Strategic Management Accounting Report: Wattle Jet Case Study Analysis

This report presents a strategic management accounting analysis of the Wattle Jet case study. The analysis focuses on the company's AADS-B project, examining its financial performance using earned value analysis. The report calculates cost and schedule variances, highlighting a cost overrun of $14,000 and a delay in project completion. The analysis compares the budgeted costs and schedule with the actual figures, revealing inefficiencies in project management. The report also references the assignment brief, which required an analysis of Wattle Jet's stakeholders, their value, and related strategic objectives. The report offers insights into project performance, including cost and schedule variance. The report also includes a review of the company's strategic planning process, or lack thereof, with a focus on the identification of stakeholders, their value, and strategic objectives.

Running head: STRATEGIC MANAGEMENT ACCOUNTING
Strategic Management Accounting
Name of the Student:
Name of the University:
Author’s Note:

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STRATEGIC MANAGEMENT ACCOUNTING
Table of Contents
Answer to Question 4......................................................................................................................2
Reference.........................................................................................................................................4

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Answer to Question 4
The main purpose of this assessment is to analyze the business of Wattle Jet which has
undertaken a project for the purpose of estimating whether the management of the company is
performing well in the project or not (Verma, Pathak & Dixit, 2014). The business is undertaking
AADS-B project which would bring about growth and development of the business. In order to
estimate whether the performance of the management in respect of this project, earned value
analysis is undertaken by the management of the business (Fleming & Koppelman, 2016). As
per the analysis of the earned value analysis, the computation for the same is given below:
Particulars Amount
Estimated Up-Front Cost $235,000
Additional On-Going training,
testing & implementation cost $75,000
TOTAL BUDGETED COST $310,000
% of Project completion 60%
Earned Value $186,000
Actual Cost incurred $200,000
EARNED VALUE VARIANCE -$14,000
Figure 1: (Table showing Earned Value Analysis)
Source: (Created by the Author)
The earned value analysis of the project that there is a variance in the cost which is
incurred by the business and the variance is shown to be $ 14,000 (Kim, 2014). The total
budgeted cost for the project is estimated to be $ 310,000 and the project is estimated to be 60%
complete, therefore the budgeted cost at this stage should be around $ 186,000. However, the
actual cost which is incurred by the business in the project is shown to be $ 200,000. This shows

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that the cost is well above the budget as shown in the above table and the cost overrun is shown
to be $ 14,000.
Particulars Value
Estimated Completion period (in
months) 16
Actual % of Completion 60%
Expection Periods for Actual % of
Completion 9.6
Actual Period Taken (in months) 12
Project Behind Schedule by (in
months) 2.4
Figure 2: (Table showing Schedule for the Projects)
Source: (Created by the Author)
As per the management estimate, the project is to be completed in a 16 months period.
The completion of the project is done around 60% and therefore, the estimated period for 60% of
the work in budgeted terms is 9.6 months. However, the management has taken a period of 12
months to complete 60% of the project (Colin & Vanhoucke, 2014). Therefore, it can be said that
the management is lagging in terms of time schedule to complete the project.

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Reference
Colin, J., & Vanhoucke, M. (2014). Setting tolerance limits for statistical project control using
earned value management. Omega, 49, 107-122.
Fleming, Q. W., & Koppelman, J. M. (2016, December). Earned value project management.
Project Management Institute.
Kim, B. C. (2014). Dynamic control thresholds for consistent earned value analysis and reliable
early warning. Journal of Management in Engineering, 31(5), 04014077.
Verma, A., Pathak, K. K., & Dixit, R. K. (2014). Earned value analysis of construction project at
Rashtriya Sanskrit Sansthan, Bhopal. International Journal of Innovative Research in
Science, Engineering and Technology, 3(4), 11350-11355.