Management Accounting Project

This project report examines the use of management accounting principles within Jupiter Plc, a UK fund management company. It explores various accounting systems, reporting methods, costing techniques, and planning tools used for budgetary control. The report also analyzes financial issues faced by Jupiter Plc and evaluates the effectiveness of different approaches to address them.

Management Accounting

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
Concepts and types of management accounting with their essential requirements.....................1
Various types of management accounting reporting system......................................................2
Benefits of various types of management accounting system....................................................3
Evaluation of the both accounting system and reporting and their integration...........................4
TASK 2............................................................................................................................................4
P3: Costing methods used to compute net profit ........................................................................4
TASK 3............................................................................................................................................4
Advantage and disadvantage of planning tools used for controlling budgets.............................4
Analysis of the use of planning tools and their use.....................................................................5
TASK 4............................................................................................................................................6
Comparison with other organisation to use accounting system for reducing financial issues ...6
Analysis of various ways to respond to financial problem..........................................................6
Evaluating planning tools for accounting respond for resolving issues .....................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management accounting enables that a business to be conducted with the motive of
earning maximum profit with the help of available resources. It is an important tools and
techniques that can provide accounting to carry out all management activities such as recording
of financial transaction into their respective format (Abdel-Kader, 2011). To better understand
the concept of Management accounting Jupiter Plc has been selected.
This project report aimed at providing specific information about the use of various types
of accounting system as well as reporting method used by the company in their business
operations. Apart from this, use of costing techniques in calculating net profitability is also be
discussed under this report. Along with that advantage and disadvantage of using planning tools
those are used in budgetary control are mentioned below. Comparison with other organisation
regarding use of management accounting system in controlling financial issues are taken into
account effectively.
TASK 1
Concepts and types of management accounting with their essential requirements
In the current scenario, it has been seen that maximum number of business organisation
are having problem in arranging their resources and to formulate various financial statements. It
can only be resolve through using effective accounting system that can help the mangers in
recording, summering, communicating and evaluating various transaction that are done by the
company during the period of time.
Definition: Management accounting is said to be specific provision of data that are
needed by management for such purpose as designing policies, planning and controlling the
activities within the Jupiter Plc.
There are various types of management accounting system that can be used by Jupiter in
evaluating the financial data in systematic manner. Some of them are mentioned below:
Cost accounting system: It refers as one of the crucial method of accounting in which all
the cost associated with performing any procedure, project or products are noted or recorded
with their respective format. It can assist an organisation in taking specific strategic decision in
respect to the company growth and sustainability. Financial accountant makes use of various
techniques that can help Jupiter plc cost effective in near future time. It is inefficiencies of

essential improvement to control cost those are incurred on the production process. There is
certain cost which are needed to be taken into account such as normal, standard and actual cost.
Inventory management system: It is said to be valuation of non-capitalised inventory
items. The best part of this system is that it is basically related with important part of supply
chain management (Bouten and Hoozée, 2013). The manager can supervise the flow of products
from the producers to warehouse and from these services to the point of sale. It is combination as
well as maintenance of carried items, whether those goods sufficient enough for the company in
future planning process. There is various specific system that are useful for an organisation such
as Jupiter in recording various data such as LIFO, AVCO and FIFO.
Price optimisation system: This seems to be one of the vital types of management
accounting system that can be useful in numerical analysis of an organisation that can determine
perception of customers those are respond to various prices for their product and services with
the used of different channels. It can further be used to examine the prices that a company will be
best suitable fit in attaining overall objectives in increasing operating profit for Jupiter plc during
the period of time. This can be used to tailor pricing for customer segments through simulating
about targeted client that can respond to price modification with the give customer demand.
Job costing system: It is one of the most effective costing system that is assign to an
individual product or batch of items. Basically, the job order costing system is utilised only when
the products produced are sufficiently separate from one another. Jupiter plc need to determine
its total cost which is incurred on the production of each job.
Various types of management accounting reporting system
It has been seen that a management reporting system is an essential part of management
control system that can provide Jupiter company information about their current and past
position. This information can be in the form of reports as well as statements. The common
purpose of the financial reports is to provide information regarding the outcomes of the
operation, financial position and cash flow position of Jupiter. This data can be utilised through
the readers of financial reports to make decisions in relation to the allocation of resources. There
are various sources of data collection that can be used by Jupiter to evaluate the performance of
the company. There are certain reporting systems which are mentioned below:
Performance report: It is a crucial activity in the project communication management in
Jupiter plc. It consists of collecting and disseminating project data and communicating project

growth, allocation of resources and estimating the future progress and various stakeholders as per
the decided in the overall communication management plan. Jupiter plc can prepare this
particular report by taking information about the past and present year financial data.
Inventory management report: It is said to be overall summary that belonging to
overall business such as Jupiter plc. It would provide comprehensive account of the inventory or
supply of different products. It is good stock report would always need to be clear and simple to
understand for each other. This seem to be most valuable report that can be made by the
accountant to record opening as well as closing information about the stock that are recorded into
their respective format.
Account receivable report: It is basically considered as that report which is prepared by
the accountant in order to determine the lists of unpaid customer invoices and unused credit
memos. This reports are considered as primary tool through which collection of personnel can be
examine to allow them for making the payment of overdue amount. This technique can be more
reliable for Jupiter plc for evaluating the credit balance requirements in the account allowance
for doubtful accounts. It would take place through sorting a company’s account receivables as
per the dates of these unpaid invoices. Jupiter plc can be easily help in analysing total amount
which is due from their debtors (Chenhall and Moers, 2015).
Job cost report: This particular report is basically done in order to record all those cost
that are incurred during the period of time manufacturing process. It is the starting place that is
much associated with the data contained in other report. This particular list of each job are
working on and specific lists of total cost generated on the particular job as compare to last year
are analyse through this report.
Benefits of various types of management accounting system
From the above mentioned points, it has been clearly analysed that there are various types
of accounting system that are eventually valuable for Jupiter plc in their daily business
operations. Such as cost accounting system which is useful for the company in analysing total
cost they are incurring on the overall production process. Inventory management system can help
them in examine total investment made on the stock that are ordered by Jupiter plc during the
time. Similarly, price optimisation is an essential system that can be valuable for analysing
overall perception of the customer towards the product price offer by the company.

Evaluation of the both accounting system and reporting and their integration
According to the above mentioned different reports and system, it has been found that
there is direct link among each other. It is valuable for Jupiter plc that can assist in evaluating the
overall performance of an organisation. With the help of system company can analyse the flow
of information related with the cost and inventory in an organisation. While, on the basis of the
reporting all the collected information are summarises to present in front of the investors to make
their personal investments decision in the company project plan.
TASK 2
P3: Costing methods used to compute net profit
Cost is one of the primary tools that can help an organisation such as Jupiter plc to analyse
the amount they are investing on the production of product and services within an organisation.
There are various types of cost that are incurred in manufacturing process such as fixed, variable
and semi-variable cost for the company. Some of the costing method that is used to calculate the
net profit for the company are mentioned below:
Absorption costing: It is said to be that costing method which consists of variable and
fixed at the time of production process. It also called as full costing system because of the nature
the operations. It is not considered that much effective in overall decision making for Jupiter plc.
Marginal Costing: These types of cost are defined as the additional cost that is required
to produce an extra unit of output. In general, it has been defined as the increase or decrease in
the total cost of a production that help to make one additional unit of an product. Marginal costs
are variable costs including of material and labour costs that also includes an additional unit of
fixed cost.

TASK 3
Advantage and disadvantage of planning tools used for controlling budgets
Budget: It is one of valuable planned estimation that has been made by Jupiter plc for the
purpose of analysing total cost or expenses they are going to incurred on the production of
product and other services (Budgetary Control, 2017). There are various kind of budget that are

needed to be taken into account for the company to record their specific information before
manufacturing process. There are certain planning tools that can assist an organisation in overall
controlling of budgets that are prepared by Jupiter plc during the period of time. some of them
are mentioned below:
Forecasting tools: It is basically associated with the upcoming risks those are made by
Jupiter plc during the period of time. This can assist the company to control their sales and
manufacturing associated budgets that are prepared on overall predication.
Advantage: It has been seen that because of qualitative nature, the all strength of previous
data can be prepared by Jupiter plc during the period of time to control the business risk.
Disadvantage: In certain situation, forecasting methods can be analysing the interest rate
that give rise, while another can influence on the rates which will be hold steady for the period of
time.
Scenario tool: It happens to be specific toll that is specifically related with the method that
can be used to deal with certain critical situations those are occurs during the period of time. It is
having large influence on the use of classical methods.
Advantage: This primary reason behind this is to determine proper thinking in according
to best possible approximation that can be minimise the burden on the manager which can
effectively in coming period of time.
Disadvantage: It can estimate, the manager to face various problem that are beyond the
control of an individual can sometime create serious concern for an organisation.
Contingency tools: It is said to be more effective planning that is associated with every
results other than in basic situation. These types of planning tools are used to control all business
risks those are arises uncertainly.
Advantage: The primary aspects of these techniques is more crucial for facing every sort
of unethical problems that can assist in gaining competitive advantage in coming period of time.
Disadvantage: This has been chances of getting rid of all business risks those are
associated with an organisation or that can take maximum impacts on the overall performance of
the company.
Analysis of the use of planning tools and their use
According to the above mentioned various types of planning tools, it has been examining
that all of them are equally helpful for earning sufficient amount of profitability by controlling

the budgets of the company. By the help of forecasting tools can easily be able to determine their
upcoming issues those are affecting the operation on regular interval. While contingency tools
are more beneficial for analysing all business risks that are related with Jupiter plc in coming
period of time. It has been found that there are specific kind of risk that can affect the overall
growth and efficiency at the time of production process whose entire influence is been seen on
reputation of the company (Hilton and Platt, 2013).
TASK 4
Comparison with other organisation to use accounting system for reducing financial issues
In accordance to Jupiter plc or any other business organisation they need to face certain
financial issues those are related with various department. Some of them are HR, finance and
marketing department. By taking all the relevant facts, financial problem can lead to huge
reduction in the overall performance and sustainability of an organisation. As, the company
would not have been able to deal with their business effectively in the absence of finance for
longer period of time. There are various kind of problems those are affecting the entire growth of
Jupiter plc up to a definite position. Some of the crucial problem that are faced by various
organisation are mentioned below:
Jupiter plc HSBC
Jupiter plc is a UK fund management company
,managing equity and bond investment for
investors, is facing price related issues such as
customers are not satisfied with different prices
for its product and services. For solving this
issue Jupiter plc should follow price
optimisation system. It helps to minimise cost
and maximise business value in order to
maintain profitability situation.
HSBC is a British multinational banking and
financial services holding company, dealing in
credit cards, NRI services, loans, mortgages
etc. This company is facing loss of money or
customers in their business that involves fixed
and flexible cost. For solving this issue HSBC
need to follow Cost accounting system that
helps to ascertain cost, fixation of selling
price, proper records and management of cost
data for assuring efficiency (Klychova,
Faskhutdinova and Sadrieva, 2014).

Analysis of various ways to respond to financial problem
It has been seen that management accounting can be more useful to examine specific key
variable in a given period of time. The key variables would bring financial issues in case it is not
deal on right point of time. Sensitivity analysis is the specific techniques that can be used as
independent variables value in which all the impacts are seen on dependent variable as per the
given assumptions. Simulation techniques can be used to analyse the capital budget risk. It is
done to determine probability portfolio in relation of standard of getting valuable advantage
during the period of time.
Evaluating planning tools for accounting respond for resolving issues
It has been found that it is mostly related with the financial issues those are resolve through
using effective use of financial tools. In case of Jupiter plc, it can lead to sustainable success in
case they used to make use of right tools to resolve their financial problems. All the above
mentioned planning tools such as forecasting are valuable for evaluating the estimated risks that
can impact the overall performance of Jupiter plc during the period of time. Basically,
contingency planning tools can be useful in controlling the business risk that are creating
maximum impacts on the overall sustainability of the company (Merchant, 2012).
CONCLUSION
From the above project report, it has been articulated that management accounting is more
crucial aspects for an organisation. It can be assist manager to record their transaction with the
assistance of using right system. In this process, financial manager need to use different types of
accounting system and reporting. Further, this can conclude specific costing method to compare
total net gain. Merits and demerit of using planning tools can be used to control the budget to
attain their overall aims of the company. It has been examining that certain issues those are arises
within an organisation are related with the financial are resolve through using management
accounting system.

REFERENCES
Books and Journals
Abdel-Kader, M. G. ed., 2011. Review of management accounting research. Springer.
Bouten, L. and Hoozée, S., 2013. On the interplay between environmental reporting and
management accounting change. Management Accounting Research. 24(4). pp.333-348.
Chenhall, R. H. and Moers, F., 2015. The role of innovation in the evolution of management
accounting and its integration into management control. Accounting, Organizations and
Society. 47. pp.1-13.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Klychova, G. S., Faskhutdinova, М. S. and Sadrieva, E. R., 2014. Budget efficiency for cost
control purposes in management accounting system. Mediterranean journal of social
sciences. 5(24). p.79.
Merchant, K. A., 2012. Making management accounting research more useful. Pacific
Accounting Review. 24(3). pp.334-356.
Online
Budgetary Control. 2017.[Online]. Available through:
<http://www.myaccountingcourse.com/accounting-dictionary/budgetary-control>.