Management Accounting Research Analysis

The provided document is an analysis of several management accounting research papers. It includes studies on interest in the management accounting profession, environmental management accounting adoption, changes in management accounting practices, and the usefulness of accounting information systems. The summary will provide specific details about each study, including their findings and contributions to the field.

Management Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explaining the management accounting and its essential types........................................1
P2 Determining various kinds of reports techniques used by Toyota plc in context with
management accounting.........................................................................................................3
M1 Evaluating benefits of management accounting systems and their application within
Toyota.....................................................................................................................................4
D1 Critically evaluating how management accounting systems and management accounting
reporting are integrated within process of organisation.........................................................5
TASK 2............................................................................................................................................5
P3 Analysing the profitability of Toyota plc with the help of two costing measurements....5
TASK 3............................................................................................................................................7
P4 Identification of planning tools and budgetary techniques as well as their pros and cons for
Toyota plc...............................................................................................................................7
P5 Identification of techniques to overcome with economical problem in Toyota plc.........9
M4 Analysing how these techniques will be leading to sustainable success of organisation.10
D3 Evaluating how planning tools will be accounting to solve the financial problems......10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The importance of implicating management accounting techniques in an organisation is
helpful in terms of making satisfactory changes in the operations as well as enhancing the
efficiency of the entity. For this, transactions belong to all the operational activities in the firm
such as purchase, production, sales, marketing etc. which are to be recorded in the books and
then summarised as well as analysed by the accounting professionals. The outcomes from such
analysis will be very helpful for them in terms of making suitable changes in the operations,
planning and forecasting the budgets of such activities. In the present report, there will be
discussion based on accounting operations in Toyota Plc as well as the managerial professionals
will be suggested to make required changes in the operations of the firm.
TASK 1
P1 Explaining the management accounting and its essential types
To enhance the operational performance of Toyota Plc, there are various tools and
techniques that will be helpful for the managers in terms of making adequate increment in the
profitability and growth of the entity (Management accounting, what is management
accounting?., 2018). However, there are several techniques and methods that will be helpful in
bringing the accuracy in decision making and planning for the business prospective. There are
several types of accounting such as:
Financial Accounting: In accordance with the operations made by the firm during the
period which will be presented in the various accounts and statement for the period. There will
be financial disclosure of such data set in the income statement, balance sheet, cash flow
statement and changes in equity (Givoly and et.al., 2017). Therefore, the fruitfulness of such
accounting disclosure will be helpful for Toyota plc in context with having stable operations,
capital generation as well as planning for the business expansion.
Auditing: These are the essential tools for the management in terms of making suitable
plans for business development. Here, the accounting professionals or auditors of the firm make
analysis over the accounts and present the necessary details regarding profits, costs and expenses
made Toyota plc during such period (Hopper and Bui, 2016).
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Cost accounting: These are the techniques which will be performed as per assigning the
costs to each particular department and operation of Toyota plc. Therefore, it helps in analysing
the requirements of funds for performing the tasks as well as revenue gatheredby them (Laudon
and Laudon, 2016). In this regard, the managers will make efficient decision and propose
techniques to reduce the costs as well as increase funds for the specific piece of operations.
Taxation: This method is helpful for the government in revenue generation and making
the development of the economy. Therefore, in every period, the company has to make the
payments of taxes such as corporate taxes, custom duties and various taxations levied over
transactions of the products and services (McCartney, Pierce and Mackie, 2016). Toyota Plc
must disclose the amount of taxes being paid by them in the accounting year therefore, it will be
helpful for the government, taxation authorities and the banks to analyse the tax payments as
well as revenue gathered by the organisation.
Budgetary accounting: In these techniques, here the managerial professional and the
accountant of the firm analyse the operation in each department. They analyse the required
amount of funds for the completion of tasks and operations in such units. Furthermore, they
make planning and budgets for them which help the firm in having better financial operations as
well as better revenue generation (Turner, 2014). Thus, it can be said that making budgets will be
beneficial for Toyota Plc as the expenditures are required to be made in the decided limited,
which will help in proper utilisation of funds and resources.
Debtors ageing period: This is the period which helps in analysing the payment received
by consumers and stakeholders of the firm in required duration. Therefore, with the help of such
analysis, it can be said that the firm become able to analyse adequate payments made by the
professionals in terms of making the payments of the operations (Kerzner, 2013). However, in
this case, Toyota Plc will have proper record of its debtors and the amount of granted money to
them. It will be helpful for them in terms of having the instalment amounts over the vehicle
which is being purchased by the buyers.
Job costing: These technique helps in setting the limit over the operational activities in
the industries such as manufacturing, production, sales etc. thus, such limited are belongs to
analysing the costs and finance need for the completion of tasks. The costs' estimation belongs to
determine the profitability of such activities in the growth Toyota plc (Givoly and et.al., 2017). If
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the managerial professionals do not find such operations very healthy then they will make
changes in the costing techniques and then they reduce the level of funds for such operations.
Price optimisation: This method helps in generating the adequate amount of revenue
from the sales of the products. Here, the managers in Toyota plc will analyse consumer reaction
over each vehicle and the most preferable prices paid by them (Hopper and Bui, 2016). Thus,
this technique will help them in analysing adequate rates over the vehicle and then they will plan
costs decisions over such operational activities.
Inventory management: all the raw materials and stocks which are kept and used by
company in preparing of the final goods and products are known as the inventory. So this
becomes quite important to mange, control, store and use that material which will be helping
company in forming or manufacturing products (Bennett, Schaltegger and Zvezdov, 2011). The
method of managing and ordering raw materials is knowns as inventory management.
Major functions of management accounting-
The functions of management accounting included:
Forecasting and planning for whole year or financial period in form of collecting important
information and data analysing so that profits and sales could be forecasted.
Organising is also done of the available data which was collected which will then be helping the
management in separating human ad non human resource which is available.
Coordinating of the efficiency of organisation and also maximising all kind of profits which it
want to achieve.
Controlling Performance which is done with the help of standard costing, budgetary control,
accounting ratios and fund flow statements.
Basis Management accounting Financial accounting
Users All the managers and
employees who are working in
company
External users
Time focus Future Past or historic data is used
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Verifiability Satisfaction of need of
management
Emphases on judgement and
origin of documentation.
Subjects Segment reporting Company wide report
P2 Determining various kinds of reports techniques used by Toyota plc in context with
management accounting
Management accounting reports will be helping business and its owners in monitoring
performance of company so they are prepared throughout accounting period. Depending upon
type of project and time sensitivity of information the manager or owner could also ask for
reports on quarterly or monthly basis as well (Boyns and Edwards, 2013). This reporting will be
helping both big and small enterprises in monitoring there and their performance of company
various types of management accounting reports which Toyota plc will be preparing are as
follows:
Budget report- according to the previous years spending or expenditure and the profits the
budget of this current year would be prepared. This will be including budget or total expenditure
of all different departments of Toyota including manufacturing, production, marketing, sales,
research and development. This budget will also be including all source of revenue and
expenditure of different departments of Toyota which will be according to goals and objectives
need to be accomplish. If the revenue of last year are low and expenditure of last year are high
then this will be including for saving money and finding new suppliers of company as well
(Endenich, Brandau and Hoffjan, 2011). This will in tern help in increasing sales and decreasing
expenses so that budgets are not consuming more time and efforts in its preparation.
Accounts Receivable ageing- this report will b including how long a customer is holding money
of company and when is due date of his repayment or instalment. This accounts report will be
including separate columns for debtor who are having more late than 30 days or 90 days. As the
management is having or preparing this report they would be having clue of what and where is
the problems relating to collection procedures of company (Fowzia, 2011). This will in tern
helping them to solve issues which will be prevailing within Toyota for longer duration of time.
Like if there are many numbers of customers who are not been able to give their amount to
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Toyota then company need to tighten their credit policy. Company must also be analysing this
report on periodical basis so that they are keeping track of all the old and new debt.
Job cost reports- this report will be prepared in showing the expenditure of all specified. Then
after the cost or expenditure of all projects company will be evaluating job profitability. Thus, all
higher earning or area which will be having spending more on its projects could be taken out.
That project which is spending more on its business need to be brought under control so that
there are fewer expenses (France, 2010). Job cost report means making reports as according to
specified project or department which they are incurring and whichever is higher among all must
be kept under supervision. This is most efficient in cost controlling and less amount of spending
or expenditures will also occur.
Inventory and manufacturing- this will be most effective report which would be used by Toyota
as will be helping in managing all physical inventory and thus making management process more
efficient. Inventory and manufacturing report would be covering all parts which are related to
stocks like that of wastage, per unit overhead cost, labour cost per hour (Hammad, Jusoh and
Ghozali, 2013). Thus, in tern helping for controlling the wastage of inventory and manufacturing
so that corrective actions could be taken in future time period.
M1 Evaluating benefits of management accounting systems and their application within Toyota.
Management accounting system will be helpful for Toyota as they could track and report
financial information so that owner could review them. This also help in reducing expenses as if
they are reviewing the cost then cost of economic resources will be under control. The cash flow
within company will also be improved as Toyota would be preparing budgets for further
expenditure (Harris and Durden, 2012). Decision making procedures of business will also be
improved as management will be having information which is of whole business.
D1 Critically evaluating how management accounting systems and management accounting
reporting are integrated within process of organisation.
Management accounting system- this is the process of keeping and recording all information
which are necessary for business and thus will be helping in formulating business decisions. This
is integrated within organisation by the help of management and employee of Toyota.
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Management accounting reporting- while this is the procedures of reporting ot management
what are expenditure and expected revenue for the period. This will also be integrated within
organisation by help of management and employee of Toyota.
TASK 2
P3 Analysing the profitability of Toyota plc with the help of two costing measurements
Marginal costing:
Income statement for marginal costing Amount
sales revenue 1500* 200 300000
Cost of sales
Direct material 2000*45 90000
Direct labour
Machining dept. 2000/100*5 hr* 5 500
Finishing department 2000/20*4*6 2400
Dispatch department 2000/20* 1 hr*5 500
Packing boxes 1500*0.05 75 93475
Total Variable costs (2000 units)
Less: Closing stock
Cl. stock of unpacked 400 180580 -87105
Cost of packed units 1500 -21776.25
Cost of sales -108881.25
Contribution 191118.75
Less:
Fixed Over heads
Less: Machining dept. 2000/100*5 hr*7 700
less: Finishing dept. 2000*5 10000
Less:Dispatch Dept 1500*1 1500 12200
Gross profit 178918.75
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WN 3
Direct material 2000*45 900000
Direct labour
Machining dept. 2000/100*5 hr* 5 500
Finishing department 2400
Total 902900
Total production 2000
Total Units 400
Total unpacked cl. Stock 180580
WN 4
Cl. stock for packed units -87105
Total packed units 1600
unpaked 400
Total cl. Stock for packed units -21776.25
Absorption costing:
Income statement for absorption cost Amount
sales revenue 1500* 200 300000
Less: costs of sales
Direct material 2000*45 90000
Direct labour
Machining Dept. 2000/100*5 hr* 5 500
Finishing department 2000/20*4 hr*6 2400
Dispatch department 2000/20* 1 hr*5 500
Packing boxes 1500*0.05 75 93475
Fixed Over heads
Less: Machining dept. 2000/100*5 hr*7 700
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less: Finishing dept. 2000*5 10000
Less:Dispatch Dept 1500*1 1500 12200
Cost of production under absorption costing 105675
Less:Closing stock
Cl. stock of unpacked 400* 182720 -77045
Cost of packed units 1500* -19261.25
Cost of sales -57783.75
Gross profit 242216.25
WN 1
Cl. stock of unpacked 400 AMOUNT
Direct material 2000*45 900000
Direct labour
Machining dept. 2000/100*5 hr* 5 500
Finishing department 2400
Fixed Over heads
Machining dept. 2000/100*5 hr*7 700
Finishing dept. 2000*5 10000
Total 913600
Total production 2000
Total Units 400
Total unpacked cl. Stock 182720
WN 2
Cl. stock for packed units -77045
Total packed units 1600
unpaked 400
Total cl. Stock for packed units -19261.25
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TASK 3
P4 Identification of planning tools and budgetary techniques as well as their pros and cons for
Toyota plc
Budgets are the financial aid or help which will be given by side of management ot all
other department of business so that they could manage the flow of fund and expenditure within
their departments (Hutaibat, 2012). If there are any mismatches with the allotted budget and with
actual expenditure then management need to apply some tools and techniques which are related
ot control of budgets.
Variance analysis- this will be the simplest form of controlling the mismatches of budgets if any.
Which is done by taking the budget and then comparing it with the expenses which are actually
caused to firm according ot department basis and then variance are been found. Variance will be
found in both labour and overhead cost of firm and thus helpful in reducing the cost of business.
Zero base budgeting method- this one is the most popular form of method which are been used
nowadays by management of business (Jalaludin, Sulaiman and Nazli Nik Ahmad, 2011). Under
this method budget of every year are made on nil or taking zero as base. Which clearly means
that if any amount is been undue in last year's budget then that amount will not be included or
forming part of current year's budget. But this method is only applicable if income of last year is
equal to that of expense of that year so there will be no amount left for adjustment. But if the
income is more than expenses then amount which need to be allocated need to be raised so that
there is nothing left for next coming year.
Adjustment of fund- this will be wholly and solely depending upon the top management who will
be making decision to adjust fund from one project to other project which need help.
Management will be evaluating that one project is running short of funds for meeting its
expenses and other one is having excess of funds so they will bed adjusting funds from both the
departments or project (Mat, Smith and Djajadikerta, 2010). This will thus be helping
management in decreasing the wastage and misuse of money which is been given to all the
departments or projects of Toyota
Advantages Of Budget Control
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This will be helping Toyota in analysing which budgeting method or techniques must be
used by firm so that mismatch of budgets are been corrected. As budgets will be helping firm in
reaching to their goals and objectives of firm which they have set for all departments.
Coordinating activities across department- the budgets or methods which are used to control the
budget will be helping Toyota in coordinating all activities within department. Like if top
management are using adjustment of fund method then this will be helping one department with
the available fund of other department.
Recording of activities- budget controlling methods will also be helping in recording and
maintaining all activities which are performed by business (Messner, 2016). Like in Toyota
management could any time have a look on which activity is making profits and which is just
creating loss. So company could increase the amount of efforts which they are putting onto that
loss making department.
Improving communication- all employees of firm will be easily coordinating with each other in
order to have a look on the area which is making higher profits and which is not.
Helping in comparing- variance method will be helping in making comparison of actual budget
with that of budget which was set at the beginning of current year.
Disadvantages Of Budget Control
Lack of employee participation- as the budgets are mainly allotted by top management to
employees which will be creating demotivation among them (Pimentel and Major, 2010). The
budgets are simply made and allocated to employees in which they are having no participation
thus they will not be taking interest in understanding that budget.
Reduce in initiative- if the budget which is been prepared is very rigid then this will not be
attracting initiative or employee participation within business ideas or projects. The innovation
within lower level of managers whose innovation is very important will not be seen . Thus, this
will b making it very hard to get money for any kind of new idea or development within
organisation.
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Zero could not be taken- as in the zero base budgeting techniques within which in formation of
budget of this year zero or nil is taken will be totally wrong or unfair for that year budget. Every
time expenses could not be equal to income of that year which is taken as assumption in zero
base budgeting systems (Salehi, Rostami and Mogadam, 2010).
P5 Identification of techniques to overcome with economical problem in Toyota plc
Monetary administration: this technique is applied by the management of Toyota in order to
control and administer the monetary challenges which are there within organisation. Under this
technique if there are any wastage of money and funds which are invested within organisation.
Then this will be helping in taking the corrective actions on the side of management of company.
In overcoming financial problems Toyota Plc is using the monetary administration in which they
will be managing their money which they are having so that they are able to control all kind of
financial problems. But the other company which is Volkswagen is not been able to implement
this monetary administration.
Key performance indicators: This will also be helpful to management in estimating which area
of business is the main and key indicators of performance of business and thus helping them to
improve the faults. Volkswagen is been successfully implementing Key performance indicators
as they are been able to identify their key business area like that of manufacturing and
assembling of motor vehicles. While on the other hand Toyota is not been able to identify its kie
performance areas.
Benchmarking: in this method one such standard of performance of business will be set and then
according to that set standard all other performance of management would be judged (Shields,
2015). This will be helping management in comparing the actual achievement with those which
were set in earlier terms of management or at the stating of year. This method is been generally
not been implemented in both these companies as in benchmarking standard setting is quite
difficult so they are not using. Both Toyota and Volkswagen are using benchmarking for a short
term plan or short term target which they wan to achieve.
Balanced Scorecard- this is also another method of analysis the financial problems and then
solving them at the end of management. Under this method the performance of all areas of firm
is done which will be including 4 basic areas namely financial, customers, internal business
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process and learning or growth. Toyota is been using Balance Scorecard for many years as this is
the most simple and efficient method of overcoming financial problems. In this kind of method
all kind and areas of performance of Toyota is been taken and then problems are been identified
in all those areas. This method of balance scorecard is been used in Volkswagen as well.
M4 Analysing how these techniques will be leading to sustainable success of organisation.
All the said techniques will be helping management in analysing the areas which are
performing good and those which are not. The areas which are not maintaing profits for the firm
would be tracked down so that corrective actions would be taken on the basis of them all
(Stergiou, Ashraf and Uddin, 2013). Thus, at the end these techniques will be leading into
sustainable success of organisation if company knows what need to be corrected and which part
is doing or performing good.
D3 Evaluating how planning tools will be accounting to solve the financial problems.
If the company is doing planning for the success of business and budgeting its overall
cost and expenses for that financial year then it will be easy for the firm in obtaining profits and
success (Viere, von Enden and Schaltegger, 2011). Thus, the financial problems of firm would
be sorted out if they are planning for the financial year.
CONCLUSION
From the whole assignment it was concluded that management accounting is very
important as they will be enabling company to perform in better way. Thus, Toyota will using all
type of budgets and would be taking corrective actions so that management could easily arrange
for funds if required. All the budgets techniques which are used by Toyota will be having their
own pros and cons which need to be taken into account so that company is performing in very
efficient manner.
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REFERENCES
Books and Journals
Bennett, M., Schaltegger, S. and Zvezdov, D., 2011. Environmental management accounting.
In Review of management accounting research. Palgrave Macmillan UK.
Boyns, T. and Edwards, J.R., 2013. A history of management accounting: The British
experience . Routledge.
Endenich, C., Brandau, M. and Hoffjan, A., 2011. Two decades of research on comparative
management accounting–Achievements and future directions. Australian Accounting
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Fowzia, R., 2011. Strategic management accounting techniques: Relationship with business
strategy and strategic effectiveness of manufacturing organizations in Bangladesh. World
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Givoly, D. and et.al., 2017. Information Content of Key Performance Indicators and the
Properties of Their Analyst Forecasts.
Hammad, S., Jusoh, R. and Ghozali, I., 2013. Decentralization, perceived environmental
uncertainty, managerial performance and management accounting system information in
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perceptions in Jordanian universities. Asian Social Science. 8(3). p.303.
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