Importance of Management Accounting in Amana Ltd.

Management
Accounting

Table of Contents
Introduction-................................................................................................................................................3
Task 1-.........................................................................................................................................................3
Task 2-.........................................................................................................................................................5
Conclusion-.................................................................................................................................................6
References-..................................................................................................................................................8

Introduction-
In this report, Importance of management accounting is discussed. It plays pivotal role in
organization. It helps management in decision making. Planning can be done properly so that
losses can be eliminated. It also helps in evaluation and performance monitoring of the company.
This report analyzes Amana ltd. It is a tourist business and located at England. This company is
famous for selling souvenir. Company has been doing well for 40 years and successfully
understood the dynamic nature of tourist sport. But recently, due to Covid-19 pandemic
government imposed restriction on movement and travel. This put impact on company’s revenue
and profit. So, detailed discussion about company is done in report.
Task 1-
(a) Cost report-
Particulars Cost
per
unit
Original Flexed Actual Variances
Units 1,00,000 20000 80,000
Selling price 25 2,000,000
Revenues 2,000,000
Variable costs:
Materials 2.50 2,50,000 3000 2,80,000 (30000)
Labor 4 4,00,000 40000 4,40,000 (40000)
Overhead 1.50 1,50,000 30000 1,20,000 30000
Contribution 17 17,00,000 5400000 11,60,000 540000
Fixed cost
Warehouse rental 200000 2,00,000 30000 1,70,000 30,000
Insurance 100000 100,000 Nil 100,000
Fulltime warehouse
supervisory salary
50,000 50,000 15000 35,000 15,000
Profit -70000