Word Count: 2,000 Learning Outcomes Assessed by this Assignment: - MLO3: Identify and apply appropriate management accounting techniques to assist in management decision making - MLO4: Make use of management accounting information to assess business performance. Assignment Detail: WAZ limited is a UK subsidiary of the Australian MMC Group. The company has been operating in the UK for the past 6 years. WAZ provides sporting equipment to a number of sporting activities such as Football, Racing, Running, Cycling, Tennis, and Swimming in the UK, USA, and Australia. For the past 6 years, WAZ 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 WAZ 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 cash flow problem that WAZ Limited had been facing. The company is dependent on the parent based in Australia for funds, as and when required. One of the company's products, a football helmet for the North American market, requires a special plastic. Last year, the company manufactured 4000 helmets, using 20000 kilograms of plastic in the process. The plastic cost the company 2.35 per kilo. However, according to the standard cost card, each helmet should require 4.6 kilograms of plastic, at a cost of 2.50 per kilogram. Moreover, a total of 750 of direct labour time was recorded at a total labour cost of 10,425. Nevertheless, the company budgeted for 0.2 direct labor hour per unit at the standard rate of 12. The company's management wants to know the causes of these variances. In the past month, there has been a number of meetings in London and Australia where it has been agreed that WAZ 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. The company is planning to expand and launch a new tennis rackets called V-Shaped with a selling price of 390 per racket. WAZ Limited plan to sell a total of 1200 units of V-Shaped for the same period. Total budgeted sales for each month are as follows: November 400 , December 400 and January 400. From their costs estimates, total fixed cost estimated to be 135,000 and it will be shared equally throughout the period. The variable cost is 130 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 50% in the month of purchase and 50% the following month. Similarly, revenue from the sale of V-Shaped will be on the basis of 50% cash in the same month, and the remaining 50% credit to be paid the following month. Required You are required to write a well-researched and referenced management report to the directors of WAZ limited in which the following points should be discussed. [] Provide a critical explanation on the different inventory valuation methods available for WAZ Ltd and their advantages and disadvantages. You should make recommendations for the company on the suitable valuation method to use. [ The use of management tools such as Budgets. A computation of your cash budget for the first 3 months. [] A computation of variance analysis. The possible causes of these variances. You should also briefly comment on the use of standard costing and variance analysis to the company. []. Some other examples that show understanding of the relevant concepts