Management Accounting Research Trends

This assignment examines the current state of management accounting research. It delves into various research areas, including the evolution of management accounting practices, the impact of technology on research methods, and emerging trends such as sustainability reporting. The analysis draws upon a selection of scholarly articles to highlight key findings and identify future research avenues within the field of management accounting.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Evaluating the decision of replacement of loader truck (Situation 1):.......................................2
Conniving provision of Flying Airline Company and detecting whether old or new loader is
needed for their services:...........................................................................................................2
Evaluating the income generated from different flight route (Situation 2):...............................5
A) Detecting flight route viability, which could allow Airline company to improve its
financial performance:...............................................................................................................5
B) Identifying other factors, which needs to be discussed, while making the decision for flight
route:..........................................................................................................................................7
Detecting the viability of special tourist charter flight (Situation 3):........................................8
A) Evaluating calculation for the new special tourist charter flight when spare capacity is
present and detecting its financial viability for the company:...................................................8
B) Identifying the viability of special tourist charter flight when no spare capacity is present
for the airline company:...........................................................................................................10
Reference and Bibliography:....................................................................................................12

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Evaluating the decision of replacement of loader truck (Situation 1):
Conniving provision of Flying Airline Company and detecting whether old or new
loader is needed for their services:
Situation 1
Particulars Not replacing Old loader
Depreciation $ 25,000.0
Write off $ 0.0
Proceeds from sale $ 0.0
Depreciation of new loader $ 0.0
Operating costs $ 80,000.0
Total $ 105,000.0
The above table indicates the total operating expenses of Flying Airline Company,
when the organization does not replace the old loader. Moreover, the calculation directly
values depreciation and operating cost that is incurred by the company promise operations.
This totals the overall operating cost to $105,000, which relatively produces actual income of
the organization. Bromwich and Scapens (2016) mentioned that evaluation of cost incurred in
operations allows management to detect adequate opportunities, which could reduce excess
expenditure conducted by the organization.
Situation 1
Particulars Replacing Old loader
Depreciation $ 0.0
Write off $ 25,000.0

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Proceeds from sale $ (5,000.0)
Depreciation of new loader $ 20,000.0
Operating costs $ 50,000.0
Total $ 90,000.0
The total operating cost can be identified from the evaluation of above table when
Flying Airline Company use new loader. The operating cost when using the new loader
mainly declines to $90,000. The calculation of total operating cost is detected by writing of
$25,000, where the position of new loader and proceed from the sale of old loader is
calculated. This directly helps in identifying the overall cost incurred by the Flying Airline
Company in implementing the new loader in its operations. In this context, Chiarini and
Vagnoni (2015) argued that changes in operations could eventually increase expenses of the
organization if adequate research or not conducted by the management before taking the
decision.
Situation 1
Particulars Differential cost
Depreciation $ 0.0
Write off $ 0.0
Proceeds from sale $ 5,000.0
Depreciation of new loader $ (20,000.0)
Operating costs $ 30,000.0
Total $ 15,000.0

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Differential cost can be identified from the above table for Flying Airline Company,
which would allow the management to make adequate decisions to implement the new loader
or continue with old loader. The total savings on operating cost that will be conducted by the
Flying Airline Company is $15,000, which helps in increasing its profitability. The
differential cost directly neglects any kind of changes in depreciation and write conducted in
previous calculations. Furthermore, differential cost directly states positive value for proceeds
from sales of old loader, while negative value is detected for the depreciation of new loader.
Lastly, the difference in operating cash is detected to be $30,000, which would allow the
organization to reduce its overall cost. This differential cost could eventually help in
identifying the savings that will be conducted by Flying Airline Company after implementing
new loader in its operations. According to Coad, Jack and Kholeif (2015), differential
analysis allows management to identify and detect measures in which expenses can be
reduced in its operation. Cooper, Ezzamel and Qu (2017) further stated that selection of
equipment and machinery are conducted with the help of differential cost, which allows the
management to identify the benefits provided from is investment.
Hence, from the evaluation financial viability could be achieved by Flying Airline
Company, if new loader is used in its operations. The company could save $15,000 from a
separation in the current fiscal year if adequate changes are conducted in its loader.
Furthermore, total operating expenses from next year will mainly be around $95,000, as sale
from proceeds will not be recorded for the new loader. This will mainly improve the overall
cost by $10,000, as compared to the current expenses conducted by flying airline company.
Dekker (2016) stated that differential analysis provides in depth knowledge about the cost
and the benefits that will be provided by implanting new machinery, which is essential in
improving profitability of the organocation.

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Evaluating the income generated from different flight route (Situation 2):
A) Detecting flight route viability, which could allow Airline company to improve its
financial performance:
Situation 2
Particulars Non-Stop Route
Passenger revenue $ 240,000.0
Cargo revenue $ 80,000.0
landing fees in San Francisco
Flight crew cost $ (2,000.0)
Fuel $ (21,000.0)
Meal $ (4,000.0)
Aircraft maintenance $ (1,000.0)
Net revenue $ 292,000.0
The above table indicates overall net revenue that will be provided from the nonstop
route to Flying Airline Company. Total revenue provided from the nonstop route is $292,000,
which is generated from the total passenger revenue and cargo revenue earned by the
organization. The cost regarding flight crew, fuel, meal, and aircraft maintenance are
deducted from the revenue generated by nonstop route. Evaluation of the overall cost and
revenue from an operation allows organizations to take adequate decisions to increase their
profitability and operational capability (Fullerton et al. 2014).
Situation 2
Particulars With stop route
Passenger revenue $ 251,000.0

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Cargo revenue $ 80,000.0
landing fees in San Francisco $ (5,000.0)
Flight crew cost $ (3,400.0)
Fuel $ (26,000.0)
Meal $ (4,900.0)
Aircraft maintenance $ (1,000.0)
Net revenue $ 290,700.0
The table indicates the overall profits generated from one stop route, which is been
proposed to Flying Airline Company. additional cost incurred by the organization due to the
inclusion of one more route in its flying pattern. This additional cost is relatively declining
the overall profitability of the company to $290,700 from the previous profits of $292,000.
This decline in profitability is mainly due to the additional landing fees at is entered by the
one stop route. Evaluation of the financial performance for operation directly allows the
management to detect financial viability of the operations and whether it could provide
adequate revenue. Gibassier and Schaltegger (2015) stated that evaluation of operations
directly allows the management to detect cost and expenses conducted on each stage.
Situation 2
Particulars Differential cost
Passenger revenue $ (11,000.0)
Cargo revenue $ -
landing fees in San Francisco $ 5,000.0
Flight crew cost $ 1,400.0
Fuel $ 5,000.0

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Meal $ 900.0
Aircraft maintenance $ -
Net revenue $ 1,300.0
Differential Cost Analysis could be identified from above table, which helps in
depicting financial viability of the two-situation presented to Flying Airline Company. The
evaluation indicates that there will be no cargo revenue provided from the new one-stop route
used by Flying Airline Company. Differential cost represents that there will be an increment
in passenger revenue, cargo revenue will directly decline for the company. Furthermore, the
company also incurs landing fees and other flight cost, which increases expenses from
operations. However, the evaluation of differential cost in the kids or net loss of $1,300 if the
new one stop route is used by flying airline company. This relevant decline in profitability
could eventually hamper future cash availability of the organization, while declining its
current net revenue stream. Therefore, it is estimated that decline of the current one stop route
proposed to flying airline company could eventually help in improving its revenue in long
term. this could eventually support the organization on financial base, which could intern
improve its cash reserve. Hopper and Bui (2016) stated that identification of different cost
incurred from in operation allows management to understand the relevant profitability, which
could be obtained from the decision.
B) Identifying other factors, which needs to be discussed, while making the decision for
flight route:
From the valuation of situation 2, other factors that needs to be discussed before
making the decision of one stop route. There is fairly two different factors that is to be
understood by the flying airline company before making the relevant decisions. The first

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factor is the increment in operations from one stop flight route. This increment in the overall
operations could eventually lead to higher revenue generation in near future. This could
eventually help Flying Airline Company to improve its operation and conduct additional
flight routes. The second factor that needs to be addressed by Flying Airline Company is the
economy in which operation needs to be conducted. Economic evaluation could help in
detecting purchasing power of customers and understand that the citizens could adopt
increased prices (Kotas 2014). This would eventually allow the flying a line company to
improve its operations and generate higher revenue in future.
Detecting the viability of special tourist charter flight (Situation 3):
A) Evaluating calculation for the new special tourist charter flight when spare capacity
is present and detecting its financial viability for the company:
Situation 3
Particulars Value
Passenger revenue $ 250,000.00
Cargo revenue $ 30,000.00
Total revenue $ 280,000.00
Variable expenses $ 90,000.00
Fixed cost $ 80,000.00
Total expenses $ 170,000.00
Profit $ 110,000.00
The table directly indicates overall revenue, which could be generated from the flight
conducted by Flying Airline Company. This revenue detected in the above table is mainly
obtained during normal circumstances, where in the company is conducting both cargo and

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passenger operations. This evaluation could eventually help the management to understand
the significance of special tourist charter flight plan that is proposed to flying a line company.
Lavia, and Hiebl (2014) mentioned that management with the help of cost evaluation can
identify revenue opportunities, which could increase total income of the organization.
Situation 3
Particulars Value
Passenger revenue $ 160,000.00
Cargo revenue $ -
Total revenue $ 160,000.00
Variable expenses $ 85,000.00
Fixed cost $ -
Total expenses $ 85,000.00
Profit $ 75,000.00
The evaluation of situation 3 indicates and investment opportunity for Flying Airline
Company to increase the revenue without incurring extra expenses. The situation indicates
that no extra space charges needs to be conducted by the Flying Airline Company for
complying with the new special tourist charter flight. Adequate calculations are conducted in
the above table, which helps in identifying the profitability of $75,000 from operations if
Flying Airline Company chooses to comply with the special tourist charter flight. However,
the actual revenue that is generated from the operations is 110,000 which in this case is not
achievable by the company due to contractual obligations. The evaluation indicates that
profitability from the operations could be conducted if the organization accepts new charter
tourist flight proposal. The profits of $75,000 will be achieved by the company, which might

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in turn help in increasing its total revenue and profitability. In this context, Messner et al.
(2016) stated that with the help of revenue and cost evaluation organizations can detect actual
profits, which could be obtained from their operations.
Moreover, after accepting the proposal of new charter tourist flight the company
would lose revenue from cargo, which is an essential income source and had helps in
increasing profitability. However, the proposal could eventually help in strengthening the
bond between tourist company and flying a line company, which could help in building long
term professional relationship. Furthermore, the proposal is mainly accepted only if there is
space available to the flying airline company who can accommodate a charter plane and does
not have to increase its fixed cost. This decline in fixed cost has mainly allowed the company
to compensate for the additional income generated from cargo revenue (Otley 2016).
B) Identifying the viability of special tourist charter flight when no spare capacity is
present for the airline company:
Particulars Value
Passenger revenue $ 160,000.00
Total revenue $ 160,000.00
Variable expenses $ 85,000.00
Fixed cost $ 80,000.00
Total expenses $ 165,000.00
Loss $ (5,000.00)
The calculations conducted in the above table directly indicates the overall loss, which will
incur by the company if no space is available for the charter plane. The additional cost
incurred for the maintenance of charter plane would nullify all the profits from the proposal.

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This could eventually lead to a loss of $5,000, which might hamper financial position of
Flying Airline Company. Therefore, from the valuation it could be understood that if the
company does not have any extra space for the charter plane the overall proposal needs to be
rejected by the management. Renz (2016) stated that cost evaluation allows the management
to identify viability of any project, which could in turn help in supporting its revenue
generation capacity. Thus, it is advisable to Flying Airline Company that if there is no extra
space then rejecting the proposal is most viable option.