Business Management with Finance Report: Traditions Limited Analysis

This report analyzes the financial implications of closing a restaurant division within Traditions Limited, revealing potential profit increases and non-financial consequences such as employee morale and career impacts. It examines the role of a management accountant in assessing costs, stock manag...Read More

Running head: BUSINESS MANAGEMENT WITH FINANCE
Business management with finance
Name of the student
Name of the university
Student ID
Author note

1BUSINESS MANAGEMENT WITH FINANCE
Table of Contents
Answer a.....................................................................................................................................2
Answer b....................................................................................................................................3
Answer c.....................................................................................................................................3
Reference....................................................................................................................................5

2BUSINESS MANAGEMENT WITH FINANCE
Answer a
Financial and non-financial consequences of closing the restaurant department
Financial consequences
It is recognized from the statement of overall marginal costing that the overall loss
from the business amounted to £ 8000. Further, the lowest contribution was gained from the
restaurant division and the amount was -£ 33,000. However, eliminating the restaurant
division will convert the loss of £ 8000 to profit of £ 25,000. Therefore, to increase the profit
Traditions Limited can discontinue the restaurant division. However, it is seen that the
company is not spending any amount for advertising of restaurant and therefore the sales of
the restaurant is lowest as among all divisions (Scott 2015). Further, the French cuisines that
seem attractive are sold on such price that does not even cover the cost related to that food.
Therefore, the cost of those foods can be increased which in turn will increase the profits of
restaurant. If the restaurant is closed Traditions Limited will lose the opportunity of
increasing the sales forever. Therefore, instead of closing it the company shall take the steps
to enhance the sales through advertising and increasing the menu price.
Non-financial consequences
It has been identified that Claude has great association with the restaurant. Further,
the prize own by him gave him confidence regarding his career as a chef. If the restaurant is
closed chances are there that he will lose his confidence and may not be able to choose any
other profession. Further, he may not be willing to work any 3rd party’s restaurant as he feel
that it will hamper his creativity (Ajodhia 2014). The reason behind this is that he changes the
menus in the restaurant in weekly basis; however, if he works for someone else he may not
get that must independency there to take these decisions on his own.

3BUSINESS MANAGEMENT WITH FINANCE
Answer b
Management accountant is engaged in the role of accounting for the functions of
internal business and tracks all the internal costs required for decision making. Further, she
must be familiar with the system of cost allocation to each of the services or goods produced
by Traditions Limited. Further, before taking any final decision regarding closing the
restaurant, she shall prepare the cost and profit data as far as possible as there is no proper
system of managing the stock (Hilton and Platt 2013). Therefore, it can be expected that there
is mismanagement of stock. Further, all the record of the restaurant division is maintained
through manual system. Therefore, chances are there that the data are misstated or the data
presented are not showing the true cost and profit structure of restaurant division. Therefore,
the biggest challenge is that she has to gather the cost from the possible sources and then the
cost profit statement has to be prepared. Apart from this, she must find out the reason that led
to loss in the financial statement of the company as the main concern for the company at
present is the loss in the financial statement after having profits for several years of business
(Fullerton, Kennedy and Widener 2013).
Answer c
Factors influencing designing and implementation of the management information system
(MIS)
MIS enables the companies to get right information in right form at right time through
improving the communication among the people of the organization.further, the MIS play
major role in organizational life as it delivers appropriate information as per requirement.
For Traditions Limited the purposes of MIS are as follows –
 Information can be retrieved easily

4BUSINESS MANAGEMENT WITH FINANCE
 It creates appropriate conditions for making effective decision that will be appropriate
for information processing in timely manner
 Evaluation of the company’s activity and evaluate results for correct deviations
 It helps in predicting the future prospects of company with regard to taking the
required precautions in case of defeat in attaining the goal.
 It enables to take the advantages of system through issuance of reports irrespective of
the detailed report or aggregate report (monthly, annually or quarterly) based on the
activities of the company (Romney and Steinbart 2014).
 Responses to enquiries
 Remember historical information and required information as these are the basis of
work.
Further the other factors that lead to application of MIS are as follows –
 Technological factors – in technological aspect MIS helps in improving system
quality, service quality and information quality. System quality and information
quality are considered the jey factors that have an impact on information system
acceptance and the performance of the company. Further, the system quality is the
preferable characteristics of the information system.
 Organizational factors – in organizational aspect 2 variables those are suggested are
end-user training and top management support. Management support is the perceived
level of the general support those are offered by the top management and end-user
training is the amount of training offered by computer specialists of the company.
Both can be well managed by MIS (Drury 2013).

5BUSINESS MANAGEMENT WITH FINANCE
Therefore, MIS will assist Traditions Limited in proper allocation of work
responsibility, management of business data in proper manner and taking proper decisions
based on the available information.

6BUSINESS MANAGEMENT WITH FINANCE
Reference
Ajodhia, W.A., 2014. Master of Business Administration Program In General & Financial
Management.
DRURY, C.M., 2013. Management and cost accounting. Springer.
Fullerton, R.R., Kennedy, F.A. and Widener, S.K., 2013. Management accounting and
control practices in a lean manufacturing environment. Accounting, Organizations and
Society, 38(1), pp.50-71.
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Romney, M.B. and Steinbart, P.J., 2014. Accounting information systems. Pearson Higher Ed.
Scott, W.R., 2015. Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.