Management Accounting Research Trends

This assignment focuses on analyzing current trends and future directions in management accounting research. It requires students to critically evaluate a selection of scholarly articles, identifying recurring themes and exploring the evolving nature of this field. The analysis should consider both quantitative and qualitative research approaches, encompassing topics such as performance measurement, environmental management, and the impact of technology.

Management Accounting

Table of Contents
REPORT..........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types of management accounting and its essential requirements..........................1
P2 Different methods which help in accounting report..............................................................3
Task 2...............................................................................................................................................5
P3 Calculation of Marginal and Absorption costs within the firm.............................................5
Total £100(over absorbed)...............................................................................................................7
Task 3...............................................................................................................................................9
P4 Advantages and disadvantage of planning tools for budgetary control.................................9
TASK 4 .........................................................................................................................................11
P5 How company is opting management accounting system...................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

REPORT
From:- Management Accounting officer
To:- General Manager of company
Subject: This report is based on management accounting that must be produce for general
manager and in this includes various methods which are available for costing. This report will
help to business in proper management.

INTRODUCTION
Management accounting is very useful for every business as it support in recording data
such as financial as well as non-financial which helps in making decisions regarding investment.
There are various companies who conduct research or survey of market for gathering
information so that they can make effective decisions that where to invest funds and how
maximum revenues can be collected. At present scenario, technologies are using by several
companies which brings effectiveness in the accounting system for the purpose of proper
maintaining records at one place (Albelda, 2011). It is must be required for every firm to make
proper decisions and adopt any changes such as new policies or procedures, create positive
working environment. This project report is based on CARWOW company which is small scale
Automobile firm and sells cars in the market. This firm is trying to adopt effective tools and
techniques for improving work performance and increase sales volume. They use appropriate
methods for management accounting report. There will be calculation of costs by using
techniques and also prepare an income statements through marginal and absorption costs. It will
define advantages and disadvantages of planning tool for budgetary control. This report will
compare management accounting system that used by organisation for financial problems.
TASK 1
P1. Different types of management accounting and its essential requirements
Management accounting is an essentials for every firm because it support in maintaining
or managing the data or information regarding sales data, raw material and fluctuation in stock
as well. These all informations are useful for business as they can analyse it for making effective
decisions. Company generally gather data regarding operational as well as costs that support in
comparing the budget expenses with real scenario. In the CARWOW, they focus on their
management accounting department for making right decisions for organisational development
by collecting relevant data. It can be seen that financial and management accounting is different
from each other (Arroyo, 2012). There are some internal system which included in MA and it
also helps in implementing the steps regarding management as well as give appropriate data or
information to the firm. These data are very useful for analysing the financial positions in the
market for the purpose of competing the competitors and make stable at marketplace.
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There are various types of management accounting such as:
Job costing system:- In any organisation, jobs or work are effective tool that contributes
more for earning higher revenues or profits. Sit may be a costs or expenses for the firm but it
very useful in getting more returns from completions of tasks. This is an effective costing system
which helps in identifying those kind of jobs that can increase higher revenue in the firm and
achieve predetermined goals or objectives. CARWOW company is focusing on providing best
services to the customers by treating them fairly so that they can satisfy to them and build a
strong relations.
Cost accounting system: This is very beneficial tool or system that support to business in
calculating real costs that gain through performance of functions of every firm. It is very helpful
in showing profitability, inventory and controlling on cost (Becker and 2010). CARWOW
company generally use this method for reducing maximum costs as well as wastages. They can
take corrective actions for minimising labour turnovers as well as increase productivity of
company.
Profit optimization system: It is the main aim of every firm that to increase profits by
running an organisation. Companies set their products or services prices according to the
customers so that they can afford for purchasing any car sin reasonable price. It is must be
required for the firm to consider consumer buying decisions process as if they do not set at
reasonable cost then customers can move to another company. There are lots of competitions in
the market who does the same business as they adopt various strategies for increasing sales
volume and generate profits as much as possible. Customers wants qualitative products in
effective price so it is the responsibility of the firm to provide best goods and services to them for
satisfying their needs or wants and meet desired expectations.
Inventory management system: Company always focus on maintaining the inventories
and stocks by using several plans or policies and also proper controlling on that. This method is
very supportive for every firm that they can make better decisions regarding production of goods
and services. CARWOW company also considered this method for maintaining their car stock
through their system (Messner, 2010). This will support in making better investment decisions
for producing new car or its model and launch in the market. There is a common issues which
usually faced by the various companies regarding overstocks as well as under stocks. If
organisation is facing under stock situation then this will lead to affect in their relations and if
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company is having overstock kind of conditions then it is also an issue that leads to more
wastages of resources because there is lack of awareness about CARWOW company in the
market so it will takes time for making customers loyal towards organisation.
On the other side, inventory control system is an software where data are recorded which
helps in tracking cars orders and deliveries of them to the customers (Schäffer, 2010). Several
companies use another methods for recording as well as data entering such as Bar Code reader,
although it helps in tracking the order of car which being taken out from showroom and its
deliver or not, so it can be analysed in this.
P2 Different methods which help in accounting report
Management accounting concept is very important in every successful organisation as it
is must be required for making appropriate decisions regarding the adoptions of strategies for
maintaining the firm and sits financial positions in the market. Senior manager or top level
management can take corrective actions for improvement of the performance of the firm by
using these records of accounting. They make strategy for higher profits as well as revenues by
proper controlling and monitoring of planning as it is an essentials for completing tasks or work
within limited time period and in effective manner.
There are some methods of accounting systems such as:
Inventory Control Reporting: It is an effective tool that support in checking the
inventories or stocks in the warehouses by the company's managers. This concept support to firm
for ensuring that their warehouses are managed in appropriate manner or not. If it is snot manage
in effective manner then it is required to improve this process so that they can maintain the
efficiency and also control on the stock. This will support to CARWOW in minimising the
chances of overstock as well as under stocks in better ways.
Application: it is very suitable method for CARWOW company as they can adopt it for
managing their stock in appropriate way. They also can analyse the warehouses at anytime for
proper management (Bennett and Schaltegger, 2013). With the help of this system, company can
measure their stock in corrective form and this will bring improvements in warehouses by record
keeping. They can satisfy to the customers by providing right products at right time and earn
more revenues or generate profits. There will be less chances of increasing wastages or costs.
Account Receivable Reporting: This accounting system is very beneficial for
controlling or managing the flow of cash within an organisation. In this, company maintain a
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records in which they shows the received payments as well as selling of products and services to
the customers in exchange of money which must be recorded on that (Zvezdov, 2013). This
report provides various information regarding consumers, date, time and delivery of particular
goods or services. It helps in minimising the consequences of cash flow of the company.
Application: This method is very useful for CARWOW company as they can manage their cash
flow as well as record the amount which has paid or received from customers. This method is
supportive in keeping records such as weekly, monthly and quarterly basis as well.
Account Payable Reporting: It is related with above method as opposite of receivable
reporting system which helps to the company in ensuring about that how much amount has been
paid by the customers and what is remaining price which support in making decisions regarding
the amount as well as build better relations among people such as suppliers and firms. This is
very effective that bring positive brand image in the market and in the eye of vendors and
customers as well.
Applications: It is very important concept that CARWOW firm can use for building strong
relations among people who take responsibility for supplying spare parts or tools for productions
of car so that they can run their business operations in effective manner. It is must be required to
make available all necessary resources so that they can perform better and achieve organisational
goals or objectives.
Performance Reporting: This aspect is more important as every business firms use this
method. It is very useful for measuring the performance of employees as well as staff members
for the purpose of ensuring productivity of the company. This system support to the organisation
in increasing the performance level for the development of the company. CARWOW company
used follow this procedures for attaining their goals and objectives in effective manner.
Company can ensure about their level or measure financial positions among competitors.
Application:- This method will be suitable for the CARWOW firm as they can use it for finding
any kinds of problems or issues that can arise while running an organisation or business
operations (Bodie, 2013). They analyse their employees performance during completions of task
or work and make decisions regarding bringing some new policies as well as procedures for
achieving particular goals objectives.
Budget Reporting: This is based on budget system of the company as they ensure about
what department is contributing more for getting revenues or profits within the company. This
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method is also known as expensive performance where organisation compare their actual cost
with estimated budgets so that they finds occurring expenses as well as unnecessary cost in an
appropriate manner (Boyns, 2013). In this technique, firm allocate funds among various
activities in better way and try to minimise the wastage or expenses so that they can achieve
higher returns for organisational development.
Applications:- This is beneficial method for CARWOW company as they can use their funds in
appropriate manner and also allocate all these among several activities for better productions of
car model. It will leads to increase customers demand in the market. Therefore, the important
thing is that utilisations of available resources for getting maximum outcomes.
Task 2
P3 Calculation of Marginal and Absorption costs within the firm
For the proper management of the company, it is required to prepare a income statement
in the accounting system that support to manage the records and financial positions. In this
includes various documents and financial data of the company so that they can make better
decisions. It is very necessary for small business enterprises. CARWOW company generally
consider this tool for managing total revenue and expenses, business courses, operating and non-
operating activities etc. all these accounts can be manage in the business for smooth running of
entire operations.
There are some methods that helps in calculating the costs and making statements such as:
Absorption cost: This method is generally use for selling and administration expenses
which must be required in the company. It also support in making income statement for
analysing the cash or amount within the firm. In this includes finished stock by consisting the
direct labour, material, money, machine, variable and fixed cost overhead. Therefore,
CARWOW company calculate its operating costs (Edwards, 2013). It is very useful in
maintaining costing criteria which is significant for the company because it support in making
adequate decisions by minimising wastages or expenses in effective manner. This method is
traditional accounting method which is used for reducing maximum wastages for getting better
outputs.
Marginal Costing: This is also called additional cost that can occur while production
process and it also affected by the fixed cost within an organisation. It is defined as the extra
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productions as well as manufacture of products and services in which occur various costs such as
variable or fixed and it must be considered in the income statement. Costs can be related with
labour, raw material and any expenses which may arise in the manufacturing process as it is
additional part of product.
The difference between marginal cost and absorption cost are as followings:
Basis of difference Marginal cost Absorption cost
Meaning This is an essential for an
organisation that helps in
decisions making process as
company can discover the total
costs of production such known
as marginal cost.
In this involved the total costs
which generally allocated to the
cost centre (DRURY, 2013).
This is used for determine the
the total cost of manufacturing
which is known as absorption
cost.
Overheads In this included variables and
fixed costs of the firm.
In this included various costs
such as administration, selling
and distribution etc.
Highlights Contributions has done on the
basis on per unit in this.
Net profits can be used on the
basis of per unit.
Cost data It present total contributions
which made on every and each
products.
It is use for presenting the
conventional things in effective
manner.
Profitability It is being measured by profit
volume ratio in concept manner.
In this included fixed costs
which can be affected and it can
be done an appropriate manner.
Cost reductions In this defined that variable costs
are those in which products cost
has considered and projects costs
are known as fixed cost.
This cost is totally different from
marginal cost, variable as well
as fixed cost that also can be
considered in the products cost.
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There is a calculations for analysing the cost of absorption and it is very effective for
making organisational decisions regarding the budgeting of the firm.
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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 amount 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)
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Administration cost: In this budget cost the £800 and Actual cost is £700
Selling cost: In this budgeted cost is £400 and Actual cost is £600
Net profit using Absorption costing £ £
Sales
(-) Cost of Sales:
Initial stock
Manufacturing (Production)
End 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 Stock Production End 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 statement, absorption methods if quite effective in comparative of
marginal costing and it is the suggestion for CARWOW company to use absorption method
rather than other. It will show positive result within an organisation. It can be concluded through
above problems that profit of firm is around £9600 with the help of marginal cost it was approx
£9300. there are the gap of £300 between both due to fixed cost within the firm. On the other
side, marginal costing is showing profits after having some reduction in the fixed cost.
Task 3
P4 Advantages and disadvantage of planning tools for budgetary control
Budget is defined as the impressive documents that generally consist with detailed
information by considering the actual facts and figures of the research (Harris, 2012). It is an
effective tool that helps in identifying the various costs and expenses within the company and
also support in making appropriate decisions regarding investing for qualitative products and
services. This can be a comprehensive criteria for producing a plan regarding capital investment
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in the operational department. It is produced in the single year and also followed by various
companies. CARWOW company consider this as their shareholder follows which is very
supportive in achieving desired results within the firm. It is generally based on proper planning
of sales and income which engage in producing goods and services in an effective manner.
Budget control: This method is very effective which is used by several companies as the
management carry out various business operations such as planning, cooperation and assessment
as well (Durden, 2012). It is linked with various numbers of business activities or parts that
classified the budget among different sections. There are some processes defined such as:
Suggestion for concern manager: This must be necessary for having appropriate data or
information regarding business operations so that they can manage the entire production process
and also handle the cost.
Implement the suggestion: There must be proper management as managerial feedbacks
can be gathered by manager for better designing and accuracy and it will support in preventing
the firm from any external losses.
Planning tools: this is very beneficial for determining the company's aims and objectives
and ensure about the future directions for the attainment these goals. Forecasting tool: this tools is totally based on practically assumptions by encouraging
the management skills, learning with appropriate decisions making process.
◦ Advantages: In this, it is necessary for identifying the goals and objectives of the
firm. It also support to the managerial team for predicting actual costs and sales that
must be under taken in coming time period.
◦ Disadvantages: There should be proper estimations of various costs or expenses
because absence of this, unnecessary costs can be occurred and if it is more than cost
then this will be affect on the business and its goals. Scenario tools: This method is very beneficial for every firm and CARWOW company
can considered their closed substitute which is depends on the situational demand
(Herzig, 2012). This also based on planning, functioning as well as operational of an
organisation.
◦ Advantages: This is very useful tool for the firm as they can implement their ideas,
opportunities and various successful procedures.
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◦ Disadvantage: It may not be good or suitable for selected firm because of lack of
accuracy and this can be time consuming process so it is required more time for being
done.
TASK 4
P5 How company is opting management accounting system.
Management accounting is an system in which manager has authority to provision of
accounting or financial data priorly in order to perform better results before discuss within
organisation , which helps manager in management and performance of organisation through
their control or responsibilities (Otley, 2013). This system is also known as managerial
accounting system. This system provide assistance in identifying financial issues and problems
and also support manager to overcome these issues and threats by providing solutions in a very
scientific and effective manner. However, the organisation CARWOW had adopt and implement
the managerial or management accounting system within their organisation. By adopting and
implementing this system, CARWOW allowed changes within their organisation environment
which helps in competing with their competitors.
CARWOW AUTOEBID
This CARWOW is one of UK trusted firm in
the field of providing new cars directly
different franchise dealers (Parker, 2012).
This organisation is older than CARWOW
which is also trusted firm in the field of buying
car through reverse auction.
This is the speciality which differentiate
CARWOW from its competitor that is delivery
of its products an services to its customers
within given time period approximately 3-4
weeks.
This firm has great strength of employees but
lack of management which affect on delivery
cars and its products to customers.
CARWOW is an trusted platform at which
customers have opportunity for comparing
products from top local and national dealers
and get the car which customers from the
In AUTOeBID firm, no option for customers
to directly interact with different franchise and
compare products with prices. Their system is
not as much as fruitful for its customers as
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dealer which customer like the best at right
price which suits for customer.
CARWOW have.
They provide offline with online platform
facility to all its customers to get information
about its products, car dealer, location,
comparison between different franchise which
save lots of time and money of its customers.
AUTOeBID firm also deals their customers at
online platform but all information which is
required for customers if not available on its
website or platform in a very concise and
fruitful manner which customers needs.
However, CARWOW is adopting and implementing latest world class technologies and
equipments which is essential in this competitive world for competing with its rivalry's.
Whereas, AUTOeBID is not upgraded its technology and equipments which is required in
today's high tech world.
Profitability: It is the main objectives of every firm for achieving set targets or goals and
they work hard for getting success in the competitive market. Every organisation wants to
increase it profit through managing entire business operations it can be measure through the
factor of production as if cost increase then profitability will be decreases and productivity also
will be reduced due to increasing costs (Suomala, 2014). Therefore, company make appropriate
decisions for adopting of various technologies and strategies so that they can earn higher profits
through utilisation of available resources. It will support in providing the structure of under stock
and overstocks.
Price: It is the responsibility of the company to set their products and services price at
lower level so that many of customers can be attracted towards organisational goods. Consumers
can take buying decisions about particular products and services as per reasonable price.
CARWOW company also focus on pricing their car at lower price and provide better quality of
products to the customers.
Performance appraisal: Employees play crucial role in increasing sales volume. In the
CARWOW, skilled persons are working in appropriate manner. Company also focus on
increasing their performance level through providing various training and development programs
to them so that they will contributes in earning profits of an organisation. They use appraisal
method for measuring individual performance in effective manner.
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Benchmarking: Company generally use benchmarking techniques for getting best results
within the firm. CARWOW company also considered this as they set the benchmark for their
employees which support in achieving target by completions of task according to set standard of
performance.
Key performance indicators: it is an essential for making effective decisions regarding
choosing criteria for attaining goals and objectives in appropriate manner (Vakalfotis, 2013). It
can be categorise into two form such as high level KPI and lower level KPI. High level focus on
performance of the enterprise and lower level concentrate on the various activities within the
department which can be considered as the sales and marketing etc.
CONCLUSION
From the above project report, it has been concluded that management accounting is an
effective tool for every organisation as small and large firm. This is helpful for managing the day
to day operations and business performance. Project used various budgetary tools for
maintaining records and also control on the expenses within the company. These tools and
techniques support in solving financial problems and also get maximum profits or revenues for
the development of company's productivity. CARWOW company considered various methods of
management accounting for managing their data or information in appropriate manner and it
support in achieving goals and objectives.
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REFERENCES
Books and Journals
Albelda, E., 2011. The role of management accounting practices as facilitators of the
environmental management: Evidence from EMAS organisations. Sustainability
Accounting, Management and Policy Journal. 2(1). pp.76-100.
Arroyo, P., 2012. Management accounting change and sustainability: an institutional approach.
Journal of Accounting & Organizational Change. 8(3). pp.286-309.
Becker, S.D., Messner, M. and Schäffer, U., 2010. The evolution of a management accounting
idea: the case of beyond budgeting.
Bennett, M.D., Schaltegger, S. and Zvezdov, D., 2013. Exploring corporate practices in
management accounting for sustainability (pp. 1-56). London: ICAEW.
Bodie, Z., 2013. Investments. McGraw-Hill.
Boyns, T. and Edwards, J.R., 2013. A history of management accounting: The British
experience(Vol. 12). Routledge.
DRURY, C. M., 2013. Management and cost accounting. Springer.
Harris, J. and Durden, C., 2012. Management accounting research: An analysis of recent themes
and directions for the future. Journal of Applied Management Accounting Research.
10(2). p.21.
Herzig and et. al. 2012. Environmental management accounting: case studies of South-East
Asian Companies. Routledge.
Kihn, L.A., 2010. Performance outcomes in empirical management accounting research: Recent
developments and implications for future research. International Journal of
Productivity and Performance Management. 59(5). pp.468-492.
Kotas, R., 2014. Management accounting for hotels and restaurants. Routledge.
Lukka, K. and Vinnari, E., 2014. Domain theory and method theory in management accounting
research. Accounting, Auditing & Accountability Journal. 27(8). pp.1308-1338.
Macintosh, N. B and Quattrone, P., 2010. Management accounting and control systems: An
organizational and sociological approach. John Wiley & Sons.
Otley, D and Emmanuel, K. M. C., 2013. Readings in accounting for management control.
Springer.
Parker, L.D., 2012. Qualitative management accounting research: Assessing deliverables and
relevance. Critical perspectives on accounting. 23(1). pp.54-70.
Suomala, P., Lyly-Yrjänäinen, J. and Lukka, K., 2014. Battlefield around interventions: A
reflective analysis of conducting interventionist research in management accounting.
Management Accounting Research. 25(4). pp.304-314.
Vakalfotis, N., Ballantine, J. and Wall, A.P., 2013. A literature review on the impact of
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Van der Stede, W.A., 2011. Management accounting research in the wake of the crisis: some
reflections. European Accounting Review. 20(4). pp.605-623.
Vasile, E. and Man, M., 2012. Current dimension of environmental management accounting.
Procedia-Social and Behavioral Sciences. 62. pp.566-570.
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