A Review of Australian Management Accounting Research

The provided document is an academic paper that reviews Australian management accounting research from 1980 to 2009. It includes summaries and analyses of several studies and papers on the topic, such as those by R.H. and Smith (2011), Contrafatto and Burns (2013), and others. The paper also discusses the role of organizational absorptive capacity in strategic use of business intelligence to support integrated management control systems. Additionally, it examines data mining applications in healthcare and reviews data mining techniques and applications from 2000 to 2011. The paper aims to provide an overview of the current state of Australian management accounting research.

MANAGEMENT
ACCOUNTING

To: General Manager of Natural Window Limited.
From: Management Accounting Officer
Subject: Accounting report that will help in making proper decision and strategies with use of
effective technology too.

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
P1 Management Accounting and its various types of accounting systems.................................2
P2 Different method used for accounting report.........................................................................4
TASK 2............................................................................................................................................6
P3 Technique of Cost analysis using marginal and Absorption cost..........................................6
TASK 4..........................................................................................................................................10
P4 Advantages and disadvantages of planning tools and for budgetary control.......................10
TASK 4..........................................................................................................................................13
P5 Organization which adopt the management accounting system..........................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................14
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INTRODUCTION
In today's scenario, Management Accounting is such which help company to have proper
decision in firm and they also record the financial and non-financial activity. These term is that
who aid in making investment in better way. Generally, every individual firm look forward to
conduct research in order to gain information of market as where investment can be made and
maximum return can be gained (Arroyo, 2012). Moreover, technology is playing crucial role in
accounting and helping enterprise to record every transaction at single place in right context.
Normally, changes in outside environment does affect the working of organization and for such
few creativity in policy and procedure do help in handling and maintaining the situation in better
way. The report is based on Natural Window Limited, as offer various wooden doors and
windows in a reasonable range that attract the customers to take their product and services and
make them to satisfy. Firm themselves uses effective technology according to requirement to
improve their working in better way too. Management accounting is that as uses different
method. Although, planning tools with comparison of two entity and also help in many financial
issues of company.
TASK 1
P1 Management Accounting and its various types of accounting systems.
To: General manager of Natural Window
From: Accounting officer.
Management Accounting: Management accounting help to determine the process of
measuring, identifying, interpreting, analysing and communicating financial information to
accomplish a firm's goals, known as accounting. There is a difference between management
accounting and financial accounting; management accounting provides detailed financial
information and develops reports for internal and confidential use for a company's managers to
take decisions, whereas financial management aid in offering information to the external parties
like stakeholders,public regulatory and lenders, in accordance with general accounting principals
of an organization (Chenhall and Smith, 2011). The purpose of preparing management accounts
and reports is that; it offers a timely and accurate statistical and economical information which is
required by the managers to establish routine and short time decisions with efficiency. There are
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several kinds of managing accounting types including inventory management, cost accounting
management, price optimization, and job costing system.
Cost accounting system – Cost accounting system is also known as costing method
which renders a framework that is applied by the corporation to calculate the approximate costs
of products with respect to inventory, profit analysis and cost control. It measures the lump-sum
amount of product investments to know the value of inventory and earned profit and control on
production cost. It measures the actual costs of product through identifying total inputs for every
piece of production step plus fixed costs such as capital instrumentation depreciation. It
individually measures and record the costs of inputs comparing with outputs to assist
management of a company to value financial performance (Burritt, Schaltegger and Zvezdov,
2011). Any task can only be explained through costs so that any business manager rely on
statistical data that helps to take a decision. In management cost accounting refers as a key
concept because it offers many analytical tools such as budgetary control, marginal costing,
standard costing, operating costing and inventory control for the management to improve the
efficient production. For illustration, in Natural Window Ltd. , includes cost of developing
windows from purchasing raw material like woods and all, manufacturing and furnished for the
sale, these all phases have different expenses and calculated in cost accounting systems.
Inventory management – Simply, inventory management is a method to control and
keep an eye on the ordering, and storage of components which is used in production of goods. It
involves some kinds of such goods, stock consumables, supplies finished goods, to keep in
account that what are the available assets and what are the needed to develop new finished
goods for sell, on a major note it, it overseeing and control the inventory stock and furnished
goods, so that it can minimize the overstocking and under stocking problems to maintain flow of
work. Through maintaining stock accounts across locations, it becomes easy for the managers to
have an insight that make them able to take inventory decisions (Bodie, 2013). For example,
Natural Window Ltd., offers a home furnishing things like windows and doors so it required to
keep a record of raw materials like woods, glazing etc. so that it can identify the needs of new
purchasing and finished products so that it will not come up in a situation of loss, by over supply
or under stocking. There are many kinds of inventory systems such as creating purchase orders,
receiving, relocating, adjusting and disposing of inventory, sales orders, picking, packing,
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shipping. The foremost benefit of inventory management is that it enhances the key points with
accurate workflow.
Job costing system - Job costing system defines manufacturing costs individual goods or
a batch. It is applied only when items are different from each other, it involves the costing on
particular kind of products on which different prices are applied, it is important to accumulate the
cost to determine correct estimate of a firm which is capable to quote prices of that can generate
reasonable income. It also requires to accumulate three kinds of job costing system like labour,
direct materials, and overhead (Baldvinsdottir, Mitchell and Nørreklit, 2010). For an instance,
in Natural Window Ltd., cost of developing two kinds of windows can be differ because of their
input material, manufacturing and labour so the job costing system will apply to know the
estimated price and the remaining cost can be refund under the contract.
Price optimization systems - Price optimization systems can be determine as
mathematical analysis, in terms of how consumers responds to distinct level of prices for
purchasing goods and services. It also involves in the process of determining best fit costs by the
company, which can bare the all expenses in product development. It aid to recognize the
maximum desired aspects and minimizing the unwanted factors.
Although management accounting and its various system are such which help in working
in smoother manner and thus this is such which lead to attain the goals and objectives in right
context too.
P2 Different method used for accounting report.
Accounting is considered as main aspect of firms like Natural Window. Moreover,
financial accounting do help in making proper and effective decision to top general manager of
company in order to attain higher profit too. Although control and monitoring can be seen in
better scenario. Generally there are some method of accounting which help entity too:
Inventory reporting: It is such which help firm to check up stock in warehouses in
effective way. This reporting system is that which does help company to managed in right
manner or not (Contrafatto and Burns, 2013). These type of system do assist in minimising the
chances which occur in manner of overstocking and under stocking.
Application: Inventory reporting system can help in effective working and warehouses can be
analysed at anytime. Even though such type of reporting can help them to manage the over and
under stock scenario. If overstock is there then manufacturing of doors and windows can be
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minimised and thus in condition of under stock a production can be there and thus such criteria
can make firm to provide their product and services on time too.
Account Receivable reporting: Finance accounting thus help in managing the activity in
great manner and also manage cask flow of firm in right context too. This reporting handle thing
like from who and how much amount has to be received. In various information is available like
from whom to receive, time and how much amount etc. are criteria is involved. Therefore, it also
minimise consequences with cash flow in effective manner.
Application: Natural Window Limited firm can use such reporting system in better manner and
although entity can receive the amount which is remaining from different parties and even on
time it can be received as well so that work of natural window does not get hamper related to
finance. Generally, it is quite maintained on monthly or quarterly basis.
Account payable reporting: This method can help firm to maintain their record as to
whom the amount has to be paid and how much even though on which date too (Elbashir,
Collier and Sutton, 2011). Having proper maintenance of record and paying amount on time
bring to have a effective relation in between the supplier of raw materials and company too.
Application: The Natural Window Limited it that company who uses such type of reporting as
this help them to collect information as to who the amount has to be paid and on which date.
Such kind of software and system does help firm to work in smoother manner. Payment of
money to raw material lenders can bring in having effective relation and even though also help in
making a goodwill of firm too.
Performance reporting: Performance reporting application should be there and it is that
which is normally used by many company not only by Natural Window, such concept help firm
to determine the performance of employees and whole management of company and it is being
done with measuring the performance with various method, this is such which will also increase
the performance and productivity of employees and make firm to attain their goals and objectives
in right format (Granlund, 2011).
Application: This is that which also applicable on Natural Window as effective increase in
performance can be seen, even though with this identification of various issues and problems can
be determined at the lower level and according to scenario proper steps also be taken to improve
those. Bringing effective policy and procedure help employees and management to work in
effective way in enterprise.
5

Budget Reporting: Budget is that which allow accounting management to divide the
finance available in right contrast and this also help firm to work with coordination in between
various department too. Budget can be considered as expense which occurred in performing
certain task or activity. Therefore, different division should use amount in right manner and
using in proper format also lead to reduction in wastage, which directly help to make an effective
and proper decision in company (Koh and Tan, 2011).
Application: The Natural Window is small company who does not have various department but
they also need to have a budget reporting as this help them to reduce the wastage of finance and
thus they can use such at right place. Even though entity use such criteria which help in making
an effective decision and also bring strength to work in proper way too.
All these reporting system is such which also help in having a work in proper manner as
well and thus make company to attain their goals and objectives in right context too. All these
help in managing the financial criteria in right format too.
TASK 2
P3 Technique of Cost analysis using marginal and Absorption cost.
In accounting system a income statement is such which do include the document of
company in better manner and thus help in managing accounting in Natural Window Limited. It
include different thing like revenues and expenses in better manner, even they also include the
operating and the non-operating activities in right context too. Hence, it help in calculating net
profit and loss as well (Kotas, 2014). The marginal and absorption cost is hat which help in
calculating the finance and help in making income statement in better way:
Cost: An amount which is being paid or given up in order to gain something in better
way. In businesses, cost is that which is usually considered as monetary evaluation as (effort and
material, resources, risk incurred, opportunity and time utilisation ) are all such include at
production and delivery part of goods and services too. Even though all the expenses are cost but
all costs are not ( incur in acquisition in generating income and asset).
Absorption Cost: It is that which is used normally with selling and administration
expenses and also include the income statement too. It also considers the finished stock and it is
also considers direct labour and material with variable and fixed overhead. Moreover, it also
include costing criteria which is somewhere very much significant for firms and having an
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adequate decision too and it can be made with reduction of wastage in resources in efficient
manner. Hence, this is method which was earlier used with traditional accounting.
Marginal costing: Marginal cost is said to be occurred with additional production made
and their fixed cost does gets affected in various ways too. This is being considered as extra
production and also manufacture the product which do make out with variable cost and it has to
be considered as income statement in better way (Liao, Chu and Hsiao, 2012). Mainly, the cost is
also related with labour and raw material which do used in manufacture in having additional part
of product in right context too. Hence, it is better to understand this with difference in between
the marginal costing and absorption costing:
Difference of the basis Marginal cost Absorption Cost
Meaning It is the technique which help
in making decision by
organization and somewhere it
also help firm to discover
various total cost in production
and it is called as marginal
cost.
This is such which do include
total cost and also lead to cost
centre and it is used to
determine various total cost of
manufacturing and it is also
known as absorption cost of
firm.
Use The use of methodology in
making better decision in
favour of company in effective
way.
This type of costing is such
which has extrinsic report in
better way.
Accounting standard When the employer make an
evaluation of stock in
company and thus in case of
manager it can not be applied
and on the basis of rules and
regulation of organization.
It is something which is an
indication of the international
accounting so that company is
such which use tool and
technique during the
merchandise valuation.
Fixed cost On the basis of various kind of
attributes and thus it is
necessary to minimise the
This cost generally occur at the
time of product which is being
sold and even though in same
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fixed expenses from the total
contribution. It is such which
can be done with only goods
of company which needs to be
sold in the same year.
year only.
Evaluation of inventory Necessary to include the
various cost and if stock is
valuable to manager of the
company.
On basis of various kind of
tool, manager and it should be
there which needs to complete
the cost for its objectives in
right context.
Calculation as per Absorption costing.
Working notes:
Absorption costing
Working 1: Calculate full production cost
Direct material £6
Direct labour £5
Variable cost £2
Fixed cost £3
Total £16
Working 2: calculate value of inventory and production
Opening inventory Production Closing inventory
0 700*19 = £13300 100*16 = £1600
Working 3: under/ over absorbed fixed production overhead
Actual fixed production: £2100
Fixed overhead: £2000
Total £100(over absorbed)
Administration Cost: In this budgeted cost is £800 and Actual cost is £700
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Production Cost: £700
Selling cost: In this budgeted cost is £400 and Actual cost is £600
Net profit using absorption costing £ £
Sales
(-) Cost of Sales:
Opening stock
Manufacturing
Closing stock
(Under)/ Over absorbed fixed prod.
O/h
Gross Profit
Less Expenses
Variable sales expenditure
Fixed administration expenses
Fixed selling expenditure
Over absorption
Net Profit
0
11200
(1600)
600
700
600
(100)
21000
(9600)
11400
(1800)
9600
Working 1: Calculate variable production cost £
Direct material 6
Direct labour 5
Variable production O/h 3
Variable production cost 14
Working 2: Calculate value of inventory and production
Opening inventory Production Closing inventory
0 700*14 = 9800 100*14 = 1400
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Net profit using marginal costing £ £
Sales value
Less: Variable costs
Opening stock
Manufacturing
Closing stock
Contribution
Less Fixed costs
Variable Production expenses
Administration cost expenditure
Selling cost
Net Profit
0
9100
(1300)
2000
1300
600
21000
(7800)
13200
3900
9300
From the above data it can be concluded, it is necessary that there is a need to use the
absorption costing. Moreover, it does help in developing the income statement in firm which also
analyse the position in better manner. Various help of scenario, the firm is that which get more
revenue and that is £9600. Another thing is marginal costing in its business and from this
revenue is around £300. Major reason is handling the fixed value or cost too. When the entity
uses the marginal costing and then the fixed expenses is there which lead to reduce the total
contribution in order to have a calculation of profit.
TASK 4
P4 Advantages and disadvantages of planning tools and for budgetary control.
Budget: Budget is considered as future activities and also expenses as well. Moreover, it
is planned and also gather needed information within specific time period which is relevant to
business activity and the operation too (Lukka and Modell, 2010). Hence, it is somewhere also
helpful in evaluating the cost and expenses in which Natural Window and it needs to expand
manufacturing the product and services as well.
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It is related with design of planning in with operation for their particular gaps as well.
Normally, it is being used to develop it more then in year and it also apply the result of firm and
in their favour too.
Budgetary Control: It is being considered as an important and essential part which is
somewhere related to budget and also influence the management in order to carry out operation
as planning, directing, controlling and also lead to determine different thing too. It is also
concerned with various activities of organization and also being segmented in two different parts
as it is being called as budget centre too.
Budgetary control process:
Discuss with concern employers: It is also necessary for an employer to have a proper
evaluation and thus with help of this information and data with each other as well. Although, it is
a need to have an manager which leads to develop the proper budget and also manage the
expenses in better manner of cost too (Parker, 2012).
Do better assumption: Generally, gathering information related to employer and also
review to although management should have an assumption which leads to overcome from all
various losses. The main thing of the budget plan is to have control and also manage the activity
with additional cost and operation as well in future.
Fixed data of company: Although in this process, an proper lost of information and data
which is somewhere formulated to collect from all various functions of an organization as well.
It is quite needed thing which needs to develop the plan on various basis as set standard too.
Analyse the data: Natural Window is such which can analyse the performance level
which thus help in proper manner and thus it is also related with data in with context to which is
with one budget too. It is such which also help in developing and productivity of organization in
right context too.
Feedback analysis: In this, employer also monitor the various steps and also leads to
follow thing in proper manner too.
Planning tools: In Natural window Limited, planning is concerned with the management
technique which is somewhere helpful in defining the goals and aims of company in future
context too (Qian, Burritt and Monroe, 2011).
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Forecasting tools: Tools are normally related with particular assumptions and it leads to
have knowledge, management skills with proper judgement as well. It is also considered and
known with past data which identify proper data.
Advantages
 It is such which also determine the objectives.
 Management is that who know the sales and total cost in right context too.
Disadvantages
 Firms are those who does not make exact estimation of various expenses as well.
 Impacts in various firms objectives as well.
Scenario tools: Managers are those with tools and techniques that also order in determining
alternative option with their basis of condition in right context too (Roy and et. al., 2011).
Moreover, it also help in planning, functional and operational management of business.
Advantage:
 Employers are those who provide the effective ideas related to selection and
implementation both.
Disadvantage
 It is something which does not provide the proper and the particular information too.
TASK 4
P5 Organization which adopt the management accounting system.
Normally, firms do face many problems and issues which is somewhere related to the
finance that mostly arise from the financial year in better manner. It is also included with
investing, financing with operation as well. Even though if the tools and technique in business
are not used in proper and effective way then the financial problems will also arise in great way
too (AprilVan Helden and Northcott, 2010). Tools and technique are used to analyse the business
in which outcomes are also based on financial terms as well. Budgetary control is such which is
very effective and also leads to use it in context to control, also manage the outflows and inflows
of capital in order to get the profit in right mannerism. Although the comparison is such which
can be done in between the different organization.
The difference in between two firms are as follows;
Natural window Anglian
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Company is such who uses the lean accounting
method in better manner too.
Firm is still using the conventional method of
working.
Organization is such who use the advanced
technique which also lead to work with
updated software in better manner.
The company is such and also lead to prepare
and maintain the accounts in manual manner.
Lean accounting is that which is having a
difficult method which also lead to consume
extra time in determining the data.
In this traditional approach in business it is
very much effective as because the employer
are those who cannot use proper information in
better manner too.
If problems are needed to be resolved then, manager needs to be formulated in effective
strategy:
KPI:- It is such which stand for key performance indicator and although firm also use
tools and analyse the performance level of company which is along with the employees as well.
Managers are such which uses the SMART objectives in better manner and can be looked
forward to achieve the organizational goals and objectives in effective way (Vasile and Man,
2012).
Financial governance: It is needed for business firm to look forward and conduct the
intrinsic values and also follow the various rules and regulation which is somewhere has
developed the government. This is that which lead to help firm in conducting run and various
business operation as well in proper manner too.
Benchmarking: It is quite necessary in each and every business firm. It is quite which
does help in quality with good and also services. Firm uses purpose for some of the standard
outcomes and also maintain the quality of goods and working too (Wagner, Moll and Newell,
2011). In this context, firm is such which deals with the financial problems in proper manner and
even in right context too.
CONCLUSION
The above report is based on management accounting to give entire information to the
General manager from management accountant officer, it involves fundamentals of management
accounting with various kinds such as cost accounting system, inventory management, job
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costing and price optimization system which has distinct methods consisting of cost reports,
budget, performance reports which are used to apply controlling, planning and decision making.
It also explained calculations of costs to prepare income statement by sales, variable cost,
contribution, fixed costs, that implies the profit on marginal cost. It also involves merits and
demerits different kinds of planning tools for budgetary control, and versatile ways that
responds to financial problems. The purpose of preparing managing accounting comprising all
different kinds of aspects to establish exact estimate overall requirements in terms of expanses
and purchasing.
14

REFERENCES
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and practice in management accounting.Management Accounting Research.21(2).
pp.79-82.
Bodie, Z., 2013. Investments. McGraw-Hill.DRURY, C. M., 2013. Management and cost
accounting. Springer.
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Kotas, R., 2014. Management accounting for hotels and restaurants. Routledge.
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Wagner, E. L., Moll, J. and Newell, S., 2011. Accounting logics, reconfiguration of ERP systems
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Online
Managerial Accounting. 2017. Managerial Accounting. [Online]. Available through:
<https://www.investopedia.com/terms/m/managerialaccounting.asp>
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