• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

management accounting case study

Extracts from this document...

Introduction

NOZMUL HUSSAIN STUDENT NUMBER: 2489340 PROFESSIONAL ACCA ACCOUNTING COURSE YEAR 1 MANAGEMENT ACCOUNTING 1 SUMMER RESIT COURSEWORK (2005/06) UNIT LEADER: JONATHAN ROOKE Management Accounting Essay Q1: Discuss the management accounting issues that affect the business concerned in relation to the news paper article. (www.butlersinthebuff.co.uk) From reading the article it's quite clear that the business has developed very rapidly over a very few years are on a successful businenss idea but as any business grows in size operations become more complicated, no longer is just having a good idea enough to progress and protect what has been achieved. Good management and skilled labour are necessary to be able to grow. For managers to be able to make good decisions they require up to date financial information which is related to the issue they are examining, this is the role of management accountants to provide relevant financial data to managers. From reading the article entitled: 'Starting Out' 1 and looking at the business's website2 I've got a good understanding of the nature of the business and its history. There was very little financial data provided in the article and website so I am not able to give much direct management accounting advice but I will discuss various management accounting issues that I think the directors of the business should consider for continued success in the future. Firstly, I would like to discuss contribution analysis and how it can help the company directors make decisions for the future. ...read more.

Middle

Moving into events organising and PR for customers seems like a natural business to move into, providing these services will not only generate new profit in their own right but also strengthen the existing business as stronger relations are built with clients. Q2: Discuss the management accounting issues that affect the business concerned in relation to the news paper article. (Cusquena premium beer) From reading the article it seems that the company is doing well and has a lot of potential but it has a major problem that could do it a lot of harm in the future. It is currently operating on very tight margins due to the cost of marketing, and what small gross profit after marketing costs of around 5% being made is being given to charity as their net margins are nil. This poses a major cash flow risk as there is no retained profit being reinvested. If there was a sudden need for cash due to some unforeseeable reason such as if there was a fault with a large batch of bottles and they had to do a product recall this would probably put them out of business unless they raised cash from outside the business as internally the cash just isn't there as they are operating at nil profit. Simply for the company to get into a more comfortable position they need to sell there way out of trouble, if demand increases which it looks like it will due to their investment in marketing and the fact that the major supermarkets have started stocking it. ...read more.

Conclusion

Given the long lead time at 8 weeks required to get a bottle from the brewery to the customer, it is essential that effective production and sales budgets are produced, to make sure that enough is in stock to fulfil demand as well as reduce possible over ordering considering the extra cost of storage and logistics of unneeded stock and especially given the existing cash flow constraints. Given that contribution analysis, sales and production budgets are being used it is necessary to do variance analysis to find out the state of affairs by finding how much budgeted and true figures at the end of the financial year compare. This information will help them to plan in the future as they will have a better idea of what types of variance will occur in different parts of the business and be able to make educated predictions on how much the variance will be or within what expected range. This information will help them to make better budgets in the future as they have a better idea of what to expect. As a final advice on a non-accounting issue I think they should really push the message that this beer is; 'the only beer that doesn't cause a hangover' as strongly as the charitable aspect and the history of the beers origins in the marketing campaign, as I'm sure that will be a strong advertising point to the British public who are known for their heavy drinking compared to other European countries. Although I myself am a Muslim and do not drink yet this marketing opportunity seems obvious to me. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. Apple Incorporation - Case Analysis

    Apple to license its products and make the Microsoft platform an industry standard. Apple had established itself as a player in the corporate world with entry into the desktop publishing world, with the Mac Plus and Laser Writer printers. Competition in the late 1980s from the Microsoft Windows operating system

  2. Conseco Inc. Case Analysis

    The skilled and educated workforce within the cash management group not only were a precious commodity, but were a hard working cohesive team willing to go beyond just their normal workload to contribute to the success of the Web-Based system.

  1. Amazon Case Analysis

    In order for Amazon to capitalize on its potential it needs to develop an effective differentiating enterprise strategy that will keep it profitable in the future. Amazon faces a tremendous amount of competition in the online retail industry. Competitors such as eBay, Yahoo, and Buy.com are doing everything possible to take market share away from Amazon.

  2. Case Study: World Wrestling Federation

    The relationship between them was another factor ease Hart choose to stay. However, 20-year contract seemed to be too long to for a 40 year old wrestler, especially while the result of the competition was remain unclear. 2.4 Released Bret to the WCW.

  1. Federal Express case study.

    Other barrier is the capital expenditures to start an express transportation company are large, and the companies currently are achieving economies of scale by going global. Any smaller company will not be able to achieve these right away, not allowing them to compete on prices.

  2. The Entourage System: A Feasibility Study

    * Helps in the organization of the searches and the results from the searches, for easy retrieval for later use Search criteria In order to facilitate the use of the search facility efficiently by the users the criteria listed below were gathered during the investigation but they are not exhaustive

  1. In this coursework I need to produce a detailed business report on one medium-sized ...

    Some information is sensitive - and if it becomes known to people other than the intended recipients, it could create either internal or external problems. Information and communication technology Both internal and external channels of communication are increasingly supported by information technology, with computers generating and managing information flows.

  2. E-commerce case study - Online Music Bussiness.

    Most of the purchases will be done online, so telephone operators may have to go. E-commerce enables small business to reach the global market and staffs needs to deal with both the local and international customers as well (Andam, 2003).

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work