Analysis of HLW Club's Management Accounting and Finances Report

This report provides a comprehensive analysis of the financial aspects of the HLW Club, focusing on management accounting principles and the impact of new membership plans. The study examines activity-based costing, direct and indirect costs, and revenue generation strategies. It evaluates the benefits of the proposed membership plans, including their effect on cash flow and overall revenue. The report includes calculations and assumptions to assess the financial implications of different scenarios, such as varying court usage during peak and lean seasons. The analysis highlights the importance of considering direct costs in production and the potential advantages of the new membership structure in increasing revenue and optimizing court utilization. Furthermore, the report also discusses the importance of feedback from members and the maintenance of periodic records to track the revenues collected.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student
Name of the University
Authors Note
Course ID

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Table of Contents
Answer to Part A:.......................................................................................................................3
Requirement B:..........................................................................................................................3
Answer to requirement C:..........................................................................................................4
Answer to requirement Part B:...................................................................................................5
Requirement B:..........................................................................................................................6
Requirement C:........................................................................................................................10
Conclusion:..............................................................................................................................10
Reference List:.........................................................................................................................12

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Executive Summary:
The current study is based on the understanding of the benefits associated with the activity
based costing. There are several forms of direct cost, which is obligatory in production, and
the same has not been taken into the considerations in determining the cost of goods
manufactured. The report will provide the new plans of membership that has been proposed
by the HLW is regarded as the vital aspect in determination of the total revenue derived. The
implementation of the new plan, it is regarded as the programs of benefit for HLW at the time
of preparing the adequate amount of cash flow during each month of the accounting year.

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Answer to Part A:
Requirement A:
Requirement B:
Illustrations of the Bill of Activities:

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Answer to requirement C:
The calculations that has been done demonstrates the cost of overhead involved in the
production. The table also provides the details relating to the cost that are indirect relating to
the productions of the lamington in order to distribute the same into the market. A vital
element that is existing in this case study is that there are several amount of direct costs,
which is obligatory in the production procedure, and the same has not been taken into the
considerations in determining the cost of lamington. Direct cost are generally regarded as the
cost that is distributed to the production of goods (Scott 2015). Direct cost forms the
significant constituent of the manufacture course. No products can be manufactured without
taking into the account the direct cost of the goods. The case study provides the evidences

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that direct is regarded as the vital component in the production of lamington therefore these
cost cannot be ignored in the determination of the lamington product. The direct cost should
be included in the production process. Apart from the direct costs, there are other cost that are
also the part of the production procedure.
a. Direct cost of the labour
b. Expenditure related to the charges of freight inward
c. Direct cost associated to the materials
Answer to requirement Part B:
Answer to C:
The evidences that has been obtained from the case study suggest that the HLW has
generated revenue through the help of individual resources, which can be determined on the
basis of the membership fees generated from the court (Schaltegger and Burritt 2017). In
addition to this, the revenue that has been derived is based on the annual membership of
which 40 per cent of the revenue is subtracted from the total sum of amount that is generated
inside two months of the time. Furthermore, the remaining part of the balance is generated
from the court fees that is based on the yearly income.
An important consideration of the fact is that the remaining amount generated from
the court fees is not identical for each year (Warren and Jones 2018). Evident whenever there
is a high peak time for business, the cash flow from the court fees turns out to be higher and it
is estimated that the revenue increases by 45 per cent. Commencing from the months of May
to September the revenue significantly declines by 15%.
The new plans of membership that has been proposed by the HLW is regarded as the vital
aspect in determination of the total revenue derived. Significantly the around 80% of the total
amount of the revenue is generated in the first month of the accounting year. In agreement

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with the new plans, it is anticipated that HLW would be able to obtain numerous benefits and
the same has been listed below;
a. In order to implement the new plans of membership HLW would be in the position of
deriving the benefit of the higher number of cash flow, which could be generated
from the operational sources during the accounting year on the application of the new
plan. Hence, if this is regarded as the current plan then the club would be required to
reliant on the individual programs (Henderson et al. 2015). The programs are based
on the fees based on hour, which would help in obtaining the revenue of 50% of the
amount.
b. On implementing the new plan, it is regarded as the programs of benefit for HLW at
the time of preparing the adequate amount of cash flow during each month of the
accounting year.
c. On the implementation of the new membership plans, HLW would be able to obtain
the benefit of the administration of club and this may enable the club to generated a
higher percentage of revenue i.e. 80%. Such plans would be offering greater amount
of benefit than the six months’ plans (Beatty and Liao 2014). Hence, the advantage
that is generated from the accumulated funds is in respect of the financial decision
forming the part of the development.
Requirement B:
The study presently highlights numerous problems surround the current situation of
HLW. Furthermore, taking account of the issue that has been highlighted assumptions are
undertaken that can reflect the effectiveness of the current plans of the membership based on
the revenue that has been generated (Macve 2015). There are assumptions that are stated
below;

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a. A noteworthy consideration relating to the increasing the revenue is making a full use
of the court on the circumstances when the business hits the highest time.
b. On the arrival of the semi-lean season, it is vital to use around 60% of the court.
c. On the arrival of the lean season a recommendation can be stated which would require
making 40% of court use (Jiang, Wang and Xie 2015).
Sales revenue in present scheme:
The calculations that has been performed portray the impact of the new plans of new
membership plans and effect on the current sales. This can be done by making use of the
systematic method in regard to the above defined assumptions that are as follows;
Annual Membership:
Computation of Total Court Fees

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Computation of total sum of proceeds derived:
Determination of revenue under new membership plan:
The computation that has been done provides that the court would be able to produce sales
revenue in respect of the current plans of the membership which is evidently demonstrated
below;
Computation of sales from previous membership:
Computation of Sales under general membership:
Computation of revenue collected:

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Effect on the revenue and cash flow:
An impact created on the sales and cash flow is depicted with the help of calculation that is
stated below;
In agreement with the calculation that has been done presents that the sales revenue of
the HLW has significantly increased. According to the computation that has been done
presents that the new plan that has been adopted for HLW evidently provides that would be
able to generate sufficient amount of revenue making the optimum utilization of the court
during the season when it is peak and during the season when it hits lean (Reid and
Myddelton 2017). The revenue is in agreement with the current proposed plans of the
membership that has been proposed. In addition to this, the calculation that has been done
shows that in agreement with the current plans of the membership HLW would be in the
position of generating higher amount of sales in respect of the months of October.

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Requirement C:
The assumptions that has been done relating to the sales revenue is associated with the
new plans, which is in respect of the greater amount of profit from the earlier plans (Wild
2015). The main objective of selecting the appropriate element of the new plan is the
generating higher amount of revenue. There are below listed factors that are helpful in
justifying the analysis are as follows;
a. An evidence from the analysis provides that the fees from the membership that is
generated under the new plan would provide the HLW with higher instances of
previous plans. In respect of the assumptions that has been done the new plans would
help in increasing the revenue (Dutta and Patatoukas 2016). Furthermore, there are
some of the students that would not be able to adjust themselves with the new plans
and as a result of this they might not be able to adjust under new fee structure. It is
necessary to obtain the feedback of the members under the new plans of membership.
b. On applying the new plans, the management of the HLW would be able to gain the
benefit of collecting a higher amount of fees (Trotman, Carson and Gibbins 2015).
The management is additionally required to maintain the periodic records in order to
keep track of the revenues collected in the wider manner.
c. In the early months of the application of the plan, the management may face the
situation of losing some of their members however, when the business hits the peak
time the management would be able to gain higher amount of revenue (Waegenaere,
Sansing and Wielhouwer 2015).
Conclusion:
On the conclusive note, the study has been able to contribute to the understanding that
application of the new method of costing would help the managers in generating higher
amount of revenue. The application of the new plans of membership is beneficial for the

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management as this would help them in generating higher amount of revenue and get the
better understanding of the cost that is associated with the new plans. Conclusively the
method of activity based costing is regarded as the best method of determining the cost and
profit associated with the business.