Managerial Accounting: Analysis of On the Beach Manufacturers

MANAGERIAL ACCOUNTING

Contents
Introduction................................................................................................................................3
Overview of expected results (2019).........................................................................................4
Analysis of contribution margin of the products........................................................................7
Analysis of the cash position of the business.............................................................................9
Analysis and predictions for 2020............................................................................................11
Conclusion................................................................................................................................13
Bibliography.............................................................................................................................14

Introduction
The management must prepare budgets and manage the plans efficiently in order to carry out
the production smoothly. We have been provided with the information of “On the beach”
manufacturers. The data provided to us has been used to prepare different kind of budgets.
Budgeting forms a part of the financial planning. This tool of financial planning is considered
to be very important as it helps to achieve the objectives of the company. Budgeting is
considered to be a complex process because it requires lots of estimations on the basis of the
available information (Adelaja, 2015). This assignment discusses about the forecasted result
of the company.

Overview of expected results (2019)
The data which has been provided to us relating to the company has been used to calculate
the expected results for the next year. The management needs to forecast the number of units
it expects to sell in the camping year for the different products in which it deals (Atkinson,
2012).
The graph provided below shows the number of units of different products that are expected
to be sold in 2019:
Jan/19
Feb/19
Mar/19
Apr/19
May/19
Jun/19
Jul/19
Aug/19
Sep/19
Oct/19
Nov/19
Dec/19
Jan/20
Feb/20
0
500
1,000
1,500
2,000
Chart Title
One-piece Board shorts Towels Beach Bags
We can observe with the help of the given graph that the sales will be maximum in the month
of January but it is gradually expected to decline in the following months.
All the function like purchase, production, distribution etc has to be planned according to the
sales that are expected to happen. A company will purchase materials or hire labour based on
the number of units it has to produce (Berry, 2009).
The inventory level is to be maintained at a level of 50% of what is required in the next
month. This has been planned by the management so that they can calculate the number of
units that they should produce in the future periods.