The paper "FreeAir Skate Pty Ltd - Preparation of Income Statement " is a good example of a finance and accounting case study. FreeAir Skate Pty Ltd is a firm founded by John Eustace with 1-year operations. It is engaged in the manufacture of innovative and stylish skateboards. The firm’ s immediate production base is situated in Malaga, Western Australia. Subsequently, it has numerous stores positioned in Innaloo, which is about 16km away from the manufacturing plant. Presently, the firm manufactures a total of three distinctive skateboards that include; SnowSkate, SurfSkate and DirtSkate, which are focused to imitate the feeling of snowboarding, surfing and off-roading respectively. The fundamental focus of this report paper rests with identifying the role of a management accountant in adding value to activities of the firm, preparation and expounding on the income statement and, also a schedule of costs of goods manufactured, establish the expenses as well as develop a cost formula for each of the mixed expense.
Consequently, the report puts up a discussion on the purpose of the ABC costing system and expounding on whether the costing system should be introduced into the firm’ s operations. 2.0 Role of A Management Accountant The role of management accountants in a given firm’ s operations has changed a lot from one of a passive prepares of financial information to a rather more proactive role that involves intensive active participation in daily decision making as well as a subsequent focus on a wider array of information that far surpasses the financial obligation (Clinton, and White, 2012). FrreAir can enjoy immense levels of value by adopting management accountants’ expertise.
They portray a wide array of knowledge in regards to the formulation and implementation of new standard costing systems and tools.
These tools might help the firm to improve on its underlying cost information with the formulation of effective decision making support systems in order to prioritise the level of costs and operations. Notably, the firm might use the expertise portrayed by management accountants to prioritise cost reduction and ensure there is imminent driving efficiency mechanisms are set in place (Clinton, and White, 2012. Management accountants help to generate a cost structure and formula that is deemed relevant and actionable in making effective future decisions (Clinton, and White, 2012.
In order to reduce costs incurred by the firm, it will be a crucial factor to employ the services of a management accountant to come up with streamlined processess as well as improve productivity mechanisms. Certainly, the firm can benefit from securing a management accountant because, with the recent economic downturn, these accountants can help to generate greater demand for more accurate and appropriate cost reduction (Paulsson, 2012). In fact, management accountants have made sure to meet the needs of a company maintaining an accurate and transparent accounting data in order to protect its operations from the negative effects that emanate from the ever-changing economic environments (Clinton, and White, 2012.
Significantly, since most firms’ have continued to focus their activities and operations elsewhere, it has been noted that, without the knowledge portrayed by management accountants, they have remained stagnant to proceed with further cost reduction strategies or rather more useful cost management information.
Clinton, B. Douglas, and Larry R. White. 2012. "The Role of the Management Accountant: 2003-2012." Management Accounting Quarterly 14, no. 1: 40-74.
Charaf, Karim, and Ahmed Fath-Allah Rahmouni. 2014. "Using importance performance analysis to evaluate the satisfaction of Activity-Based Costing adopters." Accounting & Management Information Systems / Contabilitate Si Informatica De Gestiune 13, no. 4: 665-685.
Paulsson, Gert. 2012. "The Role of Management Accountants in New Public Management." Financial Accountability & Management 28, no. 4: 378-394.
Murdoch, Brock, and Paul Krause. 2012. "Regression and Mixed Overhead Cost Variances." Feature Edition 2012, no. 3: 35-44.
Schroeder, Marek, and Nick Rowbottom. 2013. "A Kantian Analysis of Financial Accounting." Journal of Theoretical Accounting Research 8, no. 2: 38-78.
Tamás DékánI ldiko Orbán Ms. 2014. "Role and Significance of Statement of Other Comprehensive Income– In Respect Of Reporting Companies' Performance." Annals of the University Of Oradea, Economic Science Series 23, no. 1: 649-658