Company Management

Assignment Title: Coursework 2 – Individual report
Submission Date and Time:
Expected Return of Feedback and Marked Work: 14 days from submission
Assignment Weighting: 50%
Word Count: 2,000  
Learning Outcomes Assessed by this Assignment: MLO3. Analyse and evaluate the role of budgeting, management control and the conflicting implications of budgeting decisions. MLO4. Analyse management accounting information in a business context MLO5. Identify and apply appropriate accounting, financial and management accounting decision-making models and techniques in the context of business.
Assignment Detail:   JLK limited is a UK subsidiary of the Australian MMC Group. The company has been operating in the UK for the past 9 years. JLK provides specialised lighting systems that are supplied to both the household and industrial units in the UK and Australia. For the past 9 years, JLK has been a profit- making firm as it has retained its previous clients, in addition to capturing an increasing share of the market. However, the finance director of JLK has recently got in touch with your professional management accounting consulting firm and has engaged your firm with the mandate to provide them with an explanation of the problem that JLK Limited had been facing. The company is also dependent on the parent based in Australia for funds, as and when required. The company is planning to expand and launch a new product – Security Light (SL) – with a selling price of £720 per unit. JLK Limited plan to sell a total of 1500 units of the new security light for the same period. Total budgeted sales for each month are as follows: November 500, December 500 and January 500. The company has just concluded a deal to get a bank loan of £19,000 on the 1st November 2022. The interest on this loan will be paid every month. The company will be required to make 12 equal payments to repay the loan starting from the end of December. From their costs estimates, total fixed cost estimated to be £110,200 and it will be shared equally throughout the period. The variable cost is £230 per unit. The fixed costs are for the whole period, so they are not affected by the level of service. However, the variable costs will increase with services output (ie sales output multiplied with variable cost per product). Variable cost will be paid on the basis of 60% in the month of purchase and 40% the following month. Similarly, revenue from the sale of new security light will be on the basis of 60% cash in the same month, and the remaining 40% credit to be paid the following month.   In the past month, there has been a number of meetings in London and Australia where it has been agreed that JLK Limited should do their best to expand the business and raise the required capital in the UK, or perhaps in Europe, so as not to depend so much on cash coming from the parent company all the time. Consequently, the management of JLK is currently assessing two mutually exclusive projects, A and B The net cash inflows from two projects have been provided below
YearProject AProject B
Initial investments80,00090,000
Year 135,00060,000
Year 225,00015,000
Year 310,00015,000
Year 420,0005,000
Year 5       The rate of interest for both of the p   One of the other products that JKL been provided with the following inf     Sales Revenue Direct labour (1 hour) Direct material (1 kg) Fixed overheads Standard profit   The budgeted output for the previo was 850 units, which was sold for £ previous quarter. The actual production costs Direct labour (840 Direct materials (1,2 Fixed overheads   Requirement:   You are required to write a manage which the following points should be   Provide an explanation on th their advantages and disad company can manage the s8,000       rojects is 9% per year.   Ltd has been producing ormation:   £ 30 (10) (8) (3) 9   us quarter was 800 unit 32,000. There were no     were:   hours) 00 kg)         ment report to the man discussed.   e different sources of vantages. You should m ame to help in the plan10,000           is the Basic lights for which you have                   s of the Basic Lights; the actual output inventories at the start or end of the       £ 11,000 9,500 2,900       agement of JLK limited directors in     funding the company can have and ake recommendations as to how the ned expansion program.
Analyse the Investment proposals by using Payback and NPV and provide recommendations. You should also briefly comment on the limitations of using those techniques.The use of management tools such as Budgets and variance analysis. A computation of your cash budget for the first 3 months. Produce a variance statement showing the direct labour, direct materials, fixed overheads and sales variances.Provide other examples that show understanding of the relevant concepts.A detailed Literature Review of the tools you have used such as Investment appraisal techniques, sources of funding and budgets, variance analysis and their importance to business.
Assignment Guidelines:   The rubric by which your report will be assessed is posted separately. It is important that prior to you submitting your work, you read this and objectively assess your response against the rubric. This will ensure that you have done enough to attain the marks you wish to achieve.     Layout Your work should be word processed in accordance with the following: Font style, Arial, font size 121.5 line spacing.The page orientation should be ‘portrait’Margins on both sides of the page should be no less than 2.5 cmPages should be numberedYour name should not appear on the script.

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