Management Accounting: Case Study of BBQ and Balloons

Running Head: Management Accounting
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Project Report: Management Accounting

Management Accounting
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Contents
Introduction.......................................................................................................................3
Que 1.................................................................................................................................3
Que 2.................................................................................................................................4
Que 3.................................................................................................................................5
Que 4.................................................................................................................................6
Que 5.................................................................................................................................7
Que 6.................................................................................................................................9
References.......................................................................................................................11

Management Accounting
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Introduction:
Management accounting is a type of accounting which is used by the organizations to
manage all the financial data of the business and present it in such a way that organization
and all of its stakeholders could reach over a decision and conclusion about the performance
of the organization. It basically deals with various provisions of accenting to record and
present the accounting information to aware the stakeholders. It takes the concern over all the
accounting nature activities of an organization. It identifies and tracks all the controlling and
performance measures of the business to take proper decision. In other words, it is a set of
financial and non financial decisions which are made in an organization to deal with
information processed by an organization or the managers of the organization.
Here, a case study of 4 friends has been studied to identify the concept of
management accounting and make a proper understanding of those concepts. It involves
income statement to variance analysis study.
Que 1:
Below is the income statement of BBQ and Balloons:
Income Statement
for the year ending
Particulars Units Price Total
Barbecue Sales 2000 $ 2.00 $ 4,000
Balloon Sales 1000 $ 1.00 $ 1,000
Total sales $ 5,000
Cost of stock
Barbecue 2000 $ 0.25 $ 500
Balloon 1000 $ 0.03 $ 30
Gross Profit (Total sales - cost of sales) $ 4,470
Less: Expenses
Remuneration $ 1,600
Leasing BBQ $ 200
Balloon Pump $ 50
Sales and administrative $ 50
Permit expenses $ 250
Total Expenses $ 2,150
Net profit (Gross profit - Total $ 2,320