Polytechnic Institute Australia: Exhibition Furniture Case Study

This document presents a comprehensive solution to a management accounting case study focused on Exhibition Furniture. The solution includes an analysis of the company's budget, recommendations for continuous improvement, and a business memorandum addressed to the CEO. The memorandum suggests implementing quarterly budgets for better short-term goal management and conducting variance analysis to identify areas for cost reduction and improved financial performance. The analysis covers various aspects of management accounting, providing a detailed understanding of the company's financial situation and potential strategies for enhancement. Desklib offers a platform for students to access similar solved assignments and past papers.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author Note

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Table of Contents
Part 1................................................................................................................................................3
Answer to requirement a..............................................................................................................3
Answer to requirement b.............................................................................................................3
Answer to requirement c..............................................................................................................4
Answer to requirement d.............................................................................................................5
Answer to requirement e..............................................................................................................5
Answer to requirement f..............................................................................................................6
Answer to requirement g.............................................................................................................6
Answer to requirement h.............................................................................................................6
Answer to requirement i..............................................................................................................7
Answer to requirement i..............................................................................................................7
Answer to requirement j..............................................................................................................8
Answer to requirement k.............................................................................................................8
Answer to requirement l..............................................................................................................9
Part 2..............................................................................................................................................10
Business Memorandum.............................................................................................................10
Bibliography..................................................................................................................................12

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Part 1
Answer to requirement a
Answer to requirement b

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Answer to requirement c

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Answer to requirement d
Answer to requirement e

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Answer to requirement f
Answer to requirement g
Answer to requirement h

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Answer to requirement i
Answer to requirement i

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Answer to requirement j
Answer to requirement k

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Answer to requirement l

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Part 2
Business Memorandum
To: Chief Executive Officer of Exhibition Furniture
From: Management Accountant
Date: February 7, 2018
Subject: Business recommendation for continuous improvement into budget schedules
Sir,
The budget that has been prepared for the financial year of 2018 reveals the strategic plan
that is expected to incorporate by the business. The budgeted income statement displays a net
profit of $438,743. However, the preparation of the budget does not guarantee the fact that the
firm will be able to incur the budgeted revenue. Moreover, the preparation of the annual budget
also reflects the projected profit that may be incurred on a long-term basis. Thus, the short-term
goals of the firms have to be focused upon, in order to facilitate the achievement of the long-term
goals of the firms.
Therefore, in order to ensure a continuous improvement structure in regards to the
business operations conducted by the firm, a framework should be established that could be
utilized by the management of the firm in order to achieve the desired outcomes. These
following recommendations are as follows:
 In case of Exhibition Furniture, the budget that has been prepared reviews and estimates
the revenues and other financial components for an annual year. However, if the annual
budget is divided on a quarterly basis, the management of the firm will be able to get an
overview into the particular business processes or financial components that are leading
to the reduction of potential revenue that could be incurred by the firm. Moreover, the
preparation of a quarterly budget will result in the staff of the firm getting a clarified view
of the short-term objectives that are required to be achieved and their individual roles and
responsibilities in regards to such an operation. The quarterly preparation of the budgets
will also facilitate the flexibility of the budget and increase its suitability in regards to a

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specific time-period. Moreover, the management will also be able to experiment more in
terms of new products and management strategies as they will not have to wait for an
entire year for analyzing the results.
 The second recommendation is that the preparation of the variance analysis of the
prepared budgets. The variance between the budgeted figures and the actual figures
indicate the exact areas where the furniture company can improve thus, reducing the cost
of production. A variance analysis essentially reflects the degree of difference between
the estimated gain or expenditure and the actual gain or expenditure that has been
undertaken by the firm during a particular financial year. A favorable variance reflects
the fact that the firm has performed well in terms of the prepared budget. An unfavorable
budget reflects poor financial performance by the firm. The management of the firm
should also consider implementing proper internal controls and innovation of the
products in order to expand the existing customer base.
Thus, these are the two mentioned recommendations that should be followed by the
management of the firm in order to incorporate the continuous improvement of the business
processes of Exhibition Furniture.
Thanking you,
Management Accountant

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Bibliography
Bedford, D. S. (2015). Management control systems across different modes of innovation:
Implications for firm performance. Management Accounting Research, 28, 12-30.
Klychova, G. S., Faskhutdinova, М. S., & Sadrieva, E. R. (2014). Budget efficiency for cost
control purposes in management accounting system. Mediterranean journal of social
sciences, 5(24), 79.