Management Accounting and Reporting: A Case Study of UCK Furniture Company

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
P1. Management accounting together with essential requirements of systems...........................1
P2. Methods used in management accounting reporting.............................................................2
P3. Calculation of costs through techniques................................................................................3
PART 2..........................................................................................................................................10
P4. Advantages and disadvantages of budgetary control planning tools...................................10
P5. Evaluation how businesses adapts management accounting system for responding certain
financial problems.....................................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Management accounting is the concept and provision that is defined as systematic process to
provide resources addition to financial information to managers for framing business related
decisions. Its major objective is to utilise statistical data along with taking accurate decision for
development of business (Berry, Broadbent and Otley, 2016). To gain understanding about
Management accounting, UCK Furniture Company is selected which performs the operations in
manufacturing or constructing wooden furniture includes tables, desks and so on.
The assessment is prepared in two parts. Part One demonstrates about management
accounting systems as well as accounting reports. It also includes application of management
accounting techniques along with devising financial reporting documents. Part two of the
assessment explains about planning tools in management accounting and comparison between
organisations in context to the ways they could use management accounting for responding
financial problems.
PART 1
P1. Management accounting together with essential requirements of systems
Management accounting is mentioned to procedure of examining costs and operations of
company for preparing financial reports, accounts as well as records that assists managers to
frame suitable decision for attaining objectives and goals (Corrigan and Rixon, 2017). The
concept is used at UCK Furniture Company for managing performances, collecting and
evaluating information about different areas and operations, forecasting sales trends and figures,
financial planning and analysing return rates. The importance of management accounting in
the company is as follows:
 Management accounting is important at UCK Furniture as it helps managers to devise
make or buy related decisions
 It is also important for forecasting future fro analysing the upcoming trends and initiating
business practices accordingly to meet objectives of the enterprise.
 In UCK Furniture, other importance of the concept is to predict cash flows as well as
impacts that flows of cash have on entire performances. It helps in designing trends
charts and utilising same information to decide the ways for allocation of resources for
generating projected profit growth.
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Prerequisite of management accounting: Following are considered as prerequisites of
management accounting within UCK Furniture:
 Financial data that is provided by different departments is prerequisite in management
accounting at the company. It is because it aids administrators to devise and implement
policies to manage daily operations.
 Controlling techniques such as budgetary control as well as standard costing are also
prerequisite in the concept. It is so as the techniques are majorly utilised by managers for
keeping proper check on the ways resources are utilised to gain objectives.
P2. Methods used in management accounting reporting
The main accounting systems that are adopted by finance department of UCK Furniture are
the following with essential requirements:
Inventory management system: The system that is combination of procedures, processes
and technology for overseeing, monitoring and maintaining entire stocked products is said to
inventory management system (Cooper, 2017). The managers of UCK Furniture have adopted
inventory management system for the purpose of tracking inventory level, deliveries and orders.
The essential requirement of the system in the company is to create various documents related
with work order, material bills and many more. Addition to this, it is also required for avoiding
situations like overstock and outages of inventory at workplace.
Job costing system: The system that aids in accumulating information concerned with costs
related to particular service job or production job is described as job costing system. To analyse
the costs or tracking cost materials associated with direct material, labour and overhead,
managers of UCK Furniture prefers to use job costing system at workplace. The system is
essentially required for setting separate costs for different jobs and tailoring certain costs as per
customer requirements. Furthermore, the system enables preparing overhead quotations, tenders
and so on by using reliable estimates. It also provides effective evaluation of all work in progress
related jobs at given duration.
Price optimisation system: Mathematical program which aids in collecting information
about variation in demands at distinct level of prices is termed as price optimisation system. The
main purpose of using price optimisation system at UCK Furniture is to determine how potential
audiences respond towards differentiations in wooden product prices through distinct channels.
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