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Introduction

Management accounting is a process of recording, monitoring, controlling and analysing information of business performance and operations. The recorded data is presented in front of internal stakeholders of the company to in order to gain their trust and to represent that organisation is performing well or not (Bourne, and et. al., 2014). There are two major elements of management accounting that are implemented in business to analyse the actual position. These elements are budgeting and cost volume analysis. Both of them are essential for a company to analyse its actual performance. In this project report examination of organisation's performance has been evaluated with the help of budgeting techniques and cost volume analysis.

TASK 1

1. Spread sheet to analyse organisational performance

Particular

Amount

Total BEP In units

3.91

Total margin of safety

16.09

Total profits

11433

Net profit

9466

Closing cash balance at the end of 6th month

76803

Required bank loan

15000

Estimated sales

15600

From the above table it can be analysed that organisation can get a success in the market as estimated sales for each month is 15600, profits are 11433 and closing profits are 76803 which is estimation based of estimated information and figures.

TASK 2

1. Calculation of BEP, margin of safety and budgeted net income

Calculation of BEP:

Particular

High end gamer PC (2 units)£

Professional work PC (6 units)£

Mid range home PC (12units)£

Fixed cost

1042.5

1042.5

1042.5

Contribution per unit

1442

946

500

BEP In units

0.72

1.10

2.09

Calculation of margin of safety:

Particular

High end gamer PC (2 units)£

Professional work PC (6 units)£

Mid range home PC (12)£

Actual sales

2

6

12

BEP In units

0.72

1.1

2.09

Margin of safety

1.28

4.9

9.91

Budget net income at the targeted level of sales:

Particular

High end gamer PC (2 units)£

Professional work PC (6 units)£

Mid range home PC (12)£

Sales

3000

6000

6600

Less: Variable cost

-116

-324

-600

Contribution

2884

5676

6000

Less:


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