Management Accounting: Current Trends & Practices

This assignment delves into contemporary issues within the field of management accounting. It examines evolving practices, such as integrating environmental sustainability and utilizing advanced technologies for decision-making. The analysis also explores how management accounting contributes to organizational success through its role in strategic planning and performance measurement.

Management
Accounting

Table of Content
INTRODUCTON...........................................................................................................................1
TASK1............................................................................................................................................1
(a)Management accounting..........................................................................................................1
(b) Different types of management accounting............................................................................3
M1 Benefits of management accounting system.........................................................................3
D1 Integration of management accounting system and management reporting system in
organizational process..................................................................................................................4
TASK 2...........................................................................................................................................5
P3 Income statement under marginal costing and absorption costing.........................................5
M2&D2 Produce financial reports and its interpretation.............................................................6
TASK 3...........................................................................................................................................7
P4 Advantages and disadvantages of budgetary control..............................................................7
Process of preparing the budget...................................................................................................7
A. Standard cost of PVC sheet.....................................................................................................9
B. Calculation of material price and usage variance....................................................................9
D3 Role of planning tools in solving financial problems..........................................................10
TASK 4......................................................................................................................................11
P5 & M4 Comparison of Dell with the competitors firm, HP and analyze techniques to
respond financial problems........................................................................................................11
CONCLUSION............................................................................................................................12
REFERNCES...............................................................................................................................13

INTRODUCTON
This report contains all relevant information relating to the management accounting in
Dell Ltd. Present this report show all contain the management accounting based to relate how to
improve a management accounting into the organization the financial accounting and how
management accounting provides information to the taking a important part to the enterprise.
What is the cost accounting system, inventory management system, job costing system and
pricing optimizing system is the detailed study. A management accounting provides hoe to
budget get ready the types of budget to benefits by the marketing and organs ion and achieving
same objectives to regarding into the management accounting (Macintosh and Quattrone, 2010).
how the budgets can help the Dell Ltd in the archiving its objectives. The pricing strategies
should use the firm fix the product and services is the described to the report how to useful the
accounting managements to analysis the concept of the operation management and pricing
related issues are moving into the Dell ltd. Under this repot all concept and costing based study
to the how to help the management accounting.
TASK1
(a)Management accounting
Management accounting is the process use of the provisions of accounting information
in order to better inform themselves before they decided the matters to related the within their
organs ion to managements and performances of the control functions. A managements
accounting involves the preparations and providing the timely financials and statistical
information to business mangers so that can day to day short term decisions. management
accountings information to collectives with the help of the financial accountings and cot
accountings. To creates a policy and day to day portion managements of an Dell ltd. It is clear
from the above the management accounting is based the financial accountings and cost
accountings (Ward,2012).
Difference between Management accounting and financial accounting
A management accounting is a techniques to provides that information’s to the managing
the all activities and help to them taking useful decision for the useful of the organizations. The
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main objectives of the mangers is to the taking a decision in maximizing the profits of the
business.
A financial accounting is the process ofa financial statements variables for publics
constipations to ration a financial transaction of the business. A financial process is a specialized
branch of accountings that deals with the evaluating and preparations Dell ltd information’s and
records. A financial process to dealing with the monetary term and mainly dealing with the
financial statements of enterprises and evaluating them and in order to improve the performances
of the financial system of the enterprise.
Importance of management accounting system as a decision making tool
A management accounting is the business to important role plying into the organizations
to decision help to the them to taking the more effectives decision by the providers to the
information to the financial based. The accounting managements is the takes buying decisions to
help the enterprise and taking to the information’s for achieving objectives and goals. To taking a
decision to buying a products and equipment or products. Provides a revaluates cost accountings
system to help the taking a decision to regarding a organizations the method of the objectives to
effectives decision to achieving objectives and goals to maximum profits to minimum cost.
The management accounting is the important of the subjective and objectives based, the
various types to techniques to adopt same facts and evolving same carting idea and information
to taking a decision to regarding to the enterprises. Utilizing same resource the method to
important of the provides a data to group the business. A budgeting and financial statements
project and managements accounting information’s is jut few examples of the marginal costing
and used to provides a information’s to help the guides and futures of the company. A focus on
the data manages can makes decisions at the aim for continues the improvements of the stables
and based on the intelligent analysis the company data to rated the company. A management
accounting is important to taking decisions to regarding into achieving organizing objectives.
(b) Different types of management accounting
There are different types of a management accountings are a following into the Dell ltd
 Cost accounting system: a cost accounting system to framework the enterprise and use
of the estimates the product to deciding the cost of the product important roles to
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identify the various cost to fulfilling the customer’s needs and help organizations goals.
Thee knowledge which products are more profitable and which are less profitable (Faÿ,
Introna, and Puyou, 2010.).
 Job costing: this method to help the enterprise in the knowing of the cost relating to each
job and help to the evaluating’s the profitability related with each job. The method to
useful of the mangers to focusing the techniques more profitable job into the enterprise.
 Price optimizing system: this method to help the enterprise to deciding the prices, the
company to achieving the objectives and goals to related prices and maximum profit to
minimize the cost of the product, to satisfaction the customers need and wants. A method
should be related the price strategies to main role of the accounting managements.
 Inventory managements: this technique to help the enterprise and maintain a optimum
level of the inventory. A also help to demand to fulfilling to the customers a inventory
management is the main important to the enterprise because the a lack of the inventory
does not able to meet the customers’ demands and also help to the inventory to reducing
the storages cost.
M1 Benefits of management accounting system
Benefits of management accounting system a effectives to business enterprise there are
various types benefits enterprise followings
 To increase the financial return: a management accounting system to help into a
increasing financial return to effective, to enhancing the profitability of the enterprise.
The specific object of the business enterprise to collective’s information the mangers to
taking a better decision to regarding to customer’s satisfaction’s and clarify the demand
to the archiving the profitability to the business. Anaccounting system also help to the
plan and provides an information to regarding to the busies operations to plan a various
activity to the organizations. A performancesevaluated does not the management
accountings it also helps to performance of the employee to perform something into the
organizations.
 Business decisions: the most useful is the managements of accounting to the enterprise to
taking a better decision to regarding the organizations. A management accounting system
to help and evaluated the business activates and touseful for the managements and
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business. To adopt same resources to related the various activity of information to taking
a best results and solving all problems.
D1 Integration of management accounting system and management reporting system in
organizational process.
A integration of a management system accountings and managements reporting to all
system to organization to process implements to set off same targets to preparation of the same
criteria of the subject to full fining same objectives to clearly define the objectives to taking a
decision to regarding into management accountings to set off target of the markets. Management
accountings evaluation’s the all activities to correctives actions is the need into the enterprise to
increasing the outputs. A management reporting is the various techniques to increasing the
efficiencies in their business operations. Management reporting’s is the system to recoded to day
to day actives to taking a better decision to regarding the operations managements to creates a
natures to adopts same idea and fuelling the same demands of the customers. A mangers to
creates daily activates to recorded to the effetely of the business operations (Bennett, Schaltegger
and Zvezdov, 2011). Taking corrective actions helps business operations to improve the all
business activities. This is the evolves the performances of the employees of the employees
enterprise and help to the mangers planning the developingand the training programs of the
employee. Management accounting and reporting system helps in maximizing working
efficiency and achiness thee goals and effectively (Schäffer, 2013). Dell ltd is also help to the
both activities and effectively and efficient of the businesspurpose. A managementaccounting is
directing to collectives all activities those activities to related by enterprise. It is simply based on
the factors and affected to mangers to avoid based on the activity.
By using various MA systems like job costing, inventory reporting and price optimization
into the Dell Ltd, its managers will be able to manage all the business information in software
and produce reports any time whenever required. It reduces the requirement of paperwork and
also facilitates mangers in integrating information from all the operational areas and performance
evaluation also. Measuring performance and its analysis assist the Dell’s managerial team to
make sound decisions for cost control, resource allocation & distribution, sales maximization,
marketing and promotional tactics and others.
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TASK 2
P3 Income statement under marginal costing and absorption costing
Absorption costing is the all costing which occurs in the making a manufactures a
product to adopt same resources to the organization. It calculates the all the variables cost is he
occurs in makings the products including raw materials and to specific to the ignore the fixes t
cost because fixit cost is the cost of the product is that cost is which will occurs indirectly
expense. Absorption costing is the add the directly materials manufacturing the various cost
availed the manufacturing overheads in the calculating the cost. Absorption cost is the important
to costing the cost of the product and based on various cost to directly and indirectly bed on the
price to utilization some resources to adopt same aspect of the company. Basically the
management so the activity to resolving thee all item of thee product to direct cost important. A
marginal costing the opacities to cost which occurred to the while the making of the extra
produces, it is the simple process t to changes the cost of which happens when one product is the
total cost and other is decreasing the cost of the total based. A marginal costing is the important
of the developing of the product to select a best alternatives course of the actions for examples a
making one new products increasing the total costing and of the productions and the enterprise
they should go for making the one and more products and cost rising the enterprise and making a
productions and should not more products to the production process. One new product to impact
of the production of the marginal costing a new product is raising the various activities of the one
and more based.
Calculation of per unit cost under both the costing method
Marginal/variable costing Absorption/full costing
Material purchased 20 20
Labor cost 8 8
Variable manufacturing exp. 4 4
Fixed manufacturing exp. 10 -
Unit cost 42 32
P&L statement under absorption costing
Particulars Amount
Sales revenues (40000*67.50) 2,700,000
Less; Cost f good sold
Opening inventory 0
Add: cost of manufacturing 2100000
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(50,000*42)
Less: closing stock (10000*42) 420,000
COGS 1,680,000
Gross profit (2,700,000-1,680,000) 1,020,000
Less: Selling & admin exp 840,000
Net operating income 180,000
P&L statement under marginal costing
Particulars Amount
Sales revenues (40000*67.50) 2,700,000
Less; Cost f good sold
Opening inventory 0
Add: cost of manufacturing
(50,000*32)
1,600,000
Less: closing stock (10000*32) 320,000
COGS 1,280,000
Variable selling & admin. exp 240,000
Contribution (2,700,000-1,280,000-
240,000)
1,180,000
Less: fixed Selling & admin exp 600,000
Fixed manuf. exp 500,000
Net operating income 80,000
M2&D2 Produce financial reports and its interpretation
Calculation made above
Looking onto the outcome, it is noticed that marginal costing method has computed unit
cost @ 32 whereas the same under absorption costing is derived to 42 per unit because variable
costing method did not consider fixed production cost. As a result, the profitability statement
reported high net operating income under full costing method to 180,000GBP whilst the same in
marginal costing is derived to 80,000GBP.
TASK 3
P4 Advantages and disadvantages of budgetary control
 Sales budgets: A sale is the total sales revenues to crates a firm by selling products and
services to the specific markets.
 Financial budgets: a main objectives of financial budgets to maintain the long term and
short term budgets to required to the departments.
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 Master budgets; master budgets including the all departments, it includes the sales
productions financial and overheads budgets. To show expenses and incomes to the
enterprise.
Advantages and disadvantages of budgets
 The advantages of the sales budgets to show can how can general by the enterprise and
disadvantages of the sometimes the sales budgets does the false assumptions of the
process
 The advantages of the production budgets help to incasing to the goodwill of the
enterprise and to fuelling the demand of the consumers. Disadvantages to difficulties that
the deciding of the optimum level of the stock
Process of preparing the budget
 Gaining information: Before making an effective budget the manager should collect
all the relevant information like the sources of income and expenses. A manager
should collect the relevant information and should make an average of monthly
expenses.
 Record to all the sources of income: What are the main sources of income should be
should be studies by the manager before making a budget.
 To create a list of expenses funds related: Expenses are the most important part of a
budget. A manager should study all the main areas where the funds required.
M3 Different types of budgetary control
There are many planning a tools variables of the mangers of the enterprise to disputes
same aspect of the makes a better decision to regarding into the objectives same objectives and
with the maximum profit and minimum cost. Planning includes the effective’s decisions and
focuses on competitive places in markets.
Incremental budgeting:
This method uses budget of the previous year and add some incremental amount to make
a new budget. Thus, it just needs slightly adjustments and no market research is conducted.
Benefit:
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1. Easy preparation and less-time consuming process
2. Maintain coordination among all the departments
3. Consistent resource allocation
Drawback:
 Promote expenditures in unproductive activities
 No incentive available for cost reduction
 Do not boost staff motivation
Zero base budgeting: This method use zero as base an extensively examine the prevailing
market conditions to make budget. It assesses usefulness of every activity in the operational
areas and makes decisive actions regarding resource allocation, cost estimation and others.
Benefits:
 Motivate staff
 Address market conditions
 Efficient use of resources and its optimum allocation
Drawbacks:
 Time-consuming process
 Costlier approach of budget preparation
 Training requirement
 Lack of talented professionals may bring issues
A. Standard cost of PVC sheet
Standard cost
4000 comp /keyboards
* Rs.
3.6 / ft. of sheet
*2.5 ft. sheet per key board = 36000
Actual cost
1100ft = 37400GBP
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Material cost variance: Budgeted cost of material-actual cost of material
= 36000GBP-37400GBP
=1400GBP Adverse
B. Calculation of material price and usage variance
Material price variance = AQ*(SP-AP)
= 10000ft (3.60-3.40)
= 2000(F)
Material usage variance = AP (SQ-AQ)
= 3.4(10000ft-11000ft)
= 3.4(1000ft)
= 3400 (A)
MCV = MPV + MUV
= 2000 (F) + 3400 (A)
= 1400 (A)
The results computed above clearly reflect that due to high use of PVC sheet by 1000 ft
in comparison to the targeted quantity, Dell Ltd has incurred adverse MUV of 3400. However,
MPV shows favorable result because material was available in the market at less cost of 3.4GBP
than budgeted price of 3.60. It incurred an adverse MCV of 1400GBP. Therefore, it is necessary
for the production management to implement control over the use of material in the production
and minimize wastage so as to combat adverse MUV and thereby accomplish budgeted targets.
D3 Role of planning tools in solving financial problems
The roles of the planning system to simple solving problems it help to enterprise in the
measuring the same activity to solving the problems. the planning tools collects same all relevant
information to regarding the seeing the true of the pictures of the enterprise so it any problems
are occurs to the collectives mangers can better solves the all problems based on the
information. Manger to solving problem to removing into the organizations context of the
management accounting related solving problem (Hülle, Kaspar, and Möller, 2011)..
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These are the several management accounting techniques which Dell ltd can use to
respond financial problems in the business effectively, presented below:
 Ratio analysis: In these techniques used by the management’s to do the followings
functions likes planning coordination’s and control of the marginal. It method to be
effectives controlling to the overall of business activities to regarding the same aspect
of the same objectives. Different ratios i.e. profitability, solvency and liquidity helps
to examine business position and bring out the best solution to improve profit and
financial position of Dell Ltd.
 Budgeting: The pinning and budgeting is to the recorded the sales are continues
checked by the managements to do the all actives to regarding the methods
andplanning’s the controlling into the business activities. Comparison of budget and
actual results helps to identify variances and helps in decisive planning and decisions
to ensure success.
 Performances management: a perfume’s management is the techniques of the based
on the subjective to records of sales is continues and checked by the managements to
do the further planning.
 Decision makings: a decision making is the process of the every mangers want to
takes and decisions with a useful of the results to the enterprise and managements
accountings in to providing information which help to improve the decision making
of the enterprise.
TASK 4
P5 & M4 Comparison of Dell with the competitors firm, HP and analyze techniques to
respond financial problems
Ratio analysis: Responding financial difficulties is necessary so as to maximize
competitive position of the entity and thereby beat rivalries successfully. There are number of
financial ratios which might Dell can use to examine its own performance over the period and
compare it with the competitor success (Carenzo and Turolla, 2010. Dell is facing stiff
competitive pressure from rivalry firm, HP, which performance has been evaluated here through
ratio analysis.
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Particulars Dell HP
Turnover 56940 111454
Gross profitability 12186 26615
Net earnings 2372 5013
Gross profit ratio 21.40% 23.88%
Net margin 4.17% 4.50%
It is reflected in the table, that Dell’s Gross profit ratio for the year 2016 is reported to
21.40%. No-doubt, it indicates good profit still, looking to the competitor firm, HP has gained
high gross profit on their sales to 23.88%. It clearly presents that rivalry is performing better due
to high sales and economies of scale benefits. Besides this, net profit ratio of dell is also founded
comparatively less to 4.17% whereas HP’s ratio is computed to 4.50%. Excessive overheads, less
monitoring & supervision by the divisional managers might be the reasons for less net return in
Dell. Thus, it indicates that Dell’s managerial team must make suitable strategies for improving
its bottom line. Taking into consideration the result, it is better to advise that firm must make
plan for sales maximization i.e. promotional offerings, discounts and others tactics. Besides this,
it is also considered advisable to the entity to make rationalized plan for cost-cutting and also
monitor the actual execution of work to put control over the resource use so as to manage cost
successfully.
Variance analysis: Dell’s management team can make budget and after the completion
of the budgeted duration, actual outcome needs to be examined against the decided targets to find
out variances. With the help of this technique, firm can put control over the cost overrun and less
sales revenues to combat adverse results which may lead to bring financial difficulties (Ramljak,
and Rogošić, 2012).
Planning tools is the enterprise help to the developing various s aspect and archiving the
goals and objectives to the effective manner. Planning tools evaluates the performances or work
done by the employee and according to the employee working strength and weakness.
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CONCLUSION
From the above report it can be concluded that Dell Ltd can use the tool of management
accounting to achieve the objectives. To deal with dell and improving the sales of the company,
the report tells us about how management accounting is different from financial accounting. How
management accounting helps the managers in taking important decisions of the enterprise. To
purchasing same aspect of the resources and different type’s sales activities Job, absorption and
marginal costing are detailed in this report. What are the main pricing strategies and how it can
be better used by the management of the enterprise to perform better and achieve and achieve
competitive advantage in the market place. Dell the adapt to strategies to improvement of the
subject of the report
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