Accounting and management Essay Example | Topics and Well Written Essays - 1250 words

Accounting and management - Essay Example Wages have increased by almost by 17%, electricity expenses have gone up by 11%; a similar increase has been experienced for accountant charges. Single digit increases have been witnessed by expenses on rent (9.09%), insurance premium (5.66%), and telephone bill (6.25%). The most distressing deviation has been suffered by the component of sundry expenses, by an abnormal amount of 40%. This points out to the fact that the company does not have adequate control on money flowing out in minute amounts. It has spent in necessary amounts that have resulted in the sundry expenses surging so high. The high sundry expenses can have another implication as well. There might be corruption in the system and the employees take undue advantage of the same. There needs to be sufficient control on the expenses as revealed by the analysis. Samuel Pepys needs to carry out adequate research before he embarks on the preparation of annual budget. The company had actually exhibited operational efficiency by garnering a higher sales volume than was budgeted. However, all of that achievement got subsided by the enormous costs incurred by the company. Use of accessories like telephone and electricity must be regulated and used as needed. Unnecessary wastage of costly resources must be avoided. Methodical accounting of all expenses must be carried out and reviewed on a periodical basis so that the purpose for which a cost is occurring gets effectively monitored. The management should initiate proper steps to ensure that they can check the adverse labour rate variance and material cost variance. Though the actual sales has increased from the budgeted sales, yet because of the increased expenditures, the company’s actual profit is lower than that of the budgeted profit. So, to check the excess expenditures proper steps are recommended to the