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Easyjet Case Study Management Accounting

1617 Words7 Pages

Management Accounting Practices of the easyJet plc

Introduction The main objective of the paper to explain the accounting practices of easyJet plc. The paper will explain the summary of the company including its business activities, along with the management accounting information that helps managers of business. Examples of types of information will need to be responding. Furthermore, the paper will evaluate the budgeting, variance analysis, and activity based information, which is used within the company. Moreover, the recommendation of decisions must be applied by the managers of company with respect to factors of management accounting.

Part A
Summary of company easyJet is founded by Sir Stelios Haji-Ioannou in 1995, is considered …show more content…

Hence, variances are analysed by shaping how much differences have impacted the revenue and profits (Horngren, 2012). This specific aspect is essential for accounting managers of easyJet that takes the correct strategic direction, which is required to prevail over the issues before to cut the profits too much. Thus, variance analysis occurs with the finding rate.
Another aspect is activity based costing as it has modelling system that is found in manufacturing firms. The main issue with this aspect is manufacturing firms has to focus on valuing inventory as easyJet cannot do but use standard costs, which is calculated for direct materials and labours. Although, they both are not part of airline industry, which is tricky to calculate the standard costs with the service setting as it is needed to know the accurate costs with the basic service …show more content…

The effectiveness of business comes with the consistency of progress along with all different factors. The aspects of budget variance are also discussed. However, while considering the different non-financial factors; environmental and competitive analysis is also being done in the paper in order to complete form of analysis. It is rightly said that customer satisfaction is assumed as the main factor to which easyJet becomes successful for company that always brings changes, which is based on customers in order to offer the low cost

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