Management Accounting: Analysis and Recommendations

This article provides an analysis of Amana Ltd's performance in 2020 and recommendations for areas of improvement. It also discusses Mr. Amana's decision to go online and advises on setting up an online business.

MANAGEMENT ACCOUNTING

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Amana’s performance during the year 2020............................................................................................5
Recommendations to areas for improvement...........................................................................................6
PART B.......................................................................................................................................................7
Provide an analysis of Mr. Amana’s decision to go online and advise to set up online business.............7
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
The internal control of the financial expertise and system operations of the business is
demonstrated by strategic management (Pasch, 2019). Management accounts are used only for
key core employees and represent the only difference between them and management of business
processes. The Financial Directorate shall communicate the credit statements and files, refunds
and relative financial statements with the senior executives in this phase. The analysis was
focused on Amana Ltd, a Latin company that sells tourist mementos. Recent time, the Covid-19
virus spread out in England, leading the government to limit travel and transport, which had a
significant effect on tourism. The current and initial budget projection is also done. The Covid 19
outbreak recently broke out in England, allowing the company to curb transport and movement,
which has a drastic impact on tourism. This article includes the real and initial estimates of the
cash plan and the latest performance. The report suggested modifications in conjunction with
them.
MAIN BODY
A document on the financial results is the management forecast which forecasts, based on past
total earnings and projected benefits and costs, the actual income and expenditure during the year
(Tan, 2019). In other terms, an appraisal reveals how real and anticipated industry results are.
Regulation at the conclusion of the monitoring period gives this article a chance to see if there is
notable change between the forecast forecasts recorded at the start of the proceedings and the
real statistics. This is a valuable tool because it allows managers to identify which areas of the
company meet spending targets and which locations or divisions must be change.
Particulars
Cost per
unit Original Flexed Actual Variances
Units 100,000 80,000 80,000
Selling price 25 25 25 20 -5 UF
Revenues 2,500,000 2,000,000 1,600,000 (400,000) UF
Variable costs:
Materials 2.5 250,000 200,000 280,000 80,000 UF

Labor 4 400,000 320,000 440,000 120,000 UF
Overhead 1.5 150,000 120,000 120,000 -
Contribution 17 1,700,000 1,360,000 7,600,000 6,240,000 UF
Fixed
Warehouse rental 200,000 200,000 170,000 (30,000) F
Insurance 100,000 100,000 100,000 -
Fulltime warehouse
supervisory salary 50,000 50,000 35,000 (15,000) F
Profit 1,350,000 1,010,000 7,295,000 6,285,000 F
Amana’s performance during the year 2020
It is evaluated by the production study, which identifies contradictions between the original and
the actual budget, as well as differences. The number of forecasts varies enormously, affecting
judgment widely. The Department of Finance has a plan of between 100,000 and 80,000
production units 250,000 direct-source firms, 400,000 staff and 150,000 staff. However, the
average total does not match and deviations can be found. In particular, the problems are rising.
Some situations are advantageous and others are detrimental:
 providing Better workforce satisfaction by assessing work efficiency in appreciation of
job satisfaction and by training staff in promotional skills and marketing items to ensure
that purchasers make more transactions simultaneously.
 Create new products by researching what consumers want to do.
 Search for new customers: prospective consumers would further grow the market.
 Find potential prospects: analyze data to see if it is possible to extend the brand to other
fields.
 Customer respect: create a Customer Care Readiness Plan.

Recommendations to areas for improvement
Amana has recommendations for the different fields of improved efficiency for 2020, for
example:
Costs vary: Depending on the provider’s success, the products or service expense used in this
section can vary. Suppose you are on the market for a dynamic product (Wang, Wan and Wang,
2019). The next step is more of the stuff. Both production market rates, distribution networks for
customer and supply jobs are modified such that demand increases so that it is perceived as
conditional spending.
Fixed rate: A fixed cost is one in which a company often spends the same amount on a specific
cost. Operating costs include land hire, lease and utility fees, employee benefits, phone coverage,
salary software, and hospital costs. These costs should be included in the schedule, and the same
amount of funds must be allotted to cover these expenditures. They will also serve as a good
starting point for debugging if investment taxation does not meet expectations.
Estimated earnings: A critical investment market wherein the appropriate amount of projected
profits is calculated. Plan investment plans and agree both on the short and long term based on
the number. They are the projected sales from the selling of products and services by a company.
Revenue combines the forecasted demand and the projected cost of products manufactured or
services rendered. When the company has been in operation for more over one year, experience
will assist you in calculating those elements. If the company is fresh, examine local taxes and use
these statistics to produce some realistic spending. Examine the profits of similar businesses if
the company is not recent. If the company is not recent, look at the profits of related local
businesses and use these numbers to produce reliable sales estimates. However, if the company is
new or established, it is critical to remain realistic in order to prevent underestimation.
Cash flow:
Profit:
Amana CEO has advice on budgeting and management, such as: due to the estimates and budget
projections, it is important to have an open dialogue with all the organizations, so as to reduce
obstacles and get the corporate-human strategy into line.

Include the whole team: Planning tools should work together to provide agencies and branches
with a more comprehensive report (PHORNLAPHATRACHAKORN and NA-KALASINDHU,
2020). Persons in a wave of many divisions, in comparison to those in the financial sector, would
have the knowledge needed to deliver good estimates to render adequate costs. Furthermore, it
takes many perspectives on where we are now and what it would be like in the potential to use
the leadership set.
Take up the role of scenario planner- In the management of an organization, it is important to
make predictions and be capable of adapting to future situations, as well as to improve business
situation. Since markets, technologies, and even competition are both highly volatile and often
turbulent, the CEO must be able to anticipate and deal with their business on a consistent basis.
All products that help to achieve a company's goals should be included in the budget as it is
being prepared.
Accounting is all-encompassing: it's all too easy for CEOs to ignore vital information,
particularly when it's time. Nonetheless, all prices, components, and small goals must be offset in
these systems. As CEO, Amana will keep track of the company's costs, from marketing
promotions to card clip content, during the fiscal year (Korhonen, Laine and Suomala, 2020).
The amount of detail that could add up may be astounding. Find any opportunities for the next
financial year after you have finalized the schedule in the forecast. Pay particular attention to
industry changes rather than relying only on historical facts. Delegate experienced team
members to trends, respond to clients and consumers, monitor competitiveness, and consider
minute characteristics. Delegate experienced team members to trends, react to clients and
consumers, observe competitiveness, and consider the minute details of their results while
presenting business insights.
PART B
Provide an analysis of Mr. Amana’s decision to go online and advise to set up online business
In the UK, Europe, and the USA, Mr. Amana has now found a number of his rivals to market
their products to consumers online. Amana also suggested shutting stores in Bristol, in the city
centre and Manchester to speed up commercial operations and shift 50 percent of revenue from
the Internet. It is recommended that Mr. Amana establish a business and sell the Amazon offer.

Cost savings: The most significant benefit of running a successful enterprise over establishing a
conventional organization is the cost savings. Although premiums are charged to obtain a logo
and build a website, the costs of renting and client services are minimal.
Reduced Employee requirements: The boss, on the other hand, must employ a large number of
salesmen in an internet store in a regular store; the whole job is done manually (Birnberg and
Shields, 2020). For example, when buying online, a store owner is not required: the consumer
merely enters the payment information and the item is registered in hours. There is no need for
extra employees when Amana Ltd creates an online business, but the cost is £35000.
Improve revenue: Businesses in an online industry will sell to new buyers all over the country
and in places all over the country. They would, however, need infrastructure to deliver products
and services in these larger areas. While a typical business only sells to those in the immediate
vicinity, the emergence of an efficient market allows it to reach a much broader audience.
Deliveries of 100,000 units a year would be assured, as per theory.
Simple to substitute: When operating an online retailer, internet advertising is easy to grasp,
rendering this the most profitable ecommerce advantages for local consumers. They want to use
a Face book pixel in their social networking sites feeds to target potential clients with
commercials. The Shoelace Shoplift could be used to substitute patients who come into the store
but do not purchase something.
Customized customer interface: Customizing a website will enhance the purchasing experience
even more. One of the primary benefits of operating an online business is the opportunity to
develop customized email ads for a large number of stakeholders. This will entice them to buy
without even any effort on their part (van der Kolk, 2019). It's not because people will stroll into
a retail store and be fed right away. Before you sit back and rest and begin marketing to your
client base, you should make a concerted effort to initiate a campaign.
Sale out products on Amazon
There's a lot to tell about Amazon's incredible variety. Every month, approximately 200 million
people buy stuff on Amazon. The primary justification for 90 per cent of Amazon businesses that
want to "represent my clients as they are" to stay competitive is to be preserved. Since before the

company's inception, Amazon's third-party website has been a primary growth force, accounting
for almost 60% of Amazon's e-commerce revenues. Payment fees of £50000 are required to gain
access to Amazon.
Brands have grown in success on Amazon: Marketing on Amazon will help even big and well-
known stores with heavy traffic volumes (Sunarni and Ambarriani, 2019). Amazon's rivalry far
outnumbers that of any other store, but choosing a location where shoppers are is critical. Does
an organization not want to be situated in a mall where the majority of shoppers shop, such as the
largest mall in any metropolis?
Access to global supply chains: Amazon shipping is yet another advantage to buying on
Amazon. Firms who purchase on the site would benefit from Amazon's massive supply chain
capability. If a company wants to participate in the FBA system for Amazon Sales, it will deliver
products to Amazon, which will then handle the shopper.
Amazon sale continues to reactivate products with the same distinguishing qualities that set them
apart. How often did you spend on Amazon without acknowledging the existence of the fifth
vendor? With an emphasis on the branded goods and user feedback, Amazon decreases brand
visibility. As I went to Amazon to purchase something lately, a seller's deal that I had never
heard of appeared in the search row.
Simply adhering to sales tax: In the number of countries, stores are also required to raise and pay
sales tax in accordance with market connection laws. The Trade Director Legislation requires
most countries to raise and collect sales tax on behalf of fifth retailers. However, it will also
necessitate the registration and filing of records with the Tax Agency by swap companies. Sales
tax reduction will benefit both coordinators and buyers.
Rich consumer knowledge: One of the advantages of selling on their own pages is the ability to
gather valuable usage statistics that they would not have access to if they sold on Amazon.
Clients' rich knowledge, for instance, may be used to give them access more customized services
and goods (Somjai, Fongtanakit and Laosillapacharoen, 2020). When questioned what step they
were most inclined to take, the most popular response was to purchase the custom particular
brand (51 percent), accompanied by commitment to the brand (54 per cent), and to various

marketing strategies for others (46 percent). Rich consumer data that allows brands to function
will transform the lives.
Conclusion: After reviewing this, it is recommended that you begin your own online business
from which your specific name is taken. Furthermore, it allows for the creation of one's own
market share as well as direct communication with customers, which aids in the acquisition of
new customers.
CONCLUSION
According to the preceding report, management accounting is critical for all corporate practises
that lead to achieving good outcomes in a variety of ways. The numerous benefits of an online
store and Amazon sales are mentioned.

REFERENCES
Pasch, T., 2019. Strategy and innovation: the mediating role of management accountants and
management accounting systems’ use. Journal of Management Control, 30(2), pp.213-
246.
Tan, H.C., 2019. Using a structured collaborative learning approach in a case-based management
accounting course. Journal of Accounting education, 49, p.100638.
Wang, S., Wang, H. and Wang, J., 2019. Exploring the effects of institutional pressures on the
implementation of environmental management accounting: Do top management support
and perceived benefit work?. Business Strategy and the Environment, 28(1), pp.233-243.
PHORNLAPHATRACHAKORN, K. and NA-KALASINDHU, K., 2020. Strategic management
accounting and firm performance: Evidence from finance businesses in Thailand. The
Journal of Asian Finance, Economics, and Business, 7(8), pp.309-321.
Korhonen, T., Selos, E., Laine, T. and Suomala, P., 2020. Exploring the programmability of
management accounting work for increasing automation: an interventionist case
study. Accounting, Auditing & Accountability Journal.
Birnberg, J.G. and Shields, M.D., 2020. Journal of Management Accounting Research at 30
years: reflections on its context, creation, challenges, and contributions. Journal of
Management Accounting Research, 32(1), pp.1-10.
van der Kolk, B., 2019. Ethics matters: the integration of ethical considerations in management
accounting textbooks. Accounting Education, 28(4), pp.426-443.
Sunarni, C.W. and Ambarriani, A.S., 2019. The Pricing Practices: Management Accounting
Perspective. Review of Integrative Business and Economics Research, 8, p.84.
Somjai, S., Fongtanakit, R. and Laosillapacharoen, K., 2020. Impact of environmental
commitment, environmental management accounting and green innovation on firm
performance: An empirical investigation. International Journal of Energy Economics and
Policy, 10(3), p.204.