Project Report: Management Accounting

This project report covers various aspects of management accounting including bookkeeping services, budgeting analysis, and the importance of budgeting in decision making. It includes a spreadsheet and an email to the directors of an accounting firm. References are also provided.

Running Head: Management Accounting
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Project Report: Management Accounting

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Contents
Task A:..............................................................................................................................3
Part A:...............................................................................................................................3
Part B:...............................................................................................................................3
Email:................................................................................................................................3
Task B:..............................................................................................................................5
Part A:...............................................................................................................................5
Part B:...............................................................................................................................5
Task C...............................................................................................................................6
Introduction...................................................................................................................6
Overview.......................................................................................................................6
Budgeting analysis........................................................................................................6
Conclusion....................................................................................................................7
References.....................................................................................................................8

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Task A:
Part A:
Refer to attached spreadsheet
Part B:
Email:
To: [e-mail]
CC: [e-mail]
Subject: Bookkeeping services
Dear Directors,
Greetings!!
Through conducting the study on the Book keeping services, it has been found that the book
keeping services are offering huge loss to the company. The total profit of the company has
been hampered because of the loss occurred into the book keeping services. In order to
reduce the loss position and improve the profitability level of the firm, a study has been
conducted on “drop of book keeping services from the firm”.
In the study, it has been measured that if the services of book keeping would be dropped by
the business and the focus would be done on the remaining two services of the company
which are taxation and business advisory then the loss situations of the business would be
eliminated by the business.
The study on the taxation and business advisory services only, explains that the few of the
expenses of book keeping services would be entertained by the remaining services of the
business. Through the calculations, it has been measured that the total revenue of the business

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would be $ 19,25,000 in case of dropping the book keeping services and the total profitability
level of the business would be $ 3,92,140. It further explains that the total profit of the
company before the drop of book keeping services are $ 4,65,880 which shows about the
decrement in the profit position of the business by $ 73,740.
It concludes that the book keeping services must not be dropped by the business. The
business could control over the expenses of the business in order to maintain the position of
the business such as the variable cost and fixed cost must be evaluated again and all the extra
expenses s eliminated from the process of the business. This will help the service to come on
BEP level and improve the margin of safety of the business.

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Task B:
Part A:
Refer to attached spreadsheet
Part B:
Refer to attached spreadsheet

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Task C:
Introduction:
The given statement of Terry explains that budgeting process is not worth to conduct
on their business as it is not possible to predict the future of a growing company like T&K
through the budgeting process. No matter how much the analyst tries, it is always impossible
to get the effect result about the future performance of the business.
Overview:
Terry and Kerry are two partners of an accounting firm of T&K which offers various
accounting services such as taxation, book keeping and business advisory to their customers.
The performance of the company is improving at a great extent along with the higher
expenses of the business.
Budgeting analysis:
De Azevedo et al, (2012) explains that one your business is operational in the industry
and the market; it becomes crucial for the business to plan and manage the financial
performance of the business through creating a budget process which is quite effective in
order to manage the financial performance on a track. No matter how much the performance
of the business is fluctuated, an assumption about the improvement of the business could be
done on the basis of the historical changes and the market position of the business.
The statement made by Terry is not at all acceptable as the budgeting process is
always crucial to meet the demand of the business and maintain the financial performance of
the business. The budgeting process planning makes it easier for the business to anticipate the
future problems of the business and make strategies on time to resolve the issues of the
business. It offers the sound financial information of the business on the basis of which better
decision could be made by the management of the company (Hope and Fraser, 2013). It
improves the clarity and focus on the budgeting statement of the business. As well, a great
confidence could be developed by the management in order to make the decision on the basis
of the budgeting reports.
In case of T&K, it has been found that the budgeting reports made it very clear to the
business that how the budgeting reports make it easier for the business to make the decisions.

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Such as, the flexible budget on the taxation services of the business explains that the profit of
the business would be $ 2,18,927 and the actual budget of the business is $ 2,30,598. It
explains that even though, the improvements of the company are not constant but a great
budgeting process makes it easier for the business to identify the budgeted revenues,
expenses and the profitability level of the business so that the company could allocate the
resources on the basis of that and could improve the overall performance of the company.
Through, the budgeting evaluation, it has been found that the management has made
the required changes into the business at initial stage on the basis of the budgeting reports,
such as changes into the PPE, improvement in the staff position etc so that the performance
and the sudden demand of the company could be met by the business and the overall level of
the business could be improved by the business (Shastri & Stout, 2008).
On the basis of the statement of Terry and the evaluation on the articles and
calculations of budgeting, it has been found that the budgeting is a crucial process which
must be applied by each business in order to manage and improve the position of the
business.
Conclusion:
To conclude, the budgeting is a managerial process which makes it easier for the
business to identify the future changes into the business and makes the financial strategies on
the basis of that. In case of T&K, the budgeting process is very much important for the
business to identify the changes and improve the financial performance of the company on
the basis of that.

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References:
De Azevedo, R. C., de Oliveira Lacerda, R. T., Ensslin, L., Jungles, A. E., & Ensslin, S. R.
(2012). Performance measurement to aid decision making in the budgeting process for
apartment-building construction: case study using MCDA-C. Journal of Construction
Engineering and Management, 139(2), 225-235.
Hope, J., & Fraser, R. (2013). the Budget. Budgetierung im Umbruch?, 1 (5), 71.
Shastri, K., & Stout, D. E. (2008). Budgeting: Perspectives from the real world. Management
Accounting Quarterly, 10(1), 18.