I need you to have a look at another project and condense it to 1500 words. add an executive summary and conclusion and verify that the contents written are correct. Could

Executive Summa 1. Introduction The report is prepared to evaluate the cost control and management accounting as it relates to the production of tables, one of the main products of Orchid PLC. The period under evaluation is March 2016. The report will, therefore, examine the budgeted cost against the actual results and flexible budget for the period. Further analysis is done in order to determine the reasons for favourable and unfavourable results and variances. The main findings of the report, an analysis of cost control with the prospective for improvements where necessary will be discussed. The report culminates with a conclusion. 2. Main financial findings We will explore the original budget (or actual budget), actual results and the flexed (or otherwise known as flexed) budget so as to measure the performance of the table which is a product of Orchid Ltd. 2.1. Summary of budgets and actual performance Table 1 showing Original Budget, Actuals and Flexed Budget for Tables at Orchid Ltd. Though Orchid's Actual Sales units exceeded the Original Budget Units, the value of those sales as indicated in Table 1 above were 1% less than budgeted. Expenditure over budget in the areas of direct labour by 11% is concerning and needs to be assessed. Expenditure on fixed costs also exceeded the budget by 2%. The result was a standard profit margin 13% less than budgeted. The flexed (or variable) budget is a costing tool used to make a more on par comparison between the actuals and the budgeted performance. It takes into consideration the sales volume and the comparative activity of the cost drivers (Majmaah University, n.d.). The results show that the actual standard profit when compared to the flexed budget was an unfavourable 17%. While the comparable flexed expenditure was lower than compared to the original budget, the costs of direct labour seem to be one of the main concerns. 2.2. Management Accounts for Orchid Table Production The following management accounts show the major difference per income statement line item representing revenue, expenses, contribution margin and operating income. The flexible budget variance is the difference between the actual result and the flexed budget. Each sales volume variance is the difference between the flexed budget and the original budget (Atrill, P. & McLaney, 2014). Table 2 Showing the flexible budget based variance analysis for March 2016 The results in Table 2 ( Horngren, n.d.) above show that there is an Overall unfavourable budget variance of GBP 3020. This represents 13% of the budgeted profit. This therefore is an overall indicator that the performance of the production and sales of tables has not been effective as targeted profit was not met. The GBP 460 favourable sales variance represents 2 % of the original budgeted operating income. This is a good indication of the effectiveness of sales tactics and these should be further explored to see how these can continue to be beneficial to continue to increase sales. However, in reviewing the sales strategy, special attention needs to be given to the sales price, as there was an unfavourable GBP 1620 variance when analyzing the sales price. The overall direct materials variance is favourable standing at GBP 190 which represents 1% of the budgeted profit, while the direct labour variance of GBP 1850 is unfavourable contributing negatively to attaining the budgeted operating by 8%. The unfavourable fixed overheads variance of GBP 200 represents 1% of the budgeted operating profit. In analyzing these cost drivers it is seen that the direct labour price and usage has been inefficient and ineffective to a large degree. The use of the direct materials, on the other hand was effective however there seem to concerns around their efficiency as we will later explore. Fixed overheads are slightly above budget, but this is contributing negatively to the bottom line. This above review of the key variances is summarized in the reconciliation below in Table 3 (Week 5 Notes). 3. Analysis of main cost drivers A further look at the captioned areas are further explored. 3.1. Variance analysis of direct costs Table 4 analysis further details the causes of the direct costs variances. The direct materials have a favourable price variance of GBP 1750, which reflect good and effective purchasing practices (Woolf et. al, 1986). There are however, significant concerns around the efficiency or usage of the materials as there is an unfavourable variance of GBP 1560. This is indicative that there may be low quality material and a greater look is needed at quality control and the this is linked to the labour's efficiency practices (Woolf et. al, 1986). Table 4 also summarizes the direct labour matters as the unfavourable price variance of GBP 850 and unfavourable efficiency variance of GBP 1000 speak to poor management of the labour force in the production of the tables. This could be caused because of lower grade or under skilled workers. There could also be some issues around the quality of the material that may be causing re-work and the need for overtime which would contribute to the price being higher than expected. The Direct Labour Rate is an unfavourable GBP 850. This may be indicative of poor negotiating of the wages with union representatives of employees. While the higher wage may have resulted in the number of sales increasing the increase labour cost has reduced the value of the profit that Orchid is able to make from the production of these tables. . 3.2. Investigations to improve cost control Please review and reduce words Direct material variance. This refers to the difference between the actual material and the standard material which may be due to material usage or price usage variance for every level of achieved output. Of note, a favorable material usage is suggestive of a positive indicator of efficient utilization of resources within the organization. On the other hand, unfavorable material usage indicates wastage of resources perhaps by employees without proper control mechanism in place. Adverse material usage is caused by the purchase of lower quality than the standard. Additionally, the employees do not possess the skill sets. No training and development on the part of the employees to improve their productivity. For example, material usage variance of -1560 and use of traditional tools and practices. Therefore, to solve the problem better technological means and workers efficiency must be monitored. Orchid Furniture has shown a better material price variance which is attributed to the company taking advantage of the discount period by------ supplier and -----Suppliers for the last two months has shown a slight improvement, secondly, is that there has been the replacement of providers who offer affordable and cheaper materials. Owing to a favorable material price variance for this company, the company can obtain a favorable total direct material variance for orchid furniture. Labor rate variance. Labor is an area not fully utilized as expected in Orchid Ltd. Labor efficiency variance in Orchid Ltd is ($1000) owing to the new employees recruited the previous month and that they were not familiar with the production process and that each worker has a unique skill. Machine breakdown due to power blackout attributed to idle time. The directors, therefore, have to provide alternative means of electricity whenever there is blackout such as the use of solar energy. The difference in direct labor rate variance is based on individual skills and experience. The company had employed two new experienced employees thus surpassing the standard work rate. Therefore, retrench the casual or contracted employees to curb the increasing labor rate variance. The fixed overhead variance. It is an area that has improved since last six months and the control put in place in every department has shown significant steps to include: the control of running water taps, the control of unnecessary lighting system thus resulting in a favorable variance of $200. 4. Conclusion Please review document and do short conclusion, n.b. same concluding points can be used in the exec summary The solution of management accountant for this company is to provide cheaper alternative means of reducing the cost of production like buying from suppliers offering similar commodities at a lower price and reduction of machine hours in areas where laborers are not needed. This reason explains why Orchid furniture has a total unfavorable sales despite having good sales volume. 5. References ANNEX I: Clients information Week 5 Collaboration Group Work Question A Orchid Ltd is a furniture manufacturer. One of its products, a table, has the following standard costs: Direct materials (8m @ 3/m) 24.00 Direct labour (1 hour @ 25/hr) 25.00 Fixed overheads 16.00 65.00 Selling price 95.00 Standard profit margin 30.00 The table is made from solid oak and the above materials reflect the size of the table in square metres. The monthly production and sales are planned to be 800 units. The actual results for March were as follows: Sales revenue Less Direct materials 75,330 (19,250) Direct labour (22,100) Fixed overheads (13,000) Operating profit 20,980 (7,000m) (850 hours) There was no opening or closing stocks. The company manufactured and sold 810 tables. Required: a) Calculate the flexed and actual budget b) Calculate the following variances: Sales variances; volume and price Direct material variances; usage and price Direct labour variances; efficiency and rate Fixed overhead variance; spending c) Present the above information as a part of a Business Report, providing possible explanations for the variances that you have calculated and suggestions as to how the company might try to improve its cost control