Introduction
Unit 5 Accounting Management Assignment Help Online
The management accounting assignment is held accountable for efficiently managing both the organisational finances and operations. They create several policies to control their actions. The budgeting process is used by BRUNEI Co. to manage its liquid assets, which aids in managing its cash flows. The use of several budgeting techniques will be addressed. Variance analysis will be used to construct their performance assessment.
Task 1
A. Explain why organisations use budgeting (LO 1.1; 1.2)
Budgeting: It is the practise of efficiently allocating the resources that are already available to achieve maximum utilisation. Additionally, forecasting for revenue and expenses is included. The budgeting process has a number of advantages that organisations can take use of, including:
Manage cash flows: This aids in accurate forecasting, which helps to determine the amount of money needed and the expense ratio. They balance their cash flows to an appropriate degree using this estimation information.
Making decisions: They use estimation to obtain a useful set of data that is used in the decision-making process. They made decisions about how to use the financial resources at their disposal and made the necessary expenditures using this information.
Setting a benchmark: They established an appropriate benchmark for their department using the findings of the budget. They prevent their poor resource management by adhering to these guidelines (Ya & A, 2012).
Performance evaluation: It is also used to determine how well they are performing. They compare their actual outcomes with their budgeted outcomes in order to make performance evaluations. They assess their performance as they achieve favourable results or unfavourable ones with the use of obtained variances.
Unit 5 Accounting Management Assignment Help Online
Appropriate resource allocation is made possible by the budgeting process, which generates the necessary demand for resources. They arrange and use their resources according to the need in order to achieve the intended results.
Effective communication is made by management using the budget they have prepared in order to process the operations properly. For the purpose of processing and carrying out their duties in an efficient manner, they established useful benchmarks (Anessi-Pessina, et. al., 2016).B. Explain the administrative procedures used in the budgeting process. (LO 1.1; 1.2)
The budgeting process uses administrative procedures that follow a three-step approach. The next three steps are covered, including:
Choose a budget officer: A budget officer is a qualified entity that gives the budgeting process an appropriate amount of authority. He or she may be chosen by preference or from among the people on their budget committee. He serves as a conduit or mediator between the budget committee, management, and employees. They successfully address any challenges or problems brought up in order to alter their budget in a timely manner. He is in charge of effectively communicating with regard to the budget.
A group of authorised individuals engaged in the oversight of the budgeting process is the budget committee. Members from every department are included in the budget, and they are chosen based on their titles and professional backgrounds. They are also known as coordinators. By using variance analysis, they are able to measure organisational performance effectively. If they receive unfavourable results, they investigate the cause. Additionally, they approve budgets before sending them to the management accounting department to create the “Budget Manual” (Anessi-Pessina, et. al., 2016).
Task 4
a) Advise the BRUNEI CO. with supporting figures as to whether to cease production of A and D. (LO 2.4)
Analysis: The management of BRUNEI Co. wants to stop making Products A and D because it believes that doing so will result in a loss. According to the findings of the profit calculation without taking into account A & D, Product B is yielding a loss while Product E is only yielding a small profit. With the inclusion of Products A & D, it is evident that they are not making significant profits, but they are also not losing money. With the aid of their sales, they are easily able to cover their expenses and generate a sufficient level of profits for their company. Now it is recommended that they avoid stopping the production of Products A and D. (Libby & Lindsay, 2010).
Unit 5 Accounting Management Assignment Help Online
Task 5
a) Board of BRUNEI CO. Ltd wants you explain the differences between these budgeting methods and to advise which one will be more appropriate to which type of business (LO 3.1)
For the aim of creating their budget for the current year, the management of BRUNEI Co. uses information or numbers from the prior year. On the basis of necessary adjustments, the trend at the time as well as market developments, they made effective revisions to the budget from the previous year. These modifications demonstrate an increase in their budget, and as a result, the budget is referred to as an incremental budget (Kurunmäki & Miller, 2011).
Zero-based budgeting: The management of BRUNEI Co. creates the budget using new data; no information from the prior year is used. They are not permitted to create their current year budget using data from the previous year. This approach is used by new organisations to create their budgets (Kurunmäki & Miller, 2011).
Fixed: The management of BRUNEI Co. creates a budget report once and follows it for a prolonged period of time. It is unchanged, and organisations tend to become stiff as a result most of the time.
Flexible: The BRUNEI Co. management prepares the budget at the beginning of the year and makes effective changes to it in order to achieve the desired outcomes from it. Utilizing this strategy gives managers and organisations a great level of flexibility and aids in achieving the desired results (Easterday & Eaton, 2012).
Conclusion
It is established that BRUNEI Co. used several budgeting techniques to effectively utilise their available funds. To make the most use of their resources, they classify their costs. They utilise their planned budget in a variety of ways, including performance evaluation, information extraction for decision-making, and many more. They adhere to the budget that has been created in order to carry out the activities methodically and to the intended degree. In order to evaluate their performance and make adjustments to their processing, they conduct variance analysis at the end.
References
Alino, N.U. & Schneider, G.P. 2012, “Conflict reduction in organization design: budgeting and accounting control systems”, Academy of Strategic Management Journal, vol. 11, no. 1, pp. 1.
Anessi-Pessina, E., Barbera, C., Sicilia, M. & Steccolini, I. 2016, “Public sector budgeting: a European review of accounting and public management journals”, Accounting, Auditing & Accountability Journal, vol. 29, no. 3, pp. 491-519.
Brook, D.A. 2012, “Budgeting for national security: a whole of government perspective”, Journal of Public Budgeting, Accounting & Financial Management, vol. 24, no. 1, pp. 32.
Butt, M. 2010, “Variance analysis”, Accounting, Auditing & Accountability Journal, vol. 23, no. 6, pp. 816-816.
Easterday, K.E. & Eaton, T.V. 2012, “Double (accounting) standards: a comparison of public and private sector defined benefit pension plans”, Journal of Public Budgeting, Accounting & Financial Management, vol. 24, no. 2, pp. 278.
