Management Accounting: Monthly Report Evaluation and Online Store Decision

Management Accounting

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Monthly report evaluation that present the flexible and original budget variances........................1
Computation of the financial year performance of the business by using monthly control report
that are mentioned above:................................................................................................................3
Recommendation that are given to the manager of the Amana Ltd for improving the path. ........5
PART B............................................................................................................................................5
Examination of the decision of the Mr Amana Ltd. Regarding the opening of a online store and
elaborate the settlement of online merchandise with Amazon by observing the total cost.............5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
A budget refers an an ideal which mentions the level for earning of human being and the
corporation. This assist in evaluating the need of the money which will needed in an
organisation. This is a process to examine the capability of a business firm which expend money
in a particular time which is set up through an organisation. Budget will be utilized to predict the
position of financial of business and results in further time period(Hiromoto, 2019). This help to
planning and analyse the performance or action of a company which can involve in expansion of
fixed assets, functioning of training to the workers, setting up plan which is related to bonus and
many more. The budget is being made on the basis of need of the company such as quarterly,
monthly, half yearly and many more. This is very essential part to make a budget before putting
action in plan of the project. This consists of expenses list and revenue. This process assist for
earning the profit and to control over expenditure too. In this report, the discussion or
examination mention the statement which is made on the base of the month and prepare or make
the budget for Amana Ltd. That are evaluate and estimated the differences and variances.
Examination of this performance or action which have been done in the time of pandemic.
PART A
Monthly report evaluation that present the flexible and original budget variances.
 Monthly control report - This helps in providing the important data that keeps both the
cost direct and indirect such as wages, expenditures, salaries and overheads. This report
helps in evaluating the operation activities cost for selecting the other cost that how to
reduce the activity cost. It helps in furnishing of the internal data of the business that
connects with the upcoming income of the business or that can occur in the
future(Hutahayan, 2020). These type of income occur in the specific time period in the
upcoming future . This report is basically prepared on monthly basis. This report assess
the financial performance of the company. It aids organisation in taking correct decision
in order to reduce the variance.
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 Original budget - This budget is totally depended on the past information that appeared
the production and value level in last time. Managers of the business found this a very
easy and simplest way to evaluate the performance of the business entity in the
upcoming future budget. This helps in analysing the earnings and the flow of income in
the future organisation. This describes the difference between the fixed budget which
can not be flexible and the real budget for identifying the status of the income and
expenditures of the business firm .
 Flexible budget - This budget helps in adjusting the actual levels of revenue. This
budget is also known as variable budget . This budget prepares a financial plan of
prescribed revenues and values on the actual amount of output. This adjust the volume
level of the company . This budget comes into force after completing the financial
budget. It assist to focus on the specific cost that can be create in the business enterprise.
It decides the variable and constant cost according to the actions. Flexible budget is
distributed into two parts that is variable and semi variable. Variable cost are fluctuating
and the semi variable cost are both fixed as well as variable also.
 Budget Variance - This shows the difference between the estimated and real budget.
Budget variance is favourable when the actual expense is less than the budget and the
actual revenue is higher than the budget(Mahmoudianand and et, al., 2021). This an an
term of accounting which determines example where actual costs are may be higher or
lower than the predicted cost. Analysis of budget variance will determine the reason of
failures. It helps in identifying the trends to bring success in the company . A negative
impact of budget variance will reclined toward the shortfall of budget.
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