Management Accounting Research Paper

This assignment requires students to delve into the field of management accounting research. It involves analyzing various aspects of management accounting, including its history, theoretical frameworks, and practical applications in different business contexts. Students are expected to critically evaluate existing literature and research findings, synthesize their understanding, and present a well-structured and insightful paper on the chosen topic within the realm of management accounting.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION ...................................................................................................................................................2
TASK 1 ....................................................................................................................................................................3
P1 Management accounting and its type.......................................................................................................3
P2 Methods used for management accounting..............................................................................................4
M1.................................................................................................................................................................6
D1..................................................................................................................................................................6
TASK 2.....................................................................................................................................................................7
P3 Applying marginal and absorption costs for cost analysis and income statement..................................7
M2...............................................................................................................................................................10
D2................................................................................................................................................................10
TASK 3 ..................................................................................................................................................................11
P4 Types of planning tool and there advantages and disadvantages..........................................................11
M3 ..............................................................................................................................................................12
D3................................................................................................................................................................12
M4...............................................................................................................................................................14
CONCLUSION......................................................................................................................................................14
REFERENCES.......................................................................................................................................................15

INTRODUCTION
Management accounting preparing and providing timely financial information to
make day to day decision related to the business management (Kaplan and Atkinson, 2015).
This system reports includes the detailed of accounts of the organization availability of cash
on hand, recent sales revenue, receivables and current state of the business accounts payables.
This system f accounting are deployed to provide the information that the business
management use in the better decision making and the goal is the capture the valuable data
that can be used in the manage and control of business operation and function. This report
based on Austin fresher company is consultancy company they give to advice, support and
deliver the services according to the customer demand. It is technical recruitment
organization that relate the engineering, it and life science field. This report contain includes
the management accounting methods that help in identifying, analysing and recording the
financial information can be used in the business entity. By using this information or data
they can do proper planning, make decision, and control on the all transaction of organisation
TASK 1
P1 . Management accounting and its type.
This accounting system manage the all data related to the all business activity can be
done in a manner. Management accounting involves the various types of methods as well as
concepts which using by the Austin Fraser and on the basis of that they can do the effective
planning and take the decision in a effective way. The company employees have a proper
control on the all activities by the evaluation as well as interpretation of performance. This
management accounting system provide the data by doing manage and take the right decision
which assist in achieving the goals and objectives.
Accounting system in a company are comprised of manual or systematic records of
the all financial transaction for the manages and recording, categorizing, and analysing for
timely manage the information (Macintosh and Quattrone, 2010). When the company
selecting the accounting system according the needs and capabilities of the organization.
There are different categories of this system and features are given below.
Managerial accounting system- The purpose of this system managers with
information to planning, controlling and managing the operations of the organization. Its

provide the information to the management needed to make the right and important decision
related to the business (Ward, 2012). This system includes the cost accounting system record
the actual involved in the delivering a products and services, comparing the standard and
planned cost and analysing the variance.
Inventory accounting system- This system are used in the planning and tracking the
inventory related to the business activities. This type system is a bar code tracking and each
inventory item are tagged by the different bar codes. This bar code system used to track and
accounts for the each item are moved around in the company.
Industry-specific accounting system- Accounting system involves application of the
industry specific. Its also includes the retail accounting system for example, has different
requirement of the different businesses in the market, The company sales are capture at the
point sales are using the computer based point of sale cash registered. This system make
properly report on the all transaction of the company.
Not for profit accounting system- This type accounting system has own specific of
reporting requirements for the business. For example, company funds must be tracked the
donation for the specific purpose.
There are several accounting systems which are related to the accounts of the business
entity activates. When the Austin Fraser using the system according the situation that can
help tot he employees become more successful to reducing the extra cost on the activities.
Traditional accounting allocates the indirect cost of the organization and they are service
providers on the basis of the volume which involves the number of the customers. Transfer
the pricing is a part of the accounting system which represent the price of the products and
services (Zimmerman and Yahya-Zadeh, 2011). This pricing is a type of price by which the
company can make division so that they can do appropriate transaction of the services.
Accounting is a principle based as well as simplified management accounting approach
which helps in increasing the managers so that they make the right decision to analysis the
data and information. These all system of the management accounting to help in the
managing, analysing and controlling the accounts of the business.
P2 Methods used for management accounting.
This analysis are use in small scale business. It helps Austin Fraser owner and
account officer to monitor the business performance and prepared accounting periods are

needed (Baldvinsdottir, Mitchell and Nørreklit, 2010). The report are depend on the type of
the project and time sensitivity of the data and information, and account officer may prepare
the report weekly, monthly and daily basis. There are many types of report are given below-
Budget report- The officer use this report to analyse the company performance and
the manager determine the department performance and control the cost. Officer and manager
can also use the this budget report to provide the incentive to the workers.
Job cost report- This report show the expense are use in the specific project. They are
usually match the estimate revenues that the organization evaluate the profitability for the
job. This report help in improving and identifying the higher earning areas in the company so
the at the manager focus on the on its efforts.
There are some methods are used in the management accounting reporting-
Financial planning- this planning help in the organization is maximization in the
profit. Financial planning is plan for the achieving the goals and objective of the company.
Statements analysis- This type of analysis through the profit and loss account and
balance sheet that is prepared for different period. This analysis is done by the comparative
financial statements, ration identified, and common size statements of the company.
Cost accounting- This accounts present the cost data of the product, process,
department, and services wise. Its includes the marginal cost and incremental, standard
costing use by the organization to solve the cost accounting problem.
Standard costing- this type of costing add the advantages of achieve the greater
degree of the cost consciousness with the business (Lukka and Modell, 2010). The standard
costing of Austin Fraser is been predetermined cost it can help in measuring the actual
performance of the company.
Marginal costing- This type of report are used to improve standard price by studying
the sales mix and having maximum use of resources, taking the right decision and accept and
reject the bulk orders and this technique based on the fixed, variable and contribution costs.
Decision making accounting- This tool help in the business to take the right decision
and to choose the best profitable alternative (Weißenberger and Angelkort, 2011). To select
the alternative to compared the relevant cost and thus the accounting information are used
help in the solve the business problem to reducing the complexity.

Management information system- The flow of the communication within the Austin
Fraser should be done to function there business effectively, the management of the company
should design the system so that every employee of the organisation can assess the
information which is been design.
Statical techniques- There are various types of statical techniques us the by the
company used to reducing and removing the management problems. Under this technique
there are many methods like least square and quality control.
Management reporting- The account officer prepare a report on the account of profit
and loss and financial statement of firm and give it to the top management of company. This
report includes the strength and weakness in the indifferent areas of the financial and
operating activities.
Budgetary control- This method is use to control the financial performance of the
business concern, the business operation are been directed in a desired directions with are
been set.
M1
There are some benefits of accounting system-
Increase efficiency- This system help in the improving the operation of the
organization. Every activity is done in a systematic manner to evaluate and comparing the
performance (Cinquini and Tenucci, 2010).
Profitability maximization- A company using the accounting for budgetary control
and use capital budget tools that the office educe the operating and capital expenditures.
Simplify the Financial Statements- Company take the different decision that this
system provide the technical report with the interpretation the facts of the statements and the
officer understand the financial statements to use in the business progress.
D1
According to Luft and Shields, (2010), it has been observed that Austion Fraser a
consultancy organisation is in need of appropriate management system which can help the
firm to reduce there cost of product and services. Further, management accounting helps
company to attain there aims and goal by measuring its performance in market and evaluating
it. (Fullerton, Kennedy and Widener, 2013). Cash flow of company can also increase with

proper management activity. Organisation having proper accounting system help them in
competitive world by succeeding in achieving there target and success
TASK 2
P3 Applying marginal and absorption costs for cost analysis and income statement.
Company employ various types costing methods which help in finding the net profit
of the business operations. There are two types of methods are as follows-
Absorption costing- This method by using simple direct and indirect expenses try to
calculate merchandise cost as well as organization which are further taken into the accounts.
The of this method to calculate the cost of the products and services and also includes the all
expenses of the Austin Fraser related to the providing the service employees (Scapens and
Bromwich, 2010). In this direct cost of any goods and services can easily identify by the
officer. On the other hand the direct cost can not be calculated and identified.
Fixed cost of a month-
Production overhead-
Budget cost = £1,800
Actual cost =£2,000
Administration Cost-
Budget cost = £800
Actual cost = £700
Selling cost-
Budget cost = £400
Actual cost = £600

Marginal costing- This costing is a change opportunity cost which assist in arising
the quality to be produce and incremented by the one unit (Soin and Collier, 2013). This cost
was put into the each level of the production which includes the extra cost that is required to
to produce the next unit. To calculate this cost use the formula are as follow-
Marginal costing= Changes in consumption/ Change in quality of the products
The marginal cost of the every product is high than the situation for producing the
merchandise is best for the organization.

M2
Austin Fraser use the management function as well as use the techniques so that they
can do effective operation activities. The organization less than 50 employees are working on
turnover is £500,000. That the business use the different instruments are-
Analysis of cost volume profit- Under this analysis is done by the officer of the Austin
Fraser it can be determine the changes in the cost and the its volume that affected by the
operating new income (Ferreira, Moulang and Hendro, 2010). PV ration can be find out by
using the formula which is total contribution divided by sales that is-
= contribution /sales x 100
= 10800/21000 x 100
= 51.42%
Absorption costing- By using this technique it has been interpreted by the employees
having a over absorption of the expenditure and they relate to the fixed production cost is 200
and gross profit is 9800.
D2
Austin Fraser present the information or data in systematic manner is to assist in
making right decision for doing the investment. Its provide the some description of the
financial position of the Austin Fraser that the investors analysis the capabilities of the
company. According to the Marginal cost, net profit is 7500 along with the contribution
which is 10800. Moreover, net profit by absorption costing is 6700. So, by this it can be
analysed that by using both the methods of costing new profit is different.

TASK 3
P4 Types of planning tool and there advantages and disadvantages.
Austin Fraser use the budgetary control that the officer to utilize the budget so that
they can monitor ans control the operation and cost in the accounting period (Vasile and Man,
2012). Budgetary control use by the account officer of the Austin Fraser to set the financial
goals and objectives by make the appropriate budget. The company compare actual outcome
and adjustment the performance in needed in which area. Make a proper budget help to the
manger of the Austin Fraser to managing and coordinating the available resources. With this
budget help to define the standard are needed to control the system and also help in the
provided the instruction and guidance so that the employees proper use the available
resources. This budget help to fulfil the customer expectation to the company goods and
services and evaluating the manager performance.
There are various type of budget to help in planning for budgetary control-
Master budget- This budget is a comprehensive projection which help in managing
the different activities of the operation so that the officer conduct the all aspects of the
organization over budget period. Its also includes the summary of the project activity of cash
budget, income budgeted statement and budgeted balance sheet of the company.
Operational budget- Austin Fraser create this type of budget to cover the revenues and
expenses so that they can maintain day to day activities of the organization. Officer of the
company have to compare the all outcomes to make the proper budget by doing the planning
and adjustment of the all revenues.
Cash flow budget- Company use this budget to determine the cash inflow and outflow
on the daily basis transaction (Grafton, Lillis and Mahama, 2011). They have maintain the all
records of the expenses and sales so that the employees can not face the any problem relate to
the financial and maintaining cash by the availability of the resources.
Advantages-
 These all provide the support to the management accounting to manage the all
strategies use in the activities of the operations of the company.
 Use these budgets doing a proper communication between the facts and figures that
are affect on the operation and financial activities of the Austin Fraser.

 Its help in the increasing the performance of the workers to improving the company
profitability.
 Use the proper planning system by the employees of the Austin Fraser to getting the
right information and data to analysis and achieve the target.
Disadvantages-
 This planning tool create the pressure on the workers of the organization because this
budgets give the timeline to achieve the target (Qian, Burritt and Monroe, 2011).
 The officer of the company use and allocate the resources in sometime to create the
conflict among in the different departments.
 All the budget which involves the high cost and they are prepared by the officer of the
Austin Fraser.
M3
There are various uses of planning tolls in the budgets these tools provide the proper
planning and support to the manage the all strategies use in the activities of the operations of
the company. Its create the plan for increasing the performance of the workers to improving
the company profitability. Use the proper planning system by the employees of the Austin
Fraser to getting the right information and data to analysis and achieve the target.
D3
Austin Fraser is a small company have the 50 employees and the turnover of the
Organization is £500,000. The company officer and manger manage the proper activities,
than the manager record the all information and data that they use in a systematic manner to
easily identify at the time needed. Recoding the data and information use in the financial
techniques that includes the analysis the ratio. Company manage the cost of the services and
products that they provide to the customer to generating the maximum revenues. Austin
Fraser workers use the appropriate management methods so the company employees are not
face the any obstacles and they can easily achieve the financial target.
TASK 4
P5 Comparison of two organisation of their management accounting system so that they
respond to the financial problems.

Management accounting system use by the company to solving the financial and non
financial issues in the business (Jansen, 2011). This system help to give the instruction to the
Austin Fraser to solve the problems and manage the complex situation to face by the
employees. The accounting system help to the organization in achieve the efficiency in the
operations and activities of the business.
Comparison of the two organizations is given below that how they adopting this system to
solve the problem-
Austin Fraser-
 It is small consultancy company to give the advice, support and deliver the services
according to the customer demand. This company use this technique to identify the
future affairs and decide the amount to be invested.
 Company use this tool to compare the actual and standard performance of the services
providers.
 Austin Fraser use this method in order to determine the financial requirement in the
business operations and the activities.
Unicorn Grocery-
 Unicorn grocery is cooperative store that provide the household, body care and
general grocery items. The company use the management accounting system to decide
the prices to be invested in the various activities and operations.
 This system help to the organization manager to knowing the exact amount of the all
activities to get the successful outcomes.
 Unicorn grocery use this technique to improve the employees performance as well as
increase the effectiveness of the all operations of the business.
Austin Fraser use the management accounting system to identifying the problem and
use the appropriate solution to solve the problem. This accounting system help to the
organization to achieving the successful outcomes and improving the performance in the
various department of the company. Its create a coordination between the different
departments with the systematic implementation the system of the management accounting.
Account officer of the Austin Fraser use the management accounting for the proper
implementation of the all activities and resolve ant query or issue reagarding the financial
situation of company.

M4
Sustainable development means the achieving the success with the proper emphasis
on all the factors including in the human factors. It is difficult for the Austin Fraser to achieve
the development without getting the emphasis on the need of the workers (Li, Nan and Mo,
2010). This accounting system give the attention to this factors to getting the best result and
the all efforts of the mangers for satisfy the needs of the employees to getting the successful
outcome. Management accounting system to help the organization to determine the activities
to perform by the workers and know the credit policy of the company and if any remedial
action is required the management does to take right decision to improving the probability in
the business operations.
CONCLUSION
On the basis of this report to analysis and observe the management accounting help in
the Austin Fraser to manage the all financial planning and coordination between all functions.
In this report to identifying the different methods to manage the all statements of the
financial. Determine the different types of the appropriate techniques use in the calculation
the cost of the all business operations. Its also identifying the different types of planning tools
to help in the planning of the budgetary control and the identifying the advantages and
disadvantages of the all budgeting tools. Under this report identify the how the company
adapting the management accounting system to solve the problems.

REFERENCES
Books and journals
Baldvinsdottir, G., Mitchell, F. and Nørreklit, H., 2010. Issues in the relationship between
theory and practice in management accounting. Management Accounting
Research. 21(2). pp.79-82.
Cinquini, L. and Tenucci, A., 2010. Strategic management accounting and business strategy:
a loose coupling?. Journal of Accounting & organizational change. 6(2). pp.228-
259.
Ferreira, A., Moulang, C. and Hendro, B., 2010. Environmental management accounting and
innovation: an exploratory analysis. Accounting, Auditing & Accountability
Journal. 23(7). pp.920-948.
Fullerton, R.R., Kennedy, F.A. and Widener, S.K., 2013. Management accounting and
control practices in a lean manufacturing environment. Accounting, Organizations
and Society. 38(1). pp.50-71.
Grafton, J., Lillis, A.M. and Mahama, H., 2011. Mixed methods research in
accounting. Qualitative Research in Accounting & Management. 8(1). pp.5-21.
Jansen, E.P., 2011. The effect of leadership style on the information receivers’ reaction to
management accounting change. Management Accounting Research. 22(2). pp.105-
124.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Li, W., Nan, X. and Mo, Z., 2010, August. Effects of budgetary goal characteristics on
managerial attitudes and performance. In Management and Service Science (MASS).
2010 International Conference on (pp. 1-5). IEEE.
Lukka, K. and Modell, S., 2010. Validation in interpretive management accounting
research. Accounting, Organizations and Society. 35(4). pp.462-477.
Macintosh, N.B. and Quattrone, P., 2010. Management accounting and control systems: An
organizational and sociological approach. John Wiley & Sons.
Qian, W., Burritt, R. and Monroe, G., 2011. Environmental management accounting in local
government: A case of waste management. Accounting, Auditing & Accountability
Journal. 24(1). pp.93-128.
Scapens, R.W. and Bromwich, M., 2010. Management accounting research: 20 years on.
Soin, K. and Collier, P., 2013. Risk and risk management in management accounting and
control.
Vasile, E. and Man, M., 2012. Current dimension of environmental management
accounting. Procedia-Social and Behavioral Sciences. 62. pp.566-570.
Ward, K., 2012. Strategic management accounting. Routledge.
Weißenberger, B.E. and Angelkort, H., 2011. Integration of financial and management
accounting systems: The mediating influence of a consistent financial language on
controllership effectiveness. Management Accounting Research. 22(3). pp.160-180.
Zimmerman, J.L. and Yahya-Zadeh, M., 2011. Accounting for decision making and
control. Issues in Accounting Education. 26(1). pp.258-259.
ONLINE

management accounting. 2017. [Online]. Available through.
<http://www.businessdictionary.com/definition/management-accounting.html>. [Assessed on
27th May 2017].
What is management accounts and its importance. 2016. [Online]. Available through.
<https://www.invensis.net/blog/finance-and-accounting/what-is-management-accounting-
and-its-importance/>. [Assessed on 27th May 2017].