Management Accounting - Unicorn Retail Ltd

Unit 5
MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...............................................................................................................1
TASK 1...............................................................................................................................1
P1 Management Accounting and essential requirements of different types of
management Accounting systems............................................................................1
P2 Different methods used for management Accounting reporting .........................3
TASK 2...............................................................................................................................5
P3 Calculate the costs by using absorption and marginal costing and compare the
two management accounting techniques..................................................................5
TASK 3...............................................................................................................................7
P4 Advantages and disadvantages of different types of planning tools used in
budgetary controls of Unicorn...................................................................................7
P5 How Unicorn Retail Ltd adapts the management Accounting systems to respond
the financial problems.............................................................................................12
CONCLUSION.................................................................................................................13
REFERENCES................................................................................................................15

INTRODUCTION
Management Accounting includes financial information which is used by the
organisation for taking decision-related to development and betterment of organisation
in the future. It helps management in decision making and also in plans and strategies
related to the operations and performance of the business. This type of accounting is
performed by managerial Accountants.
Unicorn retail Ltd the small-medium enterprise operated in the retail sector having
a limited number of employees and has fewer turnovers. This report consists of the
meaning and essential requirements of different management Accounting systems in
the Unicorn retail Ltd. We also discuss different methods used for management
Accounting reporting. Then Income Statement is also prepared by using proper cost
analysis techniques.
There are advantages and disadvantages of different types of planning tools
which are used in the budgetary control of Unicorn and at last we discuss how Unicorn
adopt the management Accounting systems to solve different financial problems of their
business.
TASK 1
P1 Management Accounting and essential requirements of different types of
management Accounting systems
Management Accounting is a process of Accounting perform by management or
managerial Accountants. They analysis Accounting and financial information of
organisation and then prepare a report to help the management to make plans and
policies related to operations of a business and also help them in decision making. In
this Accounting senior management appointed managerial Accountants to analyse the
environment of organisation and collect the financial information and data. This
information and estimates are essential for decision making and for making plans for
the day to day operations and plans related to developments of business in the future.
The managerial Accounting main aim is to provide the appropriate information to
the managers by examining the different processes of Unicorn and there results and

determines ways how to increase profits with lower costs and optimum utilisation of
resources. There are different types of management accounting systems which are
used in different situations. These systems include the followings: Cost Accounting system: This also called product costing systems or costing
systems. It is a system of Accounting used by Unicorn to estimate their costs of
products and services. This includes the evaluation of cost types, cost centres
and in cost unit accounting. This was done by them to determine the profits of the
enterprise, for valuation of inventories and to take measures to control the cost of
Unicorn (Romano, 2015). The cost controls by taking measures to reduce
wastage of resources. There are two main Accounting systems job order costing
and process costing. Inventory management systems: Inventories are the stock of an organisation
which includes the raw material stock, stock work in progress and the products
and services ready to sell to the customers. This system of management
Accounting used to create purchase order, receiving the inventories then relocate
it, adjust it as per there requirements and then sold it to the customers, create
sales orders, packing and shipping, counts of inventories, then creating reports
on inventories and for printing bar-codes label on products and services (Sehgal,
2017). This is very important in inventory controls works in the warehouses and
in production rooms. Inventory controls can be done by keeping records of
inventory levels all the time and make inventories available when there is less or
under stock and restrict the flow of inventories when there is over stock. With
help of this proper updating of inventory level help in making inventory decisions
more efficiently and effectively. Job costing system: This type of system helps in determining costs associated
with a specific type of jobs related to production and related to specific services.
This information is required when the cost information is to be submitted to the
customers. Job costing systems help in evaluating three types of information
which includes direct materials, direct labour and overhead costs (Mauro,
Cinquini and Grosse, 2016). This gives a report of costs of each job so that the