Management Accounting Research Trends

This assignment delves into contemporary research trends within the field of management accounting. It examines how management accounting is evolving to address societal concerns like sustainability, as well as its role in organizational change and performance. Key themes include the influence of emerging approaches like carbon management accounting and the importance of diverse perspectives in positivist research.

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

2MANAGEMENT ACCOUNTING
Table of Contents
Executive Summary.........................................................................................................................2
Assessment Task Part A..................................................................................................................3
Requirement a:.............................................................................................................................3
Requirement b:.............................................................................................................................5
Requirement c:.............................................................................................................................6
Assessment Task Part B...................................................................................................................7
Requirement a:.............................................................................................................................7
Requirement 2..................................................................................................................................8
Requirement 3................................................................................................................................13
Conclusion.....................................................................................................................................14
Reference List................................................................................................................................15

3MANAGEMENT ACCOUNTING
Executive Summary
Management accounting is one of the processes used for preparation of management
reports as well as accounts that render accurate and timely financial information in front of
managers so that they can undertake both short-term and long-term decisions. On the other
hand, Financial Accounting provides information to the financial users that help managers inside
the business enterprise with decision-making. The role of management accounting in business
enterprise helps in forecasting the future and make or buy decisions. Furthermore, management
accounting employs different tools for forecasting business trends that include financial
modeling, simulations, ratio analysis, Management Information System, Key Performance
Indicators, Game theory as well as balance scorecards and skills to analyze financial statements.
The tools as well as techniques used in the management accounting can be categorized
under certain heads. The current segment or study explains two methods of management
accounting and these methods are cost accounting as well as cash flow analysis.
Cost accounting help in calculating cost of goods sold, produced by using various tools as
well as techniques or methods. In the first assignment, the main purpose of the report is to
compute the overhead costs for calculating the production cost. In addition, there are different
techniques used in the assignment that help in allocating the overhead expenses to specific
product. After evaluating several techniques, it is found that Activity based costing help in
allocating overheads as well as determining the product cost in an accurate way. It is even
mentioned in the first assignment that there are different overheads that are allocated to the

4MANAGEMENT ACCOUNTING
product based on its benefits consumed from various related activities as shown in the Activity
based costing method.
As far as second assignment is concerned, it deals with explaining cash flow analysis as it
is treated as one of the significant tool used by the managers to understand the cash flows of any
business in an effective way. Cash flow analysis techniques had been used in the second
assignment for measuring the potentiality of a new plan.
Assessment Task Part A
Requirement a:
Activity
Activity
Cost Activity Driver
Annual
Quantit
y
Cost per
Unit of
Activity
Process Receivables $15,000 No. of Invoices 5000 $3.00
Process Payables $25,000
Nos. of Purchase
Orders 2500 $10.00
Program Production $28,000
Nos. of
Production
Schedule 1000 $28.00
Process Sales Order $40,000
Nos. of Sales
Order 4000 $10.00

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Dispatch Sales Order $30,000
Nos. of
Dispatches 2500 $12.00
Load Mixers $14,050 Nos. of Batches 1000 $14.05
Operate Mixers $45,900
Nos. of
Kilograms 200000 $0.23
Clean Mixers $6,900 Nos. of Trays 1000 $6.90
Move mixture to filling $3,450
Nos. of
Cakes/Pastries 200000 $0.02
Clean Trays $20,000 Nos. of Trays 16000 $1.25
Fill Trays $16,000
No. of
Cakes/Patries 800000 $0.02
Move to baking $8,000 No. of Trays 16000 $0.50
Set up Oven $50,000 No. of Batches 1000 $50.00
Bake Cake/Pastries $1,30,000 No. of Batches 1000 $130.00
Move to Packing $40,000 No. of Trays 16000 $2.50
Pack Cake/Pastries $80,000
No. of
Cakes/Patries 800000 $0.10
Inspect Patries $2,500 No. of Pastries 50000 $0.05

6MANAGEMENT ACCOUNTING
Requirement b:
Bill of Activities
Activity Consumed
Annual
Quantity of
Activity
Driver
Cost
per
Unit of
Activit
y
Total
Cost
Process Receivables 500 $3.00 $1,500.00
Process Payables 200 $10.00 $2,000.00
Program Production 100 $28.00 $2,800.00
Process Sales Order 400 $10.00 $4,000.00
Load Mixers 100 $14.05 $1,405.00
Operate Mixers 30000 $0.23 $6,885.00
Clean Mixers 100 $6.90 $690.00
Move mixture to filling 30000 $0.02 $517.50
Clean Trays 2000 $1.25 $2,500.00
Fill Trays 100000 $0.02 $2,000.00
Move to baking 2000 $0.50 $1,000.00
Set up Oven 100 $50.00 $5,000.00
Bake Cake/Pastries 100 $130.00 $13,000.0

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0
Move to Packing 2000 $2.50 $5,000.00
Pack Cake/Pastries 100000 $0.10
$10,000.0
0
Dispatch Sales Order 500 $12.00 $6,000.00
Develop & Test Product $600.00
Total Overhead Cost
$64,897.5
0
Annual Volume 100000
Cost per unit for
Lamington $0.65
Requirement c:
The above table shows overhead costs and these are the indirect cost that supports the
production process or in that case, distribution purposes (van Helden and Uddin 2016).
Furthermore, there are several direct costs that need to be mentioned in the case study but it was
not mentioned. Direct costs are the cost that attributed to the manufacturing of any rendered
goods or services. It is one of the significant elements used in production cost. It is where it is
not possible to manufacture the goods without incurring any associated cost (Van der Stede
2016). Therefore, in order to calculate product cost of Lamington, it is important to include direct
costs that are listed below:

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Direct Labor Costs
Direct Material Costs
Freight Inward charges

9MANAGEMENT ACCOUNTING
Assessment Task Part B
Requirement a:
From the given case study, it can be seen that HLW earn fees from two different sources
and these sources are annual membership fees as well as court fees (Taylor and Scapens 2016).
With that, more than 40% of the total revenue is generated in the form of annual membership for
a given period of 2 months. As far as the balance part is concerned, it is generated from the court
fees for each year annually (Soderstrom, Soderstrom and Stewart 2017). Furthermore, the cash
inflow from court fees does not remain even per month. During Peak season (that is October to
April), it is noted that the cash inflow from court feeds uses to be high that is more than 45% of
the total revenue. On the contrary, during the months May to September, it is noted that the
amount of court fees collected is very low as it covers only 15% of the total revenue (Solovida et
al. 2017).
In case where HLW implement new membership plan, it is important to collect 80% of
the total revenue within the first month of the accounting period. Addition to that, HLW can get
several benefits that are listed below with proper justification if they implement this new plan:
Implementation of new plan will benefit HLW in generating unrestricted cash flow from
general operating sources in form of annual one-time membership (Nuhu, Baird and
Appuhami 2016). As far as current plan is concerned, the club need to be dependent upon
individual programs like hourly court fees for earning more than 50% of the total revenue
Implementation of new plan will benefit HLW in preparing such platform that assist the
club for generating steady as well as cash flows every month (Modell 2014).

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Implementation of new plan will benefit HLW as club management can accumulate more
than 80% of the total revenue for initial months as per new plan rather than waiting for 6
complete months (Lopez-Valeiras, Gomez-Conde and Naranjo-Gil 2015). Therefore, the
benefits will help in planning for proper utilization of the accumulation fund as well as
taking different financial decisions as and when required.
Requirement 2
In the case study, several issues are highlighted and for that, certain assumptions needs to
be made for understanding the effect of new membership plan on the sales revenue (Lachmann,
Trapp and Trapp 2017). Some of the assumptions are mentioned below with proper justification:
Court usage is 100% during peak season
60% utilization of capability during non-prime time
40% court usage during off-season
Sales revenue under existing plan
Below, calculation is made for determining the effect and earned current sales by using
systematic method by determining the aforementioned assumptions
Annual membership revenue
Particulars
Weightag
e
No. of
Members
Annual
Membershi
p Fees
Total
Fees

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Total Members 100% 2000
Individual Members 25% 500 $45 $22,500
Student Members 25% 500 $30 $15,000
Family Members 50% 1000 $100
$1,00,00
0
Total Membership
Fees
$1,37,50
0
Total court fees
Particulars
Hourly
Court
fees
No of
Courts
No. of
Days Usage % Hours
Total
Fees
Peak Season- Prime
Time 8 10 181 100% 4 $57,920
Peak Season- Non Prime
Time 12 10 181 60% 8 $1,04,256
Off Season 6 10 184 40% 12 $52,992
Total Court Fees $2,15,168

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Total sales revenue earned
Particulars Amount Weightage
Membership Fees
$1,37,50
0 38.99%
Court Fees - Peak
Season
$1,62,17
6 45.99%
Court Fees - Off Season $52,992 15.03%
Total Fees Collected
$3,52,66
8 100%
Sales revenue under new membership plan
It is understood that the club would earn sales revenue as per the new membership plan as
mentioned in the below tables:
Revenue from early membership
Particulars
Curren
t
Membe
r
% of
Continuatio
n
% of
Active
Members
Annual
Fees
Total
Fees
Individual 500 70% 45% 250 $39,375

14MANAGEMENT ACCOUNTING
Student 500 70% 45% 250 $39,375
Family 1000 70% 45% 450
$1,41,75
0
Total Fees from Early
Membership
$2,20,50
0
Revenue from General Membership
Particulars
Curren
t
Membe
r
% of
Continuatio
n
% of
General
Members
Annual
Fees
Total
Fees
Individual 500 70% 55% 250 $48,125
Student 500 70% 55% 250 $48,125
Family 1000 70% 55% 450
$1,73,25
0
Total Fees from
Normal Membership
$2,69,50
0
Total Sales revenue collected

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Particulars Amount Weightage
Membership Collected:
August-September
$2,20,50
0 34.45%
October
$2,69,50
0 42.11%
March
$1,50,00
0 23.44%
Total Membership
$6,40,00
0 100.00%
Effect on sales revenue and cash flow
Below, effect on sales revenue and cash flow had been computed on the periodic sales
revenue.
Particulars
Current
Plan New Plan
Increase/
(Decrease)
Revenue:
Pre-Received (Aug-Sep) $0 $2,20,500 $2,20,500
October-April $2,99,67 $4,19,500 $1,19,824

16MANAGEMENT ACCOUNTING
6
May-September $52,992 0 -$52,992
Total Membership
$3,52,66
8 $6,40,000 $2,87,332
From the above table, it is noted that the sales revenue of HLW increases by $287332 if
they start implementing the new plan so that they get highest court usages in particular seasons.
This was done by calculating sales revenue under current plan (Klychova, Faskhutdinova and
Sadrieva 2014). Furthermore, it can be understood from the calculation that by using the new
plan, the club can easily collect lion share of the expected sales revenue for the month of
October.

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Requirement 3
It is important to understand the fact that sales revenue for the new plan is higher as
compared to previous one (Järvenpää et al. 2016). This is due to plenty of factors that need to be
dealt with at the time of implementing new plan. Some of the factors are listed below with proper
justification:
It is understood that the membership fees of the new plan is much higher as compared to
previous fees structure (Hopper and Bui 2016). Due to this, it is expected that there will
be loss of members after implementing the new plan. Addition to that, students who are
not financially independent may not afford higher fees as well as renewing the
membership for the new fees structure like courts without any additional fees.
Furthermore, after evaluating the outcome, it need to first analyze the feedback taken
from all the members. Therefore, the management needs to look at the expenses at the
time of collecting as well as analyzing the feedbacks (Gibassier and Schaltegger 2015).
By implementing new plan, the management will be able to collect all the fees for initial
two or three months where there will be no court fees. In that way, management can
reduce the cost of collecting court fees as well as preparation of periodic records for
earned revenue. Therefore, it is important to include such cost reduction at the time of
evaluation process (Cleary 2015).
Within a time span of 6 months, the management expects that they will lose some of the
members. The management need to implement new plan otherwise expected revenue
cannot be achieved (Bui and De Villiers 2017).

18MANAGEMENT ACCOUNTING
It is needed for the club to conduct special campaign in order to promote new plan.
Furthermore, the cost of promotional campaign needs to be included at the time of
calculating net income as well as cash flows while generating new plan.
Conclusion
At the end of the study, it is concluded that using Activity based costing is beneficial that
has been included from various business operations as properly included in the given case study.
Addition to that, Activity-based costing refers to the accurate cost of a business process that
focuses primarily on cause as well as effect relationship in the cost incurrence. However, this
technique is simple for better understanding as well as analyzing the incurred costs. Therefore, it
is important to state the fact that Activity based costing is advantageous as it assist business
owner for arriving at undertaking better decision-making process.
As far as second part of the assignment is concerned, cash flow analysis is utilized as it
assists the managers to undertake decisions on whether new plan is beneficial as compared to
older one. Therefore, the new plan can generate more cash for the business as compared to older
one as it is derived from the result of cash flow analysis.