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Management Accounting Case Studies and Answers – Guide for Students

First, let us de-mystify what management accounting actually is.It is the provision of financial and non-financial decision making information to managers. It involves partnering in management decision-making, planning and performance management systems. It also involves financial reporting and control to assist management to form strategies for the company.Management Accounting Case Studies and Answers are here to help.

Management accounting case studies in business sense can affect three main areas, namely:

  • Strategic management
  • Performance Management
  • Risk Management

Management Accounting Case Studies and Answers define Management Accountants as someone who creates value for the company. It differs from financial accounting in a number of ways.

  • The accounting information is strictly confidential and only available with the managers.
  • It stresses on the future of the business.
  • It is model-based
  • It has relation to management information systems.

How free accounting case studies can it help students?

Management Accounting is important for you if you considering a career in business.You can start a career in finance and consultancy as well. Through this course you will learn cost and management accounting of business, recording and classify costs and prepare management information systems.Management Accounting Case Studies and Answers is an important tool in learning.

The Syllabus- Management Accounting Case Studies and Answers

It comprises of the following:

  • Introduction to Management Accounting
  • Budgetary control
  • Standard Costing
  • Variance Analysis
  • Marginal costing
  • Cost-Volume-Profit Analysis
  • Analysis and interpretation of financial statements
  • Ratio Analysis
  • Working Capital Management
  • Fund Flow Statement
  • Cash Flow Statement

Management accounting case studies allow students to understand the basis of accounting.These case studies explain the role of accountants in decision making, planning, and testing and in the creation of sustainability programmes for the company.

There are numerous accounting case studies on the web, which can assist you in the study of management accounting, through case studies. There are various websites on case studies. One such example is that of Leisure Centre, NPV, and sensitivity analysis.

The centre was opened in 1973, as a leisure spot. It had a pool, sports hall, squash courts and changing rooms. Two of the squash courts had been renovated recently. Other courts are in urgent need of renovation. The fitness centre also seems to be a bit small, leading to loss of members who cannot move about freely.

An Employee, who I do not wish to name, is the Management Accountant. It is upon her to evaluate and finalise strategies for the place. The options available are:

  1. The 3rd squash courts can be combined with the fitness centre to increase the size.
  2. Both the 3rd and 4th squash courts can be combined with fitness centre to make a bigger fitness centre.

Now, there are various costs involved. The capital costs involve building works, services, and equipment and professional fees.This is an example of management accounting function in an organisation.

Case Studies for accounting students – As an important mode of education

Case studies are very important for Management students. It makes use of the concepts taught in MBA class. Different business scenarios are presented infront of students, to make them market –ready. Case studies carry a large chunk of marks in examinations and internal assessments. Students are required to pay extra attention to case studies.

Problems students face in completing case studies

  • The subject has both financial and mathematical aspects. These are considered difficult for most students.
  • Lack of concept is a very negative factor.
  • Lack of experience is another factor affecting most students.
  • The other factor is absence of resources.

Problems in writing case studies:

Accounting Case studies can be simplified into the following parts, like introduction, industry introduction, company background, subsidiaries, performance evaluation, growth, decision, questions and conclusion.

  • Management Accounting Case Studies and Answers break it up; Introduction is the most decisive part. Writing it can make or break your case study. You have to write about the owners, registration, incorporation, location and whereabouts of the various branches of the company.
  • Secondly, the industry information is as important. The origin of the industry, start date, reasons for the industry to start is as important.
  • Subsidiary information is as important. It tells us about the various groups under the parent company. The various business units, sister concerns, the various verticals come under the purview of the table.
  • The company’s performance is evaluated over the years. Tabular data, pie charts, pie graphs are important tools for chalking out this data. This information affects the future of the company in a major
  • The vision and strategies of the owners towards the growth of the organisation are noted down in this step.
  • The decision and decision-making process is a very important part of the process.
  • The final part of the case study summarises the entire research.The conclusion will decide the future of the company.

Management Accounting Case Studies and Answers take us through another case study before we venture out to create our own.

It’s the case study on Keller’s Free house. It starts with Consultant introduction, education and experience.  Next comes the company introduction, where we see the Keller brothers aiming at opening a brewpub in Ontario. The plan involves brewing own beer, in-house along with a restaurant.

The objectives of accounting case studies are:

  1. Generation of enough profit to support the salaries of $25,000 each
  2. Providing a proper return on investments.
  3. Achieving Break-even in the first two years of operations.

The problems identified from accounting case studies:

As per Management Accounting Case Studies and Answers,restaurant location is of prime importance. Transit streets with high footfall will be required to profit from the venture. Then the beer quality is also a deciding factor for the business. To avoid losses, small batch production is encouraged, instead of full-blown production falling flat. The focus should be on either a brewpub or a restaurant, before opening both. Serving alcohol is a high liability job.

Management Accounting Case Studies and Answers say proper well-trained staff is required for the same. As per market experiences, 60% of restaurants fail in the first year and 80% in the first five years.The quality of ingredients used is of prime importance. Sampling is extremely important to avoid the misuse of certain products.Developing new mechanisms to cope with completion is extremely important.

The net present value needs to be calculated for the analysis, along with cost-volume-profit analysis, break-even analysis. Then a SWOT Analysis is done to ascertain the various facets of the business. The final outcome is the projected income statement.

This is how the entire process works. Accounting case studies are an important part of any management subject, more so in finance.

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