Analysis of Budgets and Activities in Management Accounting

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author’s Note:

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MANAGEMENT ACCOUNTING
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Analysis of the Budgets and its Activities...................................................................................2
Potential Reason and Recommendations.....................................................................................4
Market Research on Party Planning Industry..............................................................................5
Conclusion.......................................................................................................................................5
Reference.........................................................................................................................................6

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MANAGEMENT ACCOUNTING
Introduction
The main purpose of this assessment is to analyse the fixed and flexible budgets which is
prepared for Perfect Parties which is engaged in the business of organising parties for the
customers. The assessment would be analysing the variances which are present between the
actual results and the flexible budgets which is prepared by the management of the company
(Bragg, 2014). The assessment would be comparing the results of the business with other
companies which belong to the same industry.
Discussion
Analysis of the Budgets and its Activities
Planned Budgets are prepared by a business for the purpose of forecasting and planning
for anticipated revenue and expenses for the business during the period. The management of
Perfect Parties has formulated a planned budget considering the number of parties for the period
which is considered to be 80 parties. On the basis of this number of parties, the management has
based the revenue of the business and also all the costs which is incurred by the business
(Sandalgaard & Nikolaj Bukh, 2014). The main source of revenue from the fees which is
collected from the client for the parties. The major expenses which is anticipated by the
management of Perfect Parties are food expenses, supplies, rent, wages and salaries of personnel
and depreciation of the equipment used by the business.
The actual performance of the business for the period comprise of 92 parties and
therefore the cost and revenue figures also change and do not conform with the budgets which
was set by the management. The main reason which can be identified for such variances is due to
the change in the activity level. Therefore, in order to make effective comparison between the