Contemporary Accounting Research Review

This assignment presents a review of various contemporary research articles within the field of management accounting. The papers explore diverse themes, including the impact of lean manufacturing practices on firm performance, management accounting's role in small and medium-sized enterprises (SMEs), sustainability integration within accounting systems, and the challenges faced by public sector organizations in adopting modern accounting techniques. The review also delves into theoretical perspectives such as contingency theory and embedded agency within the management accounting profession.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author’s Note:

1MANAGEMENT ACCOUNTING
Table of Contents
Executive Summary:..................................................................................................................2
Assessment Task Part: A............................................................................................................3
Requirement a:.......................................................................................................................3
Requirement b:.......................................................................................................................4
Requirement c:.......................................................................................................................4
Assessment Task Part: B............................................................................................................5
Requirement a:.......................................................................................................................5
Requirement 2:.......................................................................................................................6
Sales revenue generation under existing plan of club:...............................................................7
Sales Revenue under New Membership Plan:...................................................................8
Effect on Sales Revenue & Cash Flow:.............................................................................9
Requirement 3:.......................................................................................................................9
Conclusion................................................................................................................................10
References and Bibliography list:............................................................................................11

2MANAGEMENT ACCOUNTING
Executive Summary:
Over the last few decades, there has been significant increase in management
accounting importance to business. Users of financial statements are provided with the
financial information of companies with the help of financial accounting tools. Nonetheless,
it is not considered relevant effective and relevant in decision making process and evaluation
of overall financial performance of organizations. Such issues can be resolved using the
application of management accounting. Potentiality of any business can be measured using
the management accounting tools and taking managerial decisions (Cooper et al. 2017).
Some of the analysis techniques used in the management accounting are techniques of
activity based costing, make or buy analysis and relevant cost analysis.
Tools and techniques can be classified under several heads as per the purpose and
functions of organization (Suomala et al. 2014). In this particular assignment, two method of
management accounting are discussed that incorporates cash flow analysis and cost
accounting.
Cost accounting is the technique that is used by organization for determining the
process, products and cost associated with any project. It helps in reporting of correct
amounts of costs in the financial statements and assist management in controlling, planning
and ultimately making decisions. It considers several tools and techniques for the
computation of cost of products and services that are rendered by organization. Assessment
of input costs help company in capturing cost of production allocation of overhead expenses
of any particular product can be done by company using the tools of cost allocations. Activity
based cost is the most popular method of costing compared to all other techniques are they
are used by companies on wider scale (Granlund and Lukka 2016). With the help of this
costing method, this particular costing method helps in accurately allocating the overhead
costs and appropriate determination of cost of products. Descriptions of allocation of

3MANAGEMENT ACCOUNTING
overhead expenses are done in the first part of assessment and allocation is done as per the
benefits derived from the allocation of overhead expenses from several activities.
Cash flow analysis is explained and discussed in the second part of assignment.
Business will be able to effective manage the cash flow associated with business and the
potentiality of new plan can be effectively measured using this particular technique. Analysis
of cash flow of organization helps in examination of outflow and inflow of cash in any
business during specific period (Fullerton et al. 2014). Analysis of cash flow starts from
staring balance and thereafter an ending balance is generated for all the expenses paid and
cash receipts that are used for financial reporting.
Assessment Task Part: A
Requirement a:
Activity Activity
Cost
Activity Driver Annual
Quantit
y
Cost per
Unit of
Activity
Process Receivables $15,000 No. of Invoices 5000 $3.00
Process Payables $25,000 Nos. of Purchase
Orders
2500 $10.00
Program Production $28,000 Nos. of Production
Schedule
1000 $28.00
Process Sales Order $40,000 Nos. of Sales Order 4000 $10.00
Dispatch Sales Order $30,000 Nos. of Dispatches 2500 $12.00
Load Mixers $14,050 Nos. of Batches 1000 $14.05
Operate Mixers $45,900 Nos. of Kilograms 200000 $0.23
Clean Mixers $6,900 Nos. of Trays 1000 $6.90
Move mixture to filling $3,450 Nos. of
Cakes/Pastries
200000 $0.02
Clean Trays $20,000 Nos. of Trays 16000 $1.25
Fill Trays $16,000 No. of
Cakes/Patries
800000 $0.02
Move to baking $8,000 No. of Trays 16000 $0.50
Set up Oven $50,000 No. of Batches 1000 $50.00
Bake Cake/Pastries $1,30,00
0
No. of Batches 1000 $130.00
Move to Packing $40,000 No. of Trays 16000 $2.50

4MANAGEMENT ACCOUNTING
Pack Cake/Pastries $80,000 No. of
Cakes/Patries
800000 $0.10
Inspect Patries $2,500 No. of Pastries 50000 $0.05
Requirement b:
Bill of Activities:
Activity Consumed Annual
Quantity of
Activity
Driver
Cost
per
Unit of
Activit
y
Total
Cost
Process Receivables 500 $3.00 $1,500.00
Process Payables 200 $10.00 $2,000.00
Program Production 100 $28.00 $2,800.00
Process Sales Order 400 $10.00 $4,000.00
Load Mixers 100 $14.05 $1,405.00
Operate Mixers 30000 $0.23 $6,885.00
Clean Mixers 100 $6.90 $690.00
Move mixture to filling 30000 $0.02 $517.50
Clean Trays 2000 $1.25 $2,500.00
Fill Trays 100000 $0.02 $2,000.00
Move to baking 2000 $0.50 $1,000.00
Set up Oven 100 $50.00 $5,000.00
Bake Cake/Pastries 100 $130.0
0
$13,000.0
0
Move to Packing 2000 $2.50 $5,000.00
Pack Cake/Pastries 100000 $0.10 $10,000.0
0
Dispatch Sales Order 500 $12.00 $6,000.00
Develop & Test Product $600.00
Total Overhead Cost $64,897.5
0
Annual Volume 100000
Cost per unit for
Lamington
$0.65

5MANAGEMENT ACCOUNTING
Requirement c:
All the costs discussed above are referred to as overhead costs, such costs are costs
that are incurred indirectly by business, and this helps in supporting the distribution and
production process. Nevertheless, an organization can have many associated direct costs that
has not been explained and mentioned in the case study provided. Costs are directly
attributable manufacturing and production of any goods in the business or for any services
rendered are regarded as direct cost. Cost of production incorporates one of the important
elements that are overhead cost as business without incurring such costs will not be able to
manufacture the goods (Thomas 2016). Therefore, it is essential to take into account costs
that are incurred directly for computing the cost of products of Lamington. Some of the direct
costs that are incurred by Lamington for the computation of product cost are listed below and
they are as follows:
 Freight Inward Charges
 Direct Material Costs
 Direct Labour Costs
Assessment Task Part: B
Requirement a:
According to the case study, two sources are used by HLW to earn money and this
comprise of court fees and fees generated by annual membership. Within the initial two
months of accounting period, annual membership generates almost 40% of total revenue.
However, cash generated from court fees in every month was uneven. Fees generated from
court fees is higher during the peak season that is from October to April and total fees
generated stood at 45% of total revenue amount. However, lower amount of fees generated

6MANAGEMENT ACCOUNTING
from the month of May to September and this amount comprise of 15% of total revenue
amount.
Implementation of new membership plan during the new accounting period by HLW
will help in generation of revenue of almost 80% of total revenue at the initial stage itself.
Some of the advantages from the implementation of this plan are as follows:
 Organization will have a built in platform with the implementation of the new plan
that would provide assistance in generating even and steady cash flow throughout the
year in every month.
 There can be unrestricted flow of cash from operating sources with the
implementation of plan in the form of annual membership (Taylor and Scapens 2016)
In the current scenario, club is relying on individual programs that help in earning
almost half of total revenue.
 Furthermore, under the new plan within the first month, there can be accumulation of
80% of total revenue by the club management. Hence, club need not wait for six
months. Therefore, it will help them in taking wise financial decisions and appropriate
utilization of funds that have been accumulated.
Requirement 2:
The given case study does not provide with the clarification of some of the issues.
Therefore, for the determination and evaluation of impact of new plan on the revenue
generated from sales comes with the below listed assumptions and they are as follows:
 It has been assumed that 60% of capacities are utilized during the non-prime task in
peak season.
 Usage of court is assumed to be 100% in the peak season prime time.

7MANAGEMENT ACCOUNTING
 Earnings of club from the court fees are assumed to be 40% of court usage during off
season.
Sales revenue generation under existing plan of club:
Annual Membership Revenue:
Particulars Weightag
e
No. of
Members
Annual
Membersh
ip Fees
Total
Fees
Total Members 100% 2000
Individual Members 25% 500 $45 $22,500
Student Members 25% 500 $30 $15,000
Family Members 50% 1000 $100 $1,00,00
0
Total Membership Fees $1,37,50
0
Total Court Fees:
Particulars Hourly
Court
fees
No of Courts No. of
Days
Usage % Hours Total
Fees
Peak Season- Prime
Time
8 10 181 100% 4 $57,920
Peak Season- Non
Prime Time
12 10 181 60% 8 $1,04,25
6
Off Season 6 10 184 40% 12 $52,992
Total Court Fees $2,15,16
8
Total Sales Revenue Earned:
Particulars Amount Weight age
Membership Fees $1,37,50
0
38.99%
Court Fees - Peak $1,62,17 45.99%

8MANAGEMENT ACCOUNTING
Season 6
Court Fees - Off Season $52,992 15.03%
Total Fees Collected $3,52,66
8
100%
Sales Revenue under New Membership Plan:
The expectation of club under new membership plan is to earn sales revenue as
depicted in the table below:
Revenue generated from prior Membership:
Particulars Current
Member
% of
Continuatio
n
% of Active
Members
Annual
Fees
Total
Fees
Individual 500 70% 45% 250 $39,375
Student 500 70% 45% 250 $39,375
Family 1000 70% 45% 450 $1,41,75
0
Total Fees from Early
Membership
$2,20,50
0
Revenue generated from General Membership:
Particulars Current
Membe
r
% of
Continuatio
n
% of
General
Members
Annual
Fees
Total
Fees
Individual 500 70% 55% 250 $48,125
Student 500 70% 55% 250 $48,125
Family 1000 70% 55% 450 $1,73,25
0
Total Fees from Normal
Membership
$2,69,50
0
Total Sales Revenue Collected:

9MANAGEMENT ACCOUNTING
Particulars Amount Weightage
Membership Collected:
August-September $2,20,50
0
34.45%
October $2,69,50
0
42.11%
March $1,50,00
0
23.44%
Total Membership $6,40,00
0
100.00%
Effect on Sales Revenue & Cash Flow:
Table below provides with the impact of new membership plan on sales revenue that
are periodic:
Particulars Current
Plan
New Plan Increase/
(Decrease)
Revenue:
Pre-Received (Aug-Sep) $0 $2,20,500 $2,20,500
October-April $2,99,67
6
$4,19,500 $1,19,824
May-September $52,992 0 -$52,992
Total Membership $3,52,66
8
$6,40,000 $2,87,332
As depicted from the table above that implementation of new plan will help in
increasing sales revenue by amount $287,332. It can also be stated from the computation of
above figures that lion shares of expected sales can be generated by club within the month of
October.
Requirement 3:
New membership plan of chub generated higher sales revenue compared to existing
plan. Some of the factors assisting in plan evaluation are listed below:

10MANAGEMENT ACCOUNTING
 Under the new plan, there will not be any generation of court fees; however, it will be
possible to collect the fees within first or second month. Therefore, it can be helpful
on part of management in preparing periodic recording of revenue and reducing the
cost of collecting court fees. Evaluation process can incorporate such reduction in
costs (Lavia and Hiebl 2014).
 The existing membership fees are lower than the fee under the new plan and there is a
possibility that it will lead to loss of members. Such higher fees might not be
affordable mainly by students who are not financially independent and it will be
difficult for them to have the renewal of their membership plan. Therefore, it would
be better to seek feedbacks about the new plan regarding its fees and at the same time,
benefits should also be explained to them. Feedback would help in getting proper
feedback for evaluating the outcome of the plan.
 Promotion of plan should be accompanies by conducting campaign by club and while
evaluating the plan outcome, this cost of promotion should be incorporated along
within the cash flows and net revenue generated.
 It is perceived by management of club that new member will be able to replace the
members who have been lost. As per the expectation, it is also ensured that losses are
fulfilled because otherwise, their expected revenue generation will not be achieved.
Conclusion
From the above discussion, it can be inferred that activity based costing provide with
benefits in terms of activities and operations of business of Lamington. Cause and effect of
business can be easily established with the implementation of this particular costing method.
Users will be able to analyze and understand the costing techniques in better way as it reveals
the accuracy of costs. It can be concluded that business owner are able to derive benefits in
terms of better and informed decision making. Furthermore, organization has been able to

11MANAGEMENT ACCOUNTING
arrive at better decisions with the analysis of cash flow statements. Implementation of new
membership plan would provide business with several benefits and is capable of generating
more business.

12MANAGEMENT ACCOUNTING
References and Bibliography list:
Cooper, D.J., Ezzamel, M. and Qu, S.Q., 2017. Popularizing a management accounting idea:
The case of the balanced scorecard. Contemporary Accounting Research.
Fullerton, R.R., Kennedy, F.A. and Widener, S.K., 2014. Lean manufacturing and firm
performance: The incremental contribution of lean management accounting
practices. Journal of Operations Management, 32(7), pp.414-428.
Gholami, S., Hariri, M. and Akbari, P., 2014. Innervation and moan review process, from the
perspective of law, and knowledge of management accounting.
Granlund, M. and Lukka, K., 2016. Investigating highly established research paradigms:
Reviving contextuality in contingency theory based management accounting
research. Critical Perspectives on Accounting.
Horton, K.E. and de Araujo Wanderley, C., 2016. Identity conflict and the paradox of
embedded agency in the management accounting profession: Adding a new piece to the
theoretical jigsaw. Management Accounting Research.
Lavia López, O. and Hiebl, M.R., 2014. Management accounting in small and medium-sized
enterprises: current knowledge and avenues for further research. Journal of Management
Accounting Research, 27(1), pp.81-119.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability
assessment, management accounting, control, and reporting. Journal of Cleaner
Production, 136, pp.237-248.
McLean, T., McGovern, T. and Davie, S., 2015. Management accounting, engineering and
the management of company growth: Clarke Chapman, 1864–1914. The British Accounting
Review, 47(2), pp.177-190.

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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.
64-82). Elsevier.
Nuhu, N.A., Baird, K. and Bala Appuhamilage, A., 2017. The adoption and success of
contemporary management accounting practices in the public sector. Asian Review of
Accounting, 25(1), pp.106-126.
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.
Taylor, L.C. and Scapens, R.W., 2016. The role of identity and image in shaping
management accounting change. Accounting, Auditing & Accountability Journal, 29(6),
pp.1075-1099.
Thomas, T.F., 2016. Motivating revisions of management accounting systems: An
examination of organizational goals and accounting feedback. Accounting, Organizations
and Society, 53, pp.1-16.
Van der Stede, W.A., 2015. Management accounting: Where from, where now, where
to?. Journal of Management Accounting Research, 27(1), pp.171-176.
Van der Stede, W.A., 2016. Management accounting in context: Industry, regulation and
informatics. Management Accounting Research, 31, pp.100-102.