Management Accounting Project 2 Report

Accounting Project 2
Report

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Provide a monthly control summary including the initial estimate, the flexible spending plan,
and the variations.........................................................................................................................1
For the financial year 2020, evaluate the control analysis and examine Amana Ltd.'s
productivity..................................................................................................................................2
Make additional recommendations to Amana's CEO about how to improve the sectors that it is
lacking..........................................................................................................................................4
PART B...........................................................................................................................................5
Explanation of the decision on whether Amana Co. must open its personal digital storefront or
take the opportunity to do so with other firms that are operational like Amazon.......................5
REFERENCES................................................................................................................................8

INTRODUCTION
The accompanying research investigates Amana ltd's capability for the fiscal year 2020, as
well as the misunderstandings which it has made in its operations (Al-Dmour, Zaidan and Al
Natour, 2021). It also indicates the differences between the initial statistics and the flexible
budgeting analysis, along with the appropriate comments and ideas. In addition, the study
identifies the problem sectors which have to be addressed. Essentially, this paper discusses
variations and techniques for controlling these discrepancies by giving significant information
for every component. Furthermore, it elucidates how a company's gross income margin impacts
its net income. It also explains the advantages and disadvantages of starting your own internet
firm and marketing your goods through current digital channels.
PART A
Provide a monthly control summary including the initial estimate, the flexible spending plan, and
the variations
On a regular foundation, the monthly control statement reflects the firm's operating and fiscal
achievements. Such statistics assist the organization in determining the expense, activity, and
output. It's a concise and also thorough method to listing the important goals and priorities for
the coming weeks and months (Alsharari, Dixon and Youssef, 2015). This might aid in the
advancement and consistent performance of a firm.
 The initial spending plan is accepted at the beginning of the budgeting process. The
modifications for all forms of deposits, carry-forward sums, grants, acquisitions, as well
as other administrative modifications relevant to the budgeting process are included in
this plan.
 Flexible budgeting: A spending plan which adapts or adjusts in response to variations in
quantity or engagement (Andarwati, Nirwanto and Darsono, 2018). When contrasted to a
fixed spending plan, this is thought to be the most beneficial. The flexible spending plan
would respond to variations in expense and engagement since it uses an adjustable price
per component of engagement rather than a set price. This is the most appropriate way to
assess a supervisor's effectiveness.

 Variable spending plan: The fluctuation spending plan analysis assists an organization in
identifying the cause of variances. In a nutshell, this paper explains when real expenses
diverge from the conventional expenses (Armitage, Webb and Glynn, 2016).
Amana ltd's monthly control summary is shown underneath for the year 2020
AMANA LTD
Monthly Control Report
Particulars
Original
Budget
Flexed
Budget Variances Variance (%)
Revenue 2500000 1600000 -900000 -36.00%
Less: Cost of Goods Sold 800000 840000 40000 5.00%
Raw Material 250000 280000 30000 12.00%
Direct labor 400000 440000 40000 10.00%
Overheads 150000 120000 -30000 -20.00%
Gross Profit 1700000 760000 -940000 -55.29%
Less: Non- operating / Fixed
Expenses
350000 305000 -45000 -12.86%
Warehouse rental 200000 170000 -30000 -15.00%
Insurance 100000 100000 0 0.00%
Full time Warehouse Supervisor
salary
50000 35000 -15000 -30.00%
Net Profit 1350000 455000 -895000 -66.30%
For the financial year 2020, evaluate the control analysis and examine Amana Ltd.'s productivity
The productivity of Amana ltd is demonstrated in the previously provided analysis for the
2020 fiscal year. The assessments in the study indicate the production capability of Amana ltd's
projected processes and projects (Bloom, Sadun and Van Reenen, 2016). It also depicts how this
firm has dealt with flexible budgeting deviations and how it has projected spending and earnings
in addition to helping the corporation analyze the effectiveness of its commercial venture. The