Financial Analysis: Management Accounting Report for Jeffrey and Son's

This report provides a comprehensive analysis of management accounting principles applied to a case study of Jeffrey and Son's, a company that manufactures the Exquisite brand products. The report begins with an introduction to management accounting and its importance, followed by ...Read More

Management Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Different types of cost classification......................................................................................3
1.2 Calculating unit cost and total job cost..................................................................................4
1.3 Calculating cost of Exquisite using absorption costing technique ........................................4
1.4 Analyzing cost of Exquisite...................................................................................................8
TASK 2 ...........................................................................................................................................8
2.1 Preparing and analyzing cost report for the month of September ........................................8
2.2 Using performance indicators to identify areas for potential improvement........................10
2.3 Ways to reduce cost and enhance value, quality..................................................................10
TASK 3 .........................................................................................................................................11
3.1 Purpose and nature of budgeting process.............................................................................11
3.2 Selecting appropriate budgeting methods for organization.................................................11
3.3 Preparation of different types of budget..............................................................................12
3.4 Preparation of cash budget ..................................................................................................13
TASK 4 .........................................................................................................................................17
4.1 Calculation of variance .......................................................................................................17
4.2 Preparation of reconciliation operating statement .............................................................18
4.3 Findings to management in accordance with identified responsibility centers...................19
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
2

Index of Tables
Table 1: Unit and total job cost........................................................................................................5
Table 2: Cost of Exquisite................................................................................................................5
Table 3: Allocation of cost of support departments on the basis of machine hours........................8
Table 4: Allocation of criteria of cost..............................................................................................8
Table 5: Units to be produced..........................................................................................................8
Table 6: Overhead absorption rate ..................................................................................................8
Table 7: Exquisite calculation..........................................................................................................9
Table 8: Calculation of absorption rate on the basis of labor hours................................................9
Table 9: Calculation of Exquisite....................................................................................................9
Table 10: Cost report for the month of September........................................................................10
Table 11: Calculation of standard budget at 1900 units................................................................10
Table 12: Production budget .........................................................................................................13
Table 13: Material purchase budget...............................................................................................14
Table 14: Material purchase budget of Jeffrey and Son's s make..................................................14
Table 15: Cash budget of Jeffrey and Son's s................................................................................14
Table 16: Computation of amount receivable from debtors..........................................................15
Table 17: Computation of amount of overhead payment..............................................................15
Table 18: Computation of production cost ...................................................................................15
Table 19: Sales budget..................................................................................................................15
Table 20: Cash budget of Jeffrey and Son's...................................................................................15
3

INTRODUCTION
Management accounting is the imperative aspect for any organization as it determine
organization long run growth and success. It enables management to allocate financial resources
for all business activities effectively so as to achieve long as well as short term objectives.
Present report is based on case study of Jeffrey and Son's which manufactures popular brand
products as Exquisite. The cited organization want to reduce operating cost due to competitive
nature of environment. In this regard cost of products and services has been calculated by taking
into account margin of profit. Furthermore, absorption of costing techniques have been
explained. In addition to this, appropriate budgeting methods are also described.
TASK 1
1.1 Different types of cost classification
Cost are classified in different aspect and these are explained as follows- Element-It is the most important factor in allocating cost of products and services. Here,
cost is classified into direct and indirect which are related to production activities or other
related. Further, direct cost consists of lighting, heating and material. On the other hand,
examples of indirect cost are not directly related to production. It includes administrative
expenses and salaries of higher staff etc (Cohen and Kaimenaki, 2011). Function- There are several functions performed in Jeffrey and Son's such as
production, finance, sales and marketing. It facilitates to carry out business activities in
an effectual manner. It helps to select pricing strategy effectively and increase overall
flow of production in the marketplace (Jones and Clatworthy, 2006). Nature-According to nature cost is divided into three parts such as labour, overhead
expense and material. It assists corporation to differentiate all the functions effectively
and accordingly allocate cost for each department (Kate-Riin Kont, 2012).
 Behavior-According to behavior cost is mainly divided into three parts such fixed, semi
fixed and variables (Mock, Coram and Monroe, 2011). Here, variable cost includes labor
and material whereas example of semi fixed cost is telephone bill which remain constant
to a particular level.
4

1.2 Calculating unit cost and total job cost
The unit cost of product has been calculated as follows along with total job cost.
Table 1: Unit and total job cost
Particulars Amount
Direct cost
Direct material £200
Direct labour £270
Indirect cost
Variable production overhead £180
Fixed production overhead £120
Cost per unit £770
Units to be produced £200
Total cost 770*200 £154000
Working note: 1
Fixed production overhead = (Budgeted overhead / total direct labor hours) * Direct labor
hours used in Job 444
=(£80000 / 20000 hours) * 30 hours
=£120
After doing the above calculations it can be said that per unit cost of job 444 is £3.85 and
total cost of this job will be £770.
1.3 Calculating cost of Exquisite using absorption costing technique
Table 2: Cost of Exquisite
Production
Departments
Service Department
Basis of
Apportioning
Total Machine
Shop X
Machine
Shop Y
Assembly Stores Mainte
nance
000’s
Indirect
Wages
Allocated 362 100000 99500 92500 10000 60000
Indirect
Materials
Area
occupied
253 100000 100000 40000 4000 9000
5

Lighting
Heating
& Area
Occupied
50 10000 5000 15000 15000 5000
Rent Area
Occupied
100 20000 10000 30000 30000 10000
Insurance &
Machinery
Book value
of Machinery
15 7947 4967 993 497 596
Depreciation
of Machinery
Book value
of Machinery
150 79470 49669 9934 4967 5960
Insurance of
Building
Area
Occupied
25 5000 2500 7500
7500
2500
Salaries
Works
of No.
employees
of 80 24000 16000 24000 8000 8000
Sub Totals 1035 346417 287636 219927 79964 101056
Re-
of service
dept. cost
Stores Dept. 39982 29987 9995 (79964)
Maintenance 48507 32338 20211 (101056
Totals 434906 349961 250133 0 0
Working Note
Lighting & Heating: Machinery X 10/50 x £50000 — f10000
Machinery Y 5/50 x £50000 — £5000
Assembly 15/50 x £50000 — f 15000
Stores 15/50 x £50000 = £15000
Maintenance 5/50 x £50000 = £15000
Rent Machinery X 10/50 x £100000 = f20000
Machinery Y 5/50 x £100000 = £10000
Assembly 15/50 x £100000 = £30000 Stores
6

15/50 x £100000= £30000 Maintenance 5/50
x £100000 = £10000
Insurance & Machinery Machinery X 800/1510 x £15000 = £7964
Machinery Y 500/1510 x £15000 — £4966
Assembly 100/1510 x 15000 — £994 Stores
50/1510 x £15000= f 497
Maintenance 5/1510 x £15000= £596
Depreciation of Machinery Machinery X 800/1510 x £150000 = £79470
Machinery Y 500/1510 x £150000 = £49669
Assembly 100/1510 x £150000 = £9934
Stores 50/1510 x £150000 = £497
Maintenance 60/1510 x £150000 = £596
Insurance of Buildings Machinery X 15/50 x £25000 — £5000
Machinery Y 5/50 x £25000 = £2500
Assembly 15/50 x £25000 = f7500 Stores
15/50 x £25000 — £7500
Maintenance 5/50 x £25000 = £2500
Salaries of works mgmt. Machinery X 3/10 x £80000 = £24000
Machinery Y 2/10 x :E80000 = £16000
Assembly 3/10 x £80000 = £24000
Stores 1/10 x £80000 — £8000
Maintenance 1/10 x £80000 = £8000
Reappointing workings: based on material issues
Machinery X 400/800* £79964 = £39982
Machinery Y 300/800 * £79964 = £29987
Assembly 100/800 * £79964 = £99995
Based on time spent
Machinery x 12/25 * £101056 = £48507
7

Machinery y 8/25 * £101056 = £32338
Assembly 5/25 * £101056 = £20211
Overhead absorption rate workings
Departments = Total / actual machine hours per department
Machinery X = £ 434906/ 80000 = £5.44
Machinery Y = £349960/ 60000 = £5.83
Assembly = £250134/ 10000 = £25.01
Overhead absorption rate
Machinery X= 434906/80000=5.44
Machinery Y= 349960/60000= 5.83
Assembly=250134/10000=25.01
Table 3: Allocation of cost of support departments on the basis of machine hours
Machine shop X Machine shop Y Assembly Total
Store £39982.00 £29987.00 £9995.00 £79964.00
Maintenance £45807.00 £32338.00 £20211.75 £101056.00
Total £434906.00 £349961.00 £250133.00
Table 4: Allocation of criteria of cost
Particulars Description
Indirect wages and supervision As per the provided amount.
Indirect materials As per the provided amount.
Light and heating On the basis of area occupied
Rent On the basis of area occupied
Insurance and machinery On the basis of book value of machine
Depreciation of machinery On the basis of book value of machine
Insurance of building On the basis of area occupied
Salaries of works management On the basis of number of employees.
Table 5: Units to be produced
Material cost £400000.00 £300000.00 £100000.00
per unit material 8 8 8
A/B no. of units 50000 37500 12500
Table 6: Overhead absorption rate
Machinery X 434906/80000=5.44
8

Machinery Y 349960/60000= 5.83
Assembly 250134/10000=25.01
Computation of absorption rate
Table 7: Exquisite calculation
£ £
Materials 8
Labour 15
Overheads
X (0.8*5.44) 4.34
Y (.6*5.83) 3.5
Assembly (.1*25.01) 2.5
Total cost 33.35
1.4 Analyzing cost of Exquisite
Table 8: Calculation of absorption rate on the basis of labor hours
Machinery X 434908/200000= 2.17
Machinery Y 349960/150000= 2.33
Assembly 250134/20000= 2.15
Table 9: Calculation of Exquisite
£ £
Materials 8
Labour 15
Overheads
X (2*2.17) 4.34
9

Y (1.5*2.33) 3.5
Assembly (1*1.25) 1.25
Total cost 32.09
According to the above calculation it can be said that majority of changes are there in per
unit absorption rate. Here, labor hour absorption is the one of the effective way to calculate total
cost of product or services produced by Jeffery and Son's (Needles and Crosson, 2008).
TASK 2
2.1 Preparing and analyzing cost report for the month of September
Table 10: Cost report for the month of September
Budgeted cost Actual cost Variances
Particulars
Units 2000 units 1900 units
Material cost 24000 22800 -1200
Labor cost 18000 19000 1000
Fixed overhead 15000 15000 -
Prime cost 57000 56800 -
Electricity
Fixed portion 500 500 -
Variable portion 7500 7125 375
Maintenance 5000 5000 -
Total production cost 70000 69425
Table 11: Calculation of standard budget at 1900 units
Budgeted cost Budgeted cost
Particulars
Units 2000 units 1900 units
Material cost 24000 22800
Labor cost 18000 17100
Fixed overhead 15000 15000
Prime cost 57000 54900
Electricity
Fixed portion 500 500
Variable portion 7500 7125
Maintenance 5000 5000
10

Total production cost 70000 67525
Calculation of variable cost – electricity = change in total cost / change in no of units to be
produced
= (8000-5000) /(2000-1200)
= £3.75
It can be said that associated maintenance cost will not be changed. The reason behind
the same is such cost occurs on slot of 500 and in turn if there is decrease by 100 units then it
will not bring any change in cost.
Variance analysis of budget Material cost-The material cost changes very frequently because it changes with volume
of production. The budget is showing that budgeted material was 24000 but actual was
22800. It depicts that because of material there will be no any impact on cost. Labour cost-According to the budget it has been found that actual cost of labour is
greater than from budgeted. Owing to this, cost scenario has been changed to a great
extent (Theeke and Mitchell, 2008). Fixed overhead-Fixed overhead shown in the budget has no difference and it remain
constant in both budgeted and actual cost. It can be said that there was exact forecasting
in the fixed overhead. Electricity-According to the review of budget it can be noticed that changes depicted in
electrical budget is favourable. Furthermore, fixed portion of electricity was constant but
variable portion changes of actual electricity budget is lower (Vance, 2002).
 Maintenance-Under this maintenance cost has not any kind of changes on profit and loss.
It assists corporation to increase flow of production and profitability. Furthermore
decrease of 100 units has not any impact on the cost scenario.
2.2 Using performance indicators to identify areas for potential improvement
There are number of performance indicators by which Jeffrey and Son's can take right
action. It enables management to recognize the areas of improvement and accordingly take
action for the same- Increased customer base-It is one of the most effective performance indicator under
which if there is increased base of customer then it depicts that company has good
11

performance. On the other hand, in case of decreasing base of buyers show downward
trend of corporation (Vanderbeck, 2012). High profitability-This is another effective method and decrease or increase in the same
depicts organization growth and success in the marketplace.
 High market share-This shows that how well an organization is performing. For example
in case Jeffrey and Son's has low market share which depicts that company is not
performing good and its needs some improvement. Accordingly corrective actions are
taken (Weygandt and et. al., 2009).
2.3 Ways to reduce cost and enhance value, quality
There are several ways to reduce cost and enables value as well as quality of products and
services offered by company. It enables management to increase flow of production and cover
cost of the same by increasing profit margin (Young, 2008). On the other hand total quality
management is the most effective method under which quality of product is assessed in proper
manner. This aid to increase buyers and accordingly rate of return will also be increased.
Furthermore, training should be provided to personnel so as to reduce waste material and use
them in the production process. This will determine long run success of company in the
marketplace with increased rate of return (Elmassri and Harris, 2011).
TASK 3
3.1 Purpose and nature of budgeting process
The budget is most important process which facilitates to give certainty for future
business activities. It enables corporation to deliver good quality of services to large number of
buyers and maintaining flow of production in an effectual manner (Nyamori, 2009). Further,
budget process helps to control expenses and achieve the set objectives of company.
Nature of budgeting process
The budgeting process is most imperative aspect under which management need to
consider requirement of business as well as mission and vision of the same. In this regard all
experienced workforce are included in the team and they make collective decision in order to
achieve organizational objectives (Schoute and Wiersma, 2011). Furthermore, overall budgeting
process is based on uncertainty wherein company find that what the potential barriers which can
12

hampered performance. Similarly, budget is revised or reviewed on time to time so as to
eliminate the effect of negative factors.
3.2 Selecting appropriate budgeting methods for organization
There are various budgeting method used y organization in accordance with their basic
requirement. According to need of Jeffery and Son's following three kinds of budgets are
explained- Operational budget-operational budget basically include different activities like
marketing, production, selling and advertisement. Similarly, by taking into account these
strategies, monthly budgets are prepared by which business strategies could be taken by
Jeffrey and Son's (Sulaiman and et.al., 2005). Zero base budgeting-This is another most effective budget under which corporation do
not consider past results and fresh budgets are prepared. It assists company to achieve
organization objectives in right manner (Chapman, Hopwood and Shields, 2011).
 Incremental budgeting-Under this budget company takes into account past factors so as
to improve performance of current year. The overall guidelines in the incremental budget
is based on budget of previous year (Callahan, Stetz and Brooks, 2011).
3.3 Preparation of different types of budget
The budgets are prepared in accordance with requirement of business which in turn
corporation can come to know its actual position in the marketplace.
Table 12: Production budget
Particulars July August September October
Sales 105000 90000 105000 110000
Less: opening stock 11000 13500 15750 16500
Add: Opening
stock 13500 15750 16500
15000
Units to be
produced 107500 92250 105750
108500
Closing Stock:
July = 15% * August sales = 15%*90000 = 13500
August = 15% * Sept. sales = 15%*105000 = 15750
September = 15% * Oct. sales = 15%*110000 = 16500
13

October = 15%*Nov. sales = 15%*100000 = 15000
Table 13: Material purchase budget
July August September October
Material usage 215000 184500 211500 217000
Less: Opening stock 52000 46125 52875
Add: Closing stock 46125 52875 54250
Purchases 209125 191250 212875
July opening stock = 52000 kg and closing = 25%* 184500 = 46125
Table 14: Material purchase budget of Jeffrey and Son's s make
Particulars July August September
Units to be produced 107500 92250 104250
Material cost £3.50 £3.50 £3.50
Material to be purchased £376250.00 £322875.00 £364875.00
Add: cost of material in ending inventory £80718.75 £91218.75 £91218.75
Total cost of material needed £456968.75 £414093.75 £456093.75
Less: Cost of material in beginning
inventory -£166400.00 -£80718.75 -£166400.00
Cost of material to be purchased £290568.75 £333375.00 £289693.75
Material usage budget
July material usage= 107500 units * 2 kg = 215000 kg
August material usage= 92250 units * 2 kg = 184500 kg
September material usage= 105570 units * 2 kg= 211500 kg
October material usage= 108500 units * 2 kg = 217000 kg
3.4 Preparation of cash budget
Table 15: Cash budget of Jeffrey and Son's s
Particulars July August September
Opening balance of
cash £16000.00 £204431.25 £192306.25
Received from debtors £333000.00 £335250.00 £330750.00
Cash sales £567000.00 £486000.00 £567000.00
Total receivable £916000.00 £1025681.25 £1090056.25
Expenses
Payment to creditors £290568.75 £333375.00 £289693.75
Direct wages £300000.00 £300000.00 £300000.00
Variable overhead £46000.00 £100000.00 £100000.00
Fixed overhead £75000.00 £100000.00 £100000.00
Total payable £711568.75 £833375.00 £789693.75
Closing balance of cash £204431.25 £192306.25 £300362.50
14

Working notes
Table 16: Computation of amount receivable from debtors
July August September
Amount received for sales before a month 247500 236250 236250
Amount received for sales before two months 85500 99000 94500
Sum 333000 335250 330750
Table 17: Computation of amount of overhead payment
Overhead payment July August September
Variable overhead 46000 100000 100000
Fixed overhead 75000 100000 100000
Table 18: Computation of production cost
July August September
Material cost £3.50 £3.50 £3.50
Wages £3.00 £3.00 £3.00
Variable overhead £1.00 £1.00 £1.00
Total variable cost £7.50 £7.50 £7.50
Fixed overhead £100000.00 £100000.00 £100000.00
Units to be produced 107500 92250 104250
Total variable cost £806250.00 £691875.00 £781875.00
Total production cost £906250.00 £791875.00 £881875.00
Table 19: Sales budget
July August September
Units to be sold 105000
Key
Performanc
e Indicators.
201490000 105000
Sale price 9 9 9
Sales 945000 810000 945000
15

Table 20: Cash budget of Jeffrey and Son's
Particulars July (£) August (£) September
(£)
Cash inflow
Sales receipts
(w.n.1)
900000 731250 864000
Cash outflow
Purchase 365969 334688 372531
Labour (w.n.2) 322500 276750 317250
Variable O/H
(w.n.3)
108500 98350 100350
Fixed O/H 75000 87500 87500
Net cash flow 28031 -66038 -13631
Opening balance 16000 44031 22007
Closing balance 44031 -22007 -35638
Working notes
Working Note-1
Sales (£) July (£) August (£) Septemb
er (£)
May 855000 85500
June 990000 247500 99000
July 945000 567000 236250 94500
August 810000 486000 202500
September 945000 567000
July: 105000*9 = 945000
August: 90000*9 = 810000
September = 105000*9 = 945000
July receipts August receipts September receipts
10%*855000 May 10%*990000 June 10%*945000 July
25%*990000 June 25%*945000 July 25%*810000 Aug.
60%*945000 July 60%*810000 Aug. 60%*945000 Sept.
16

Working Note-2
Labour
July 1075000*3 = 32250Key Performance Indicators.
20140
August 92250*3 = 276750
September 105750*3 = 317250
Working Note-3
Variable overhead
July August September
June £44000
July £64500 £43000
August £55350 £36900
September £63450
Total £108500 £98350 £100350
Based on Junes Sales = 40% * 110000 and it should be based on production of June and the
difference is in immaterial.
40%*110000 units = 44000*1 = £44000 from June and payable in July
60%*107500 units = 64500*1 = £64500 from July and payable in July
40%*107500 units = 43000*1 = £43000 from June and payable in Aug.
60%*92250 units = 55350*1 = £55350 from June and payable in Aug.
40%*92250 units = 36900*1 = £36900 from July and payable in Sept.
60%*105750 units = 55350*1 = £63450 from June payable in Sept.
(d) Budgeted profit and loss account
July August September Total
Sales £945000 £810000 £945000 £2700000
Less: bad
debts
£47250 £40500 £47250 £135000
17

£897750 £769500 £879750 £2565000
Total MC of
production
£806250 £691875 £793125 £2291250
Add:
opening
stock
£82500
Less: closing
stock
£123750
Cost of sales £2250000
Contributio
n
£315000
Fixed
overheads
£300000
Profits £15000
July August September Total
Materia
l
£376250 £322875 £370125 £1060500
Direct
labour
£322500 £276750 £317250 £916500
Variabl
e O/H
£107500 £92250 £105750 £305500
Total
MC of
produc
tion
£806250 £691875 £943125 £2582500
18

TASK 4
4.1 Calculation of variance
The variance of given case study has been prepared as follows and working note for the
same has been explained in an effectual manner.
1. Sales variances
Sales volume variance (4160- 3040) = (1120) (A)
Sales prices variance (14000- 13820) = (180) (A)
(Budgeted: 35000*£4- Actual sales)
2. The material prices variances
AQ (1425Kg) X AR (£2.40) = £3420
The material prices variances 0(A)
AQ (1425Kg) X SR (£2.40) = £3420
The material usage variance 60(A)
SQ (3500 Units x 0.4) X SR (£2.40) = £3420
3. The labor variances
AH(345Hrs) X AR (£7.8 ) =£2690
The labor variance rate 70 (F)
AH(345Hrs) X SR (£8.0 ) =£2760
the labour efficiency variance
SH (3500 Units x0.1)350hrs X SR (£2.40) = £2800
4. Fixed overhead sending
Actual fixed overheard = £4900
The fixed overhead expenditure variances 100(A)
Budgeted fixed production overhead = £4800
Budget
Original Flexed Actual
Output (Production and
sales units )
4000 3500 3500
Sales revenue £16000 14000 13820
19

Raw materials -(3840) (3360) (1400)Kg (3420)
(1425Kg)
Labour -3200 (2800)(350Hrs) (2690)
(345Hrs)
Fixed overheads -4800 -4800 -4900
Operating profit £4160 £3040 £2810
As per the above budget it can be said that there is difference between actual and
expected budget of Jeffrey and Son’s. It can be said that sales budget was 14000 but the actual is
13820. Further, it was also expected that consumption of material will be 3360 but the actual
expenses for the same is 3420. It service has the positive variance where corporation is having
profit. Furthermore fixed overheads were expected to be 4800 but in real it was 4900. Again it
can be said that there is difference between budged and actual figures (Debarshi, 2011).
Owing to this, it can be recommended to Jeffrey and Son’s that forecasting should be
done in proper manner. In fact several external factors which affect performance of corporation
can also be considered at the time of estimating future profit and loss. Similarly, company can
use updated technologies and tools in order to enhance efficiency and productivity in the
marketplace (Macintosh and Quattrone, 2010).
4.2 Preparation of reconciliation operating statement
Reconciliation operation statement has been shown as follows. It depicts that corporation
get detail information related to loss which has been occurred and other related information
through which proper improvement can be taken at workplace.
Particulars Amount
Budgeted profit £3040
Less: Variance of sales -£180
Less: Variance of cost -£60
Add: Labor £110
Less: Overhead -£100
Actual profit £2810
Operating statement for May
20

Favorable Adverse
Sales volume variance £1120
Sales price variance £180
Material price variance 0
Material usage variance £60
Labor rate variance £70
Labor efficiency variance £40
Fixed overhead expenditure
variance
£100
Total variance £110 F £1460A
Total net variance -£1350
Budgeted operating profit £4160
Less: Net variance -£1350
Actual operating profit £2810
The above mentioned operating statement is showing that actual profit of Jeffrey and
Son’s is going down. The reason behind the same scenario is low price quoted for per unit and
high additional expenses on the same. However, labour variance is favourable which in turn
overall flow of production will be increased.
4.3 Findings to management in accordance with identified responsibility centers
As per the detail analysis of different statement it can be said that Jeffrey and Son’s need
to bring improvement in the work scenario. In this regards responsibility centers like production,
sales, marketing and finance need to be integrated. These are explained as follows- Human resources department- This is most important department of Jeffrey and Son’s
wherein management should put efforts to enhance efficiency. It enables corporation to
increase overall flow of production and deliver good quality of services to large number
of buyers (Cohen and Kaimenaki, 2011). Production department-Production department is also the most important part of
corporation wherein management need to focus on recycling of waste material so as to
reduce additional cost and increase profitability (Jones and Clatworthy, 2006).
21

 Finance department-This is one of the most imperative department under which
allocation of financial resources need to be done with great care. It assists corporation to
quote price effective and also set profit margin in right manner (Kont, 2012).
CONCLUSION
The aforementioned report concludes that management accounting makes it possible for
corporation to reduce additional expenses and have proper control over flow of cash. This in turn
corporation can effectively manage all activities related to production and other related
department which in turn long as well as short term objectives of the same can be achieved. It
can also be said that, performance indicator like profitability, liquidity and increased customer
base aid to bring improvement at workplace.
22

REFERENCES
Journals and books
Callahan, K. R., Stetz, G. S. and Brooks, L. M., 2011. Project Management Accounting:
Budgeting, Tracking, and Reporting Costs and Profitability. John Wiley & Sons.
Chapman, C. S., Hopwood, A. G. and Shields, M. D., 2011. Handbook of Management
Accounting Research. Elsevier.
Cohen, S. and Kaimenaki, E., 2011. Cost accounting systems structure and information quality
properties: an empirical analysis. Journal of Applied Accounting Research. 12(1). pp.5 –
25.
Debarshi, B., 2011. Management Accounting. Pearson Education India.
Elmassri, M. and Harris, E., 2011. Rethinking budgetary slack as budget risk management.
Journal of Applied Accounting Research. 12 (3). pp.278 – 293.
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