Research on Management Accounting

This assignment provides an extensive list of research papers and articles related to management accounting. The sources include books, journals, and online resources that cover various aspects of management accounting, such as performance measurement, budgeting, job costing systems, planning tools, and more. The research papers and articles are from reputable publishers like Routledge, CRC Press, and Taylor & Francis, and provide in-depth analysis and insights on the topic.

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1 .................................................................................................................................1
PART A.......................................................................................................................................1
P1. Management accounting with its systems.............................................................................1
P2. Methods for management accounting reporting....................................................................3
M1. Benefits of management accounting system........................................................................4
D1. Integration of management accounting systems as well as reporting with organisational
processes......................................................................................................................................5
PART B........................................................................................................................................6
P3. Calculation of costs and preparation of income statements...................................................6
M2. Application of management accounting techniques...........................................................10
D2. Interpretation of data...........................................................................................................11
ACTIVITY 2..................................................................................................................................11
Part A.........................................................................................................................................11
P4. Planning tools for budgetary control...................................................................................11
M3. Uses with application of tools so to forecast budgets........................................................13
PART B......................................................................................................................................15
P5. Comparison of ways in which management accounting systems are adopted to respond
financial problems......................................................................................................................15
M4. Analyses of ways management accounting helps in resolving financial problems...........17
D3. Evaluation of the ways planning tools respond appropriately to solve financial problems
as to lead sustainable success.....................................................................................................17
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................19

INTRODUCTION
Management accounting is a concept which makes a proper use of financial and non-
financial data to translate it into meaningful information that facilitates decision making of
managers of organisations (Bandy, 2014). It involves methods as well as techniques which plays
necessary aspects while planning business actions and controlling performances. It enables
administrators to minimise losses together with maximising profits. Using statistical devices such
as graphs, charts or diagrams, management accounting presents as well as interprets financial
information in numerical terms. To develop knowledge about management accounting,
Renishaw Plc is selected which is one of the top engineering firm having headquarters at
Wotton-Under-Edge, UK. The entity is popular for its coordinate measuring machines addition
to machine tool products.
This report includes concepts such as management accounting systems, reporting
mechanisms and costing techniques that are further used in producing management reports. It
also comprises planning tools with their benefits and shortcomings for budgetary control. In
addition, financial problems are discussed that are resolved using systems and appropriate
accounting approach so that business can lead sustainable success.
ACTIVITY 1
PART A
P1. Management accounting with its systems.
Management accounting: Management accounting is aforementioned to procedures of
identifying, measuring, gathering, preparing, explaining and spreading information to assist
managing directors while decision making in context to fulfilling organisational goals. It is
categorised as input measurement basis, cost accumulation methods, inventory cost flows,
inventory valuation techniques as well as cost flow assumption. It also benefits in planning
ahead, analysing and controlling business performances so to work on the path of ongoing
improvements. In relevance to Renishaw Plc, it is used to measure revenues, assets as well as
costs (Berry, Broadbent and Otley, 2016). It aids towards selecting appropriate alternative in
decision making. It comprises certain accounting systems that are discussed as:
Cost accounting system: While estimating product costs, preferred framework is cost
accounting system. It benefits in making evaluations for inventory valuation in accordance with
1

controlling costs. Accurate cost estimation is fundamental for profitable operations. In addition,
this system is also essentially required at Renishaw Plc to ascertain appropriate product costs as
well as estimating material inventory during closing duration, work in progress addition to
inventory of finished commodities so that financial statements can be prepared. Further, the
system is essentially required to identify distinct costs, eliminating associated unit costs so to
increase revenues addition to building effective strategies for future related functions. This
system is typically classified as product and process costing in which product costing is used to
ascertain cost involved in a product and process costing is essential to estimate cost of a whole
process depending upon the manufacturing model of organisation.
Inventory management system: Monitoring addition to maintaining stocked products
requires inventory management system (Bovens, Goodin and Schillemans, 2014). It is a system
that helps in identification of inventory items together with associated information through asset
tags and barcode labels. Its categories are Stock Review, LIFO, Just In Time, FIFO and ABC
Analysis. At Renishaw Plc, the system is used for carefully maintaining stock level and for this
separate warehouses are designed where centralised records associated with inventory are
recorded with other information. Essential requirements of the system at Renishaw is to track
stocks and categorising materials so to deliver inventory at production units at right time such
that delays are eliminated in working.It provides appropriate information to mangers about
location of items, specifications, totality of items held as stock and details about vendor or
supplier. In addition, with this system, documents related to work order, material bills as well as
many more are systematically recorded and provided to top authorities for taking future
inventory decisions.
Price optimising system: Calculating perceptions or demand during changes in product
and combining data with costs as well as inventory levels as to make changes in prices is only
done through price optimising system. The system begins with customer segmentation and ends
with setting new prices as per customer responses. It is primarily preferred by companies to tailor
prices accordance with customer segments and stimulating the ways targeted audiences responds
towards altered prices (Taylor & Francis, Suomala and Lyly-Yrjänäinen, 2012). Marketers of
Renishaw Plc makes analysis of certain demand impacts in relevance to price changes of wide
machines including motion control, spectroscopy and measurement products. Managers with
price optimisation system usually modifies their pricing to segment customers and analysing the
2

ways in which targeted audiences will give responses to modified prices. The system is
essentially required so that pricing structure is optimised for initial pricing, mark down pricing
together with promotional pricing. In addition, the system is used to mould pricing structures in
distinct scenario.
Job costing system: Accumulating production costs and assigning them to individual
output of particular job is done with job costing system. The system primarily accumulates
manufacturing costs linked with each job in separate manner. When organisation manufactures
wide range of items and all have significant differences addition to significant costs, appropriate
system used is job costing system (Job costing system. 2016). Renishaw Plc adopts the system to
produce products as per specific client orders. Product costs are tracked with associated job and
rendered services. The system is usually opted by entity so to manufacture products on special
orders. The system is essentially required to reduce risks, track costs, improving controlling
methods so that chances of profits are enhanced in appropriate manner.
Thus, management of Renishaw Plc adopts all the systems as per the necessities such as
inventory management system for tracking available and required inventory or stocked goods,
price optimising system to optimise product prices as per customer perceptions and cost
accounting system to estimate appropriate product costs.
P2. Methods for management accounting reporting
Management accounting reporting: A framework to provide information in written
manner including facts and figures. Accounting reports are produced as per the business
requirements such as to evaluate performance or forecasting budgets. Management Accounting
reports plays important function to make decisions for existing or upcoming period. With the
reports, managers of Renishaw Plc acknowledge improvement areas in order to accomplish high
outcomes. Some methods which are widely used for accounting reports are the followings:
Account receivable report: It list out information about credit memos addition to unpaid
customer invoices. It helps in determining allowances together with doubtful accounts as
accountants tabulates information about receivable accounts and to cater aspects of discount to
pursuant clients. As Renishaw Plc relies on extending credit so they break down balances that are
due of clients into peculiar time in order to determine defaulters. This report benefits institutions
to regular contact with clients in order to realise them that no acceptance is given to late
payments. As large entities are not able to make recognition of each credit sale, they prepare
3

such report to analyse circumstances due to which company is facing issues in collection
procedures.
Budget report: To determine expenditure levels with revenues, preferences are given to
budget report as it helps in taking appropriate action to bring expenditures on track accordance
with budgeted amount. Proper management of budget reports helps an entity in planning
orientation, evaluation performances, reviewing profits, allocation cash and reviewing
assumptions in accurate manner. Monitoring, analysis, recording and controlling expenses of
various products such as healthcare addition to spectroscopy with effective techniques,
management of Renishaw Plc uses budgetary report (Boyns, Edwards and Nikitin, 2013). At
such company, the report is designed to compare the closeness of budgeted performance with
that of actual one in accounting period. Future estimates are made through the past budget report
so that organisation can function towards profitability by forecasting circumstances and facing
them appropriately.
Performance reports: It is linked with business performance and that of its employees in
certain time period. It helps in strengthening knowledge about predicted performance level in
terms of sale together income. Management team of Renishaw Plc by using the report makes
strategic decisions that can define sustainable future. Other than this, individual performances are
closely monitored to award the commitments of high performers. It also avails deep insight about
functions or operations of enterprise. Performance reports are vital as they keep correct measures
of organisational strategies, plans or policies towards mission.
Inventory management report: For categorising inventories in distinct types and
keeping proper record, inventory management report is prepared so to get accurate picture of
actual stock within organisation. Analysing the report, decisions for further inventory are taken.
Entities that properly manages inventory report are likely to increase information transparency,
lowers costs, improves delivery performances, plans future inventory accurately and decreases
stock out chances. With this report, Administrators of Renishaw Plc analyses the level of
inventory which is used addition to the inventory that is on hold. It also alerts managers about the
stock that requires purchase decision as well as quantity of materials available with company so
to pursue operations.
4

Management accounting reports at Renishaw Plc are used by all departments in order to
estimate budgets and work within that, identify business defaulters as well as ascertain company
performances with its resources.
M1. Benefits of management accounting system.
Management accounting system Benefits and Application
Job costing system At Renishaw Plc, the system is applied for
ascertaining accurate cost associated with
manufacturing jobs related to coordinate measuring
machines. Selected institution is benefited by this
system as it helps in continuously monitoring
Manufacturing procedures and classifying jobs or
products in distinct categories that can results in
gaining beneficiary edges (Carnegie, 2014). Through
this, incomes levels are identified by ascertaining
jobs.
Inventory management system Renishaw Plc applies the system at its premises so to
monitor and maintain stock of products. Using the
system, management team of respective enterprise
gains benefits to reduce overselling or underselling
risks, streamline procedures by eliminating costs
associated with stocks, improves business
negotiations and improves abilities for profitable
business decisions.
Price optimising system Price optimising system is applied at selected firm for
calculating the ways in which demand varies during
changes in price level of distinct products. It provides
advantages to the selected business by reducing error
possibilities, changing pricing structure with quick
decisions. It helps in setting appropriate prices that
are affordable by customers as well as benefits
5

business.
Cost accounting system Cost accounting system is applied at premises of
selected business so to get detailed aspects about
various costs that are incurred in manufacturing of
machine tool products. With such system, Renishaw
Plc enjoys benefits of classifications as well as sub
dividing costs, proper planning, having control over
materials, ascertaining actual costs, framing business
policies and standardising measuring efficiencies
(Cooper, 2017).
D1. Integration of management accounting systems as well as reporting with organisational
processes.
Accounting systems includes techniques to prepare reports by following instructions or
procedures that helps in working to gain success. Renishaw Plc makes proper usage of
accounting systems such as inventory management system for tracking inventory level to work
with set procedures towards producing final machine tool products. In contrary, distinct other
accounting systems like price optimising, cost accounting as well as job costing system which
helps in working with set procedures of organisation (Englund and Gerdin, 2018). At same time,
reports methods delivers confidential information related with operations including procedures to
reach targets and implementing strategies or plans that facilitates set procedures towards
enterprise objectives. For example, by choosing reporting methods like budget, inventory
management with performance can helps in determination of actions improving profitability.
Hence, reporting methods also with systems are closely integrated with procedures sets by
businesses.
PART B
P3. Calculation of costs and preparation of income statements.
Cost: Monetary values that are utilised by business to price products addition to
delivering services is cost. Organisation makes expenditures to obtain raw materials, equipment,
supplies, labour and various items.
6

Techniques to calculate costs:
Absorption costing: It is a technique where consideration is on accounting indirect
expenses with direct costs. With this method, actual analysis of all assigned manufacturing costs
is done to units produced. Such method helps in accumulating costs that are connected with
manufacturing procedures addition to allotting them for individual products. The cost associates
with finished products includes costs associated with fixed manufacturing overheads, material,
labour together with variable manufacturing overhead.
ANNEXURE (A)
Q1.
A. Income statement by marginal costing method:
Particulars Quarter 1
Product A
(Dining
table)
Product B
(Chairs)
Sales 2566500 1440000
less: unit variable costs
Direct materials 935250 320000
Direct labour 391500 480000
Prime cost 1239750 640000
less: Variable production overheads 108750 80000
Contribution 1131000 560000
less: Fixed costs 410000 410000
Total profit/loss 721000 150000
Particulars Quarter 2
Product A
(Dining
table)
Product B
(Chairs)
Sales 1003000 1719000
less: unit variable costs
7

Direct materials 365500 382000
Direct labour 153000 573000
Prime cost 484500 764000
less: Variable production overheads 42500 95500
Contribution 442000 668500
less: Fixed costs 482000 482000
Total profit/loss -40000 186500
Working note:
1.
Total variable cost per unit 51.5
COGS
Production cost 257500
Less: closing stock -25750 231750
2.
Per quarter standard production 5500
Fixed production cost 75000
Fixed prod. Cost per unit 13.64
Actual cost 68200
absorption 6800
B. Income statement by absorption costing method
Particulars
Product A
(Dining
table)
Product B
(Chairs)
Product A Product B
Sales 2566500 1440000
8

less: Cost of sales
Opening inventory - -
Direct materials 935250 320000
Direct labour 391500 480000
Variable overheads 108750 80000
Fixed costs 410000 410000
less: Closing inventory -650 1844850 -4000 1286000
Gross profit/loss 721650 154000
Particulars Quarter 2
Product A
(Dining
table)
Product B
(Chairs)
Sales 1003000 1719000
less: Cost of sales
Opening inventory 650 4000
Direct materials 365500 382000
Direct labour 153000 573000
Variable overheads 42500 95500
Fixed costs 482000 482000
less: Closing inventory -3500 1040150 -2900 1533600
Gross profit/loss -37150 185400
Working notes:
1.
Total variable cost per unit 51.5
COGS
opening stock 25750
Production cost 303850
Less: closing stock -149350 180250
9

2.
Per quarter standard
production 5500
Fixed production cost 75000
Fixed prod. Cost per unit 13.64
Actual cost 80476
absorption -5476
C. Reasons for the difference in the profit figures for the above two methods
There reason for the different profit figures calculated through marginal and absorption
methods is because marginal costing only considers variable cost to calculate contribution
whereas absorption costing method absorbs both fixed addition to variable costs in calculation of
gross revenues.
ANNEX (B)
Q1.
(a) Absorption costing using Labour hour absorption rate: -
Particulars
Product X £6000*1 £6000
Product Y £8000*2 £16000
Labour Hour = £2,64,000/22000 = £12 per hour.
10

(b) Using ABC:
b) Using ABC approach: -
Machine hour per period:
Product X £6000*4 £24,000
Product Y £8000*2 £16,000
Cost driven rate: -
Production set up £179,000/60 2893 per set up.
Order handling £30,000/72 417 per order
Machine cost £55,000/40000 1.375 per order
Overhead using ABC
approach: -
X Y
Set Up 15*2983 = 44745 45*2983 = 134,235
Order 12*417 = 5004 60*417 = 25,020
Machine Cost 24000*1.375 = 33,000 16000*1.375 = 22,000
Total 82749 181255
Interpretation: The above calculation concludes that for product X, total overhead
production is 72000 as well as for product Y, it is 192000 which are calculated using absorption
costing approach. Other than this, with ABC approach, the ascertained overhead for product Y is
181255 and for product X is 82749. Further, it is analysed that there are distinct other activities
that were involved in production procedure.
M2. Application of management accounting techniques.
For calculating profitability, there are several techniques that are adopted by financial
accountants. Accounting techniques helps in analysing, classifying, recording, maintaining and
controlling operations. Such as marginal costing techniques is applied at entities to analyse
11

information related with cost in order to calculate break even output level, devising pricing
strategy and abandoning business line (Gray, Coenenberg and Gordon, 2013). On other hand,
absorption costing techniques at respective firm is applied with the aim to assist pricing
decisions, preparing value inventory together with financial reporting documents.
D2. Interpretation of data
Results of operations, cash flows addition to financial position are generally analysed
through financial reports. They provide crucial information about business financial health. Such
reports are compiled with on the basis of daily bookkeeping which tracks monetary resources
that are flowing out or in of business so to show proper results of losses as well as profits
attained in accounting period. As per the above mentioned financial statements, it has been
interpreted through absorption costing method, attained net income of in 112569 £. In contrary,
with marginal costing approach, analysed profits are 150750 £.
ACTIVITY 2
Part A
P4. Planning tools for budgetary control.
Budget: General statements about expected expenditure and revenues of a firm during
fiscal period are described to budgets. These plays important role in business planning process.
Budgets comprises of valuable inputs that are derived through planning that makes it a powerful
tool for guidance. It is always expressed in monetary terms and prepared for static duration (Ball,
2013). It allows proper planning of upcoming revenues with expenses addition to save for
coming durations. Financial managers of Renishaw Plc prepare budgets to reallocate resources,
anticipating future financial conditions, coordinating departmental efforts and accelerating
business operations. They provide coordinated action plan designed to attain estimates.
Budgetary control: Estimation of future financial needs along with orderly arrangement
is done through budgetary control (Hoque, 2018). With such concept, organisational managers
fix objectives for financial addition to business performance. It serves purpose of enabling
management team to conduct activities or operations of business in suitable efficient manner. It
presents clear objectives, programmes addition to interprets them in quantitative terms. It further
helps in controlling together with observing financial performances pertaining with business.
Certain activities are part of budgetary control such as planning, organisation, presenting,
12

coordinating, evaluation as well as controlling operations as per the specified budgetary goals.
With budgetary control, directions to business operations are provided in desired manner.
Furthermore, comparisons are made on ongoing terms among the planned results as well as
actual ones so that corrective actions are taken on time by the administrators. Management
accountants of Renishaw Plc uses budgetary control tools for the purpose to plan as well control
operations of the company so to attain satisfactory investment returns (Planning tools. 2019).
Followings are planning tools used for budgetary control:
Overheads budget: Formulation of estimates about costs or expenses pertaining to direct
as well as static labour costs is done through overheads budget. It is not only restricted to direct
or indirect factory expenses but also comprises other accompanying expenses. At Renishaw Plc,
overhead budget is formulated department wise so to have efficient control on several costs.
With this budget, financial managers of the institute properly estimate all the uncertain overheads
and keeps reserves to deal with uncertain overhead cost in adequate manner which further helps
in ensuring financial stability and performances even in worst conditions.
Advantages: Such budget helps in tracking overhead costs in accurate manner and
controlling them. It benefits the company to determine pricing of machine tool products
including all expenses so that profitability is achieved.
Disadvantages: Proper analysis by management of Renishaw Plc that are prepared
department wise and reaching on final decision takes much time which delays in making
provisions to control rising expenses on accurate time (Jack and Mundy, 2013).
Cash flow budget: Estimates about cash receipts or expenditures that are liable to occur
in certain time period is done with cash flow budget. Renishaw Plc uses such budget to farm
yearly plans, test plans to analyse that business has enough monetary resources to meet
requirements of cash and communicates such plans to entire organisation members. With this
budget, organisational managers keep their expending in line to planned cash flows that ensures
financial stability.
Advantages: Such budget helps the organisational management to manage cash by
considering aspects such as account receivable accounts so to determine that there are sufficient
cash flows to continue operations.
13

Disadvantages: Cash flow budgets only focuses on money movement not on net income.
It limits recording credit transactions that does not provide accurate position of cash at selected
entity.
Incremental budget: Budgeting based on little modifications from previous duration
budgeted outcomes is characterised to incremental budget (Dekker, 2016). When management
authorities do not have much time to formulate new particulars for budget they prepare budgets
through incremental approach. In such budget tool, the amounts for new budgeted amounts are
increased at some constant rate as per the previous year budget. The finance department of
Renishaw Plc uses incremental budget for building equality values among departments so that
each department are provided similar amounts by adding values in previous year budget. With
incremental budget, proper assumptions are made for gaining future profits and losses that
further ensures financial stability together with performance.
Advantages: The planning tool of incremental budget eliminates unproductive expenses
while framing current year budget that further results in saving management time.
Implementation of the budget is easy as well as does not involve tough calculations and analysts
can ensure that are no large deviations in budget year that results in stable budgets for Renishaw
Plc year to year.
Disadvantages: Incremental budget is prepared as per past assumptions that shows
unreliability for current year budget. Preparing of the budget encourages more spending that
results in spending unnecessary funds of institution. It also causes perceptual allocation of funds
to departments that reduces business revenues to great numbers (Nielsen, Mitchell and Nørreklit,
2015).
Financial budget: Predicting gains together with losses for short or long term period is
done through financial budget. It provides accurate projections about movements of cash to
achieve objects in right manner. Finance team of respective business uses financial budget to
determine stability and performances in financial context.
Advantages: Financial budget provides financial awareness about business earnings or
spending in exact manner. It helps chosen organisation to reveal directions about financial
standings by providing information about monthly profits as well as ongoing debts.
Disadvantages: Financial budget is prepared after financing operational activities and if
such activities are not properly planned then the budget will not function as per the objectives.
14

M3. Uses with application of tools so to forecast budgets.
Exercising financial control are usually done with planning tools. These tools are used to
set targets, establishing priorities, controlling expenditures, assigning responsibilities,
communicating targets and monitoring performances by proper budget forecast. Planning tools
including cash flow budget, overhead budget and financial budget are used to determine future
circumstances and projecting them through budget forecast (Kaplan and Atkinson, 2015). Such
as Cash flow budget is applied by financial accountants at Renishaw Plc to properly estimating
receipts and payments of cash in future duration whereas financial budget is applied to predict
revenues or expenditures that can occur during short or long terms. All these planning tools are
applied with the aim to evaluate current financial performance so to prepare plans for upcoming
time in order enhance profits.
ANNEX C
Q3.
15

NPV Product X Product Y
NPV = Dis Cash flow – Initial
Investment
= 5416.647 – 5000
= 416.647
= 7182.647 – 8000
= -817.353
Interpretation: It has been interpreted that Product X is much better than product Y as
for product X the NPV value is higher than Product Y.
16

PART B
P5. Comparison of ways in which management accounting systems are adopted to respond
financial problems.
Financial problems: When company faces shortfalls of cash that becomes hurdles to
maintain daily trading operations, such circumstances or hurdles are financial problems. There is
no business that do not face such problem as at some time due to limited funds or unexpected
cash flow various activities gets hampered which upshots in financial issues. These may arise
due to internal factors or external elements interferences. It is crucial to discover sources of
issues and policies are framed accordingly in order to resolve them in prominent manner. In
context to Renishaw Plc, following problems are faced that hampers performing crucial
operations to attains profits:
Delays in payments by clients: Management team to boost sales quantity in the
competitive scenario, allows marketers to offer huge quantity of to their potential clients on
credit. Its outcomes are that clients delay in making full payments that restricts inflow of cash to
run daily operations.
Huge spending against revenues: To attract more customers towards organisational
products such as motion control, spectroscopy and coordinate measuring machines, company
spends too much on promotional activities that increases costs and reduced profit margins.
Renishaw Plc to promote various machine tool products at distant locations, more monetary
resources are invested then the predetermined budget due to which financial problems arises
(Leotta, Rizza and Ruggeri, 2017).
Management approaches for resolving financial problems:
Benchmarking: To measure performance, practices and policies of a business against
other ones that are best in industry, benchmarking is effectively applied. Business analysts
discovers practices of other best companies and prepares reports about policies or strategies that
helps them to attain huge profits. In context to Renishaw Plc, this approach can be used to
identify problems such as more spending against revenues. They make analysis of strategies used
to promote products within set budgeted estimates and accordingly implement them at their
organisation so that spending is controlled and financial problem is resolved.
17

KPI: Performance measurement tool that evaluates organisational success including
initiatives, programs or activities. It is used as per the business priorities. It shines the aspects in
which activities are performed in well and meaningful manner. Financial indicators help in
focusing towards issues and making effective plan to resolve it (Marelli, 2015). Such as
Renishaw Plc can use such approach to discover issues pertaining with delays in payments from
clients. They can evaluate performances of clients in competitive market and accordingly frame
strong strategies that can force clients for timely payments which will resolve issue associated
with limited finance.
Financial governance: These defines the manner in which financial information are
gathered, recorded, monitored and controlled. Various policies, principles, procedures addition to
standards are adopted by Renishaw Plc so to manage information as well as ensuring the
accuracy of collected data. It involves data security, financial policies, audits, tracking,
workflows, controls as well as validations. Proper data structures are maintained and formatted
to resolve various issues. For instance, adopting principles or standards of accounting can help
selected company to cover deviations among financial, operating and investment activities such
that sources are identified and problems are resolved with proper solutions.
Comparison among Renishaw Plc with Galway Plc
Comparison basis Renishaw Plc Babcock International Plc
Problem The identified problem of this
company is delays in payment
from clients due to supplying
machine tool products in bulk
quantity on credit terms that
restricts cash inflows
(Maskell, 2013).
Selected entity is facing
financial issue of huge
spending that revenues because
of spending more on
promotional tasks against the
budgeted estimates.
Accounting approach Through KPI approach, stated
problem is discovered by
evaluating client’s positions as
well as implementing policies
that can help in collection of
Using benchmarking approach,
defined issue is identified. It
well help in comparing
operations or tasks with strong
company and modifying
18

payments on specified time. existing ones to promote
products by staying in budget.
Accounting system Usage of price optimisation
system can help in allocating
suitable prices for
measurement tools as well as
healthcare products as per
customer perceptions so that
no credits are requested and
payments are done on time.
Cost accounting system suits
to resolve the business problem
as to allocate funds to
marketing department in
accordance to effective
promotion strategies so that
workings are done within set
limits (McMullen Jr, 2013).
M4. Analyses of ways management accounting helps in resolving financial problems.
Management accounting facilitates decision making, understanding financial information,
planning ahead, controlling operations and identifying problem areas. Various accounting
techniques are associated within management accounting which plays key roles in solving
problems properly. Business units have specific purposes, objectives and uses accounting
according to their personal needs (McWatters and Zimmerman, 2015). Analysts of Renishaw Plc
can make use of KPI approach to figure out problems associated with payment delays from client
side. This will improvise circumstances as pressurise strategies will be implemented on clients
which will result in well-timed payments and will resolve monetary resources issues which will
ultimately lead to sustainable success.
D3. Evaluation of the ways planning tools respond appropriately to solve financial problems as
to lead sustainable success.
Planning tools puts plans into actions so that budgetary estimates are prepared so to
manage funds and operations. Tools of planning like financial budget, cash flow budget as well
as overhead budget are opted by Renishaw Plc for resolving problems. Such as the business is
overlaid with difficulty in cash flow to run operations (Su, Baird and Schoch, 2015). In this,
application of cost accounting system including cash flow budget will provide benefits to gather
data about cash flows and make strategies to improve the conditions in such manner that results
in leading sustainable success.
19

CONCLUSION
It can be summarised from above discussion that collecting, monitoring and controlling
information is done with management accounting so to improve business conditions. Job costing,
inventory management, price optimising and cost accounting systems are part of management
accounting systems. Methods for accounting reporting embrace performance report, inventory
management report additionally budget report. In context to preparing income statements, used
costing techniques are marginal and absorption. Particular planning tools includes overhead
budget and financial budget that helps in forecasting future conditions about expenses or
revenues and preparing budgets. Accounting approaches including KPI and benchmarking helps
analysing issues and preparing solutions to pursue sustainable success.
20

REFERENCES
Books and Journals
Ball, R., 2013. Accounting informs investors and earnings management is rife: Two questionable
beliefs. Accounting Horizons. 27(4). pp.847-853.
Bandy, G., 2014. Financial management and accounting in the public sector. Routledge.
Berry, A. J., Broadbent, J. and Otley, D. T. eds., 2016. Management control: theories, issues and
practices. Macmillan International Higher Education.
Bovens, M., Goodin, R. E. and Schillemans, T. eds., 2014. The Oxford handbook public
accountability. Oxford University Press.
Boyns, T., Edwards, J. R. and Nikitin, M., 2013. The birth of industrial accounting in France
and Britain. Routledge.
Carnegie, G., 2014. Pastoral accounting in colonial Australia: a case study of unregulated
accounting. Routledge.
Cooper, R., 2017. Target costing and value engineering. Routledge.
Dekker, H. C., 2016. On the boundaries between intrafirm and interfirm management accounting
research. Management Accounting Research. 31. pp.86-99.
Englund, H. and Gerdin, J., 2018. Management accounting and the paradox of embedded
agency: A framework for analyzing sources of structural change.
Gray, S. J., Coenenberg, A. and Gordon, P., 2013. International Group Accounting (RLE
Accounting): Issues in European Harmonization. Routledge.
Hoque, Z., 2018. Methodological issues in accounting research. Spiramus Press Ltd.
Jack, L. and Mundy, J., 2013. Routine and change: The role of management accounting and
control. Journal of Accounting & Organizational Change. 9(2). pp.112-118.
Kaplan, R. S. and Atkinson, A. A., 2015. Advanced management accounting. PHI Learning.
Leotta, A., Rizza, C. and Ruggeri, D., 2017. Management accounting and leadership construction
in family firms. Qualitative Research in Accounting & Management. 14(2). pp.189-207.
Marelli, A., 2015. The evolving role of environmental management accounting in internal
decision–making: a research note. International Journal of Accounting, Auditing and
Performance Evaluation. 11(1). pp.14-47.
Maskell, B. H., 2013. Performance measurement for world class manufacturing: A model for
American companies. Productivity press.
McMullen Jr, T. B., 2013. Introduction to the theory of constraints (TOC) management system.
CRC Press.
McWatters, C. S. and Zimmerman, J. L., 2015. Management accounting in a dynamic
environment. Routledge.
Nielsen, L. B., Mitchell, F. and Nørreklit, H., 2015, March. Management accounting and
decision making: Two case studies of outsourcing. In Accounting Forum (Vol. 39, No.
1, pp. 66-82).
Su, S., Baird, K. and Schoch, H., 2015. Management control system effectiveness: The
association between types of controls with employee organizational commitment across
organisational life cycle stages. Pacific Accounting Review. 27(1). pp.28-50.
Taylor & Francis, Suomala, P. and Lyly-Yrjänäinen, J., 2012. Management accounting research
in practice: Lessons learned from an interventionist approach. Routledge.
Vosselman, E., 2014. The ‘performativity thesis’ and its critics: Towards a relational ontology of
management accounting. Accounting and Business Research. 44(2). pp.181-203.
21