monthly rental costs for the
cloud have been extended. Web group leaders can use financial plans to ensure cost increases are
too expensive and have chosen to reduce and increase operating costs. Maintaining management
books examines the gradual benefit of extended creation: this is called margin analysis. This
results in fair review, which involves creating the business mix margin of effort to determine the
size of the unit that has a total transaction. An administrative custodian will use this data to
determine the point of value for objects and administrations.
3.1 Purpose of budget
Definition
Design is the way to organize the payment of your money. This spending plan is called a
financial plan. Making this spending plan will allow you to decide in advance whether you will
have enough money for the things you need to do or want to do. An expense plan is an
assessment of income and expenses for a predetermined period in the future and is generally
prepared and reconsidered from time to time. Financial plans can be made for an individual, a
group of individuals, a company, an administration, or just about anything else that makes and
goes through money.
Purpose of the budget
2. Anticipate the future financial position of the company and the future need to use the assets in
the business with the ultimate goal of keeping the company dispersed.
3. Select the piece of capitalism to ensure that assets are affordable at a reasonable cost.
4. Organize the efforts of the different departments of the company towards the usual objectives.

5. Accelerate the productivity of operations of various offices, departments and the cost of the
company.
6. Determine the responsibilities of the various department heads.
7. To bind an executive command regarding the finances, shares and contracts of the company, e
8. Promote the integrated management of the company through the budget framework.
Design work usually begins with contract evaluation because a company's overall function
depends on contracts. Negotiating the contract requires an assessment of the current market
situation and a forecast of a person's thoughts about what the future market situation for which
the financial plan is proposed might be. A little bit inside just like the external variables.
1. Schedule of expected cash collections
Schedule of expected cash collections for September
September October November
Cash on sales £9,000
£900 £7,200 £6,300 £14,400
2. Schedule of expected cash disbursement
Schedule of expected cash disbursements for September
September October November
Purchases £24,000
£4,800
3. Cash budget for September
Cash Budget for
September
Cash in hand £20,000
Cash sales £39,000
Estimated cash £900