Management Accounting: Past Papers and Solved Assignments

This assignment details a collection of management accounting past papers and solved assignments. The content includes references to various books, articles, and online resources related to management accounting, such as 'Principles of Strategic Management', 'Accounting, Decisions and Promises', 'Management Accounting Research' articles, and online materials like 'Pros & Cons of an Operational Budget'. The assignment appears to be from a university or academic institution, with a focus on providing students with resources for their studies. It seems to be a compiled list of relevant material for management accounting courses.

Management Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO1 .................................................................................................................................................3
P1 Management accounting systems......................................................................................3
P2 Methods used for management accounting reporting.......................................................5
M1-.........................................................................................................................................6
D1...........................................................................................................................................6
LO 2.................................................................................................................................................7
P3, M2 and D2. Calculation of costs for preparation of income statement by using the
marginal and absorption costing technique............................................................................7
LO 3.................................................................................................................................................9
P4 Advantages and disadvantages of different types of planning tool used for budgetary
control.....................................................................................................................................9
M3 Application of planning tools ........................................................................................11
LO 4...............................................................................................................................................12
P5, D3 and M4 Organisation are adapting management accounting systems to respond to
financial problems................................................................................................................12
.......................................................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Management accounting is a process of managing the accounts and finance of the
company to maintain the company financial position stable. Accounting is done by the
accounting department team on the internal bases as it is not regulated by law and rules.
Management accounting is very beneficial to the company as they manage the decision making
power of the employees working in the company. By managing the accounts of the company
they can early identify the problems arises in the company and can prepare a proper feedback to
overcome from that problems.
For this project The Berkeley Partnership has been selected which involved in offers
consultancy services to variety of businesses. Report will include a brief understanding of
management accounting systems. It also includes the techniques for management accounting.
Further it describes the various planning tool such as cash budget, operating budget and Zero
based budget to helps in managing accounts. Lastly it includes the various ways that organisation
uses to respond to financial problems in managing accounts.
LO1
P1 Management accounting systems
With the growing organisations and techniques there is a need to maintain the records of
the company and plan the manufacturing process and sales in by the company. Management
accounting system is the system which contains recording of the daily data in the organization
and evaluating the weak points in the company (What is management accounting, 2019). There
is preparation of the statistical data and reports that are used by the company to make the daily
decisions. The management accounting also help in studying the previous data and making
budget accordingly for the next business cycle (Maas, Schaltegger and Crutzen, 2016). The
budgets are made at various level to compare the cost incurred and the cost expected to be
incurred. Management accounting also helps in the process of financial accounting too as the
data and reports made in the management accounting is used to make decisions on the financial
projects and investment for the product. It includes reports on income and expenses, return on
investment and sales analysis reports, improving the performance and reduce the flaws in the
functioning of the Berkeley Partnership. The income and expenses reports are used to balance
the expenses and income through any product. Return on investment reports are necessary to

know the income incurred by the investment made by the company. Sales analysis reports shows
the sales over a period, by the company and take decisions on the future production of the
product (Cooper, Ezzamel and Qu, 2017).
There are different types of management accounting system these are as follows-
 Cost accounting systems- Cost accounting is the process which is used to estimate the
price of a product in the organisation for the purpose of inventory valuation, controlling
the cost and the profitability of the product so produced. The cost of product is the
expenses incurred on the manufacturing of the product till the product is sold by the
company The Berkeley Partnership. There are two main components of cost accounting
system that are- Job order costing and process costing (Chenhall and Moers, 2015).
 Inventory management systems- Inventory is the stock of finished goods in the
organization. This is a system through which the amount of stock is calculated by the
managers for the purpose of further manufacturing, and making budgets accordingly.
Inventory management helps in evaluating the level of goods produced and sold by the
company so that there is no misuse of valuable resources in The Berkeley Partnership.
The inventory is divided in three main categories the are- Raw material stock, work in
progress goods and the finished goods produced by the company. Inventory management
ensures that there is no excess amount of goods lying in the storage and on the other hand
there is no shortage of goods when needed for sale (Granlund and Lukka, 2017).
 Job- Costing system- It is a system which involves calculation of cost of the product on
the basis of cost incurred in the production of the product. The cost is then used to
evaluate the price of product to the final customers. It also helps in evaluating the cost
incurred on labour, raw material, and manufacturing expenses by the company The
Berkeley Partnership
 Price- optimising system- this is a mathematical process which involves the calculation
of price on the basis of change in demand on the different price levels of a produc .
(Kokubu and Kitada, 2015).The cost and inventory level is used to determine the price
level of the product which is more profitable to the company.
Thus, there are many ways of managing the accounting process in The Berkeley
Partnership. These systems help in the growth and development of the company by evaluating
and focusing on the problem areas of the company (Nielsen, Mitchell and Nørreklit, 2015).

P2 Methods used for management accounting reporting
Management accounting reporting is the systematic analysis of the recorded data by the
operation management and making the final reports and submitting the reports to the decision
makers of The Berkeley Partnership. This includes cost accounting records, the budget reports,
inventory control reports, accounts receivable reports and the performance report.
The cost accounting reports presents the cost and expenses incurred on the product so
manufactured for the purpose of its price determination and profit calculation by the managers in
The Berkeley Partnership. If the cost incurred on the production of the product increase than the
price of the product will also increase accordingly (Wagenhofer, 2016). Also, there are market
factors such as increase in demand there will be rise in price of a product thereby increasing the
profit of the company.
The budget reports are used to compare the current year data with the previous year data
of the financial year. The budget reports can also be made on the comparison of the expected
cost and the actual cost incurred in manufacturing of the product (Hiebl, 2018). The budget
report helps the managers on taking the decisions on the weak points of the manufacturing cost.
It helps in trimming the cost and expanding the profit of The Berkeley Partnership.
The inventory control analysis the flow of goods in and out from the company. The
inventory control ensues the recording of the incoming of the raw material, the work in process
goods lying with the company and also the finished goods in the company and the inventory out
for the purpose of sale by the company The Berkeley Partnership. Inventory control report is
used by the decision makers to take the decision on the production of the units in the future and
determining the cost of the product lying in the company.
Accounts receivable records are the reports includes the recording of data of the credit
sales. The sale of product on credit is shown in accounts receivable and included in the
management accounting reports knowing the amount owned by the company from the debtors of
the company. It acts as a crucial report for the calculation of future liquidity of the company. The
report also includes the recoverable and non-recoverable amount by the company through the
debtors (Senftlechner and Hiebl, 2015). Thereby managers can use the reports in checking and
illuminating the problems in the collection process by the company and the various methods used
in the collection process.

Performance reporting is the overall representation of the report which includes the
evaluation of the work done and the successfulness of the policies opted by the managers in the
previous session and the decisions taken on any manufacturing process and the product
development. As the name suggests it is used to compare the original data with the present data
to calculate that how efficient the decision is taken by the managers (Coad, Jack and Kholeif,
2015). If the plans and policies doesn't work according to the planning than there is a need to
modify the plans of the company.
M1-
The management accounting have benefits for the organisation by being a quality check
on the functioning of the company. This includes the presentation of reports such as cost report,
inventory report, finance report etc. which reduces the risk factor for the company. Also, there
are reports on daily, weekly and monthly basis which ensures the regular check on the issues
relating to operation (Maskell, Baggaley and Grasso, 2016). The report includes the cost of
labour, the managers can best allocate the labour and reduce the cost in effective manner. TSR
Pvt. Ltd. Can use the data in reports in comparing the cost from previous operation there by
increasing the productivity and also The Berkeley Partnership. Can be a benchmark for all the
other companies in the country.
D1
Through management accounting system and reporting there can be regular quality
management of the product by checking the product on weekly and monthly basis which
evaluates and ensures the production of quality product at a minimal cost, the cost management
report shows the cost incurred on the product which includes raw material cost, cost of labour
and other manufacturing expenses and there comparison with the price of product so that there
can be profitability in the production of the product (Morden, 2016). Through continuous
evaluation of reports in the company The Berkeley Partnership. there is continuous elimination
of the errors and increasing the level of productivity thereby helping in continuous improvement
in The Berkeley Partnership.

LO 2.
P3, M2 and D2. Calculation of costs for preparation of income statement by using the marginal
and absorption costing technique.
Marginal costing- It is defined as the technique of cost data presentation where fixed and
variable cost are shown separately for making managerial decisions. It is clearly understood that
it is not the method of costing such as job or process costing (Boučková, 2015). It is simply a
method for analysing the information regarding the cost for guiding the management. It helps in
identifying the impact of change on the profits due to change in the level of activity.
Absorption costing- It means that all the cost of manufacturing are absorbed by the units
produced. The finished goods cost in inventory includes direct labour, direct material and both
fixed and variable manufacturing overhead. It is also referred to as full absorption costing
method. It calculates the unit cost of an item taking into account all the variable, fixed, direct,
indirect etc (Schaltegger and Zvezdov, 2015). Indirect cost or fixed cost are allocated or
absorbed in this approach. It allocates the overheads between a no. of unrelated products or
services on a fair basis to ascertain the accurate cost and realistic income.
Income statement using Marginal costing
Particulars Amount (£)
Revenue (£25*10000) 250000
less: Variable cost
Direct material 50000
Direct labour 30000
Variable overhead 20000
variable selling and
administration
overhead 30000
Total VC 130000
Contribution 120000
less: fixed cost
manufacturing
overhead 40000

selling and
administration
expenditure 30000 70000
Profit 50000
Income statement using Absorption costing
Particulars Amount (£)
Operational Revenue (£25*10000) 250000
less: Variable cost
Direct material 50000
Direct labour 30000
Variable overhead 20000
variable selling and
administration
overhead 30000
Total VC 130000
less: Fixed cost:
manufacturing
overhead 40000
selling and
administrative
expenditure 30000 70000
Total cost 200000
Profit 50000
INTERPRETATION- From the above analysis it is interpreted that the revenue generated
is equals to the £250000 from which the variable cost of £130000 are reduced to calculate the
contribution that are resulted as £120000. For evaluating the profits the fixed cost equates to
£70000 are deducted from the contribution and the profits ascertained of £50000 by applying
both techniques' absorption and marginal costing. As all the expenses of TSR pvt Ltd are of same

amount so both the tools depicted the same amount of profit. From the analysis is determined
that absorption costing is a better tool for evaluating the income of the enterprise as it takes into
account both variable and fixed overheads in the inventory valuation and generates the realistic
profits. On the other hand, Marginal costing is not considered as an effective tool for computing
the profit as it ignores the fixed cost overheads in the valuation of inventory which leads to
incorrect and vague figures of profitability. Absorption technique helps in determining the over
and the underestimated overheads so that effective cost control can be exercised by the TSR pvt
Ltd. However, marginal costing does not provide information about the over and underestimation
of the overheads and no adjustments are made in it which results in unrealistic valuation.
LO 3
P4 Advantages and disadvantages of different types of planning tool used for budgetary control.
Budgetary control help the management to control the operation in the business in the
most efficient manner. They raise further funds for different purpose and utilize their resource
and company objective effectively. There are various advantages and disadvantages for
budgetary control in planning tool of ABC company. Advantages and disadvantages associated
with planning tools, in the context of budgetary control, are enumerated below:
~ Cash budget: Cash This budget is prepared by the BERKELEY PARTNERSHIP company to
estimatedestimate the cash inflow and outflow during the monthly, quarterly or yearly basis. The
main purpose to prepare the cash flow is to identify the overall cash that available in the
company and they can set their future project through the management of cash budget. To
analyse the proper cash budget helps the company to task risk in project and invest the amount
which results to the gain and profits to the company (The Advantages and Disadvantages of
Using Cash Budget, 2019)
The advantages of cash budget are -
 THE BERKELEY PARTNERSHIP company can improve their financial position on the
market by strongly communicating and investing in the project deals.

 With the cash budget THE BERKELEY PARTNERSHIP company can identity and
predict the upcoming challenges that company needs to face in the near future (Locke,
Lucas and Grayson, 2016). THE BERKELEY PARTNERSHIP company can invest in small business organisation
or cam also deal in financial services to provide loan to the companies to maintain
reputation in the market.
Disadvantages of cash budget are -
 It stops company to invest in market as people are not trust worthy and they can use their
cash for some other illegal purpose also which affects the company dignity.
 There are more chances of theft of cash as company makes strategy to save the money
which result Iin getting more links to the people to commit fraud in the
company(Mouritsen and Kreiner, 2016).
 As cash inflow and cash outflow in previous year is allotted in the next year which
means company take the profit ratio from the previous year but one disadvantages is that no year
is same in cash budget ratio as if one year suffer loss than it reflect the next upcoming year.
 ~ Operating budget: Suchoperating budgets depends upon the overall financial budget
plan in terms of revenue, profits and expenses of the BERKELEY PARTNERSHIP company.
As THE BERKELEY PARTNERSHIP company is a medium sized base having 50 employees
working under the following department as to operate of finalise the actual plan made an
operating budgets plan. If company want to engage in establishing new products than it includes
project expense, profit or losses raising and resources utilizing are evaluated in the operating
budget (Pros & Cons of an Operational Budget, 2019).
Advantages: of operating budget are -
If company grows business for longer term than this budget is helpful to take risk and fulfil the
targets.
Operating budget It helps the company in federal tax compliance to save the tax from different
ways and invest in other projects which is also beneficial to company use.

 This budget helps the company to keep their data accurate and in systematic manner so
that if new person are appointed they can easily take over the data (Dekker, 2016).
Disadvantages of operating budget -
 To prepare a proper operating budget sometimes neglect the minimum requirement which
affects the whole budget planning.
 To operate in different operational budgets it neglect the bank investment scheme which
help employees to retain more in the company. Operational budgets are not prepared for the upcoming challenges that company can face
any time without any planning (Otley, 2016).
Zero based budgeting: The word itself describes the budget like zero base. This means that
company had to start their budget planning from the zero base. As other budgets are prepared on
the bases of previous profits but this budget is prepared under the proper guidance and reviews
from the employees working in the company (Quattrone, 2016). They ask the employees about
the expense they bear in office and how they cut the expense incurred and that's how the zero
bases budgets prepared.
Advantages of zero base budgeting are -
Zero Based budgeting are justified and clear to show all the budgets plan easily. They discuss
with the internal team members and then make budget which motivate employees to engage into
business decision. THE BERKELEY PARTNERSHIP company can look the actual base number and
make the plan they are not refereed to the previous plan budget to make the budget plan
(Maas, Schaltegger and Crutzen, 2016).
Disadvantage -
This budgets is not effectual for the companies engages with high number of employees.
 This is the time consuming method as it take the decision of all the employees and the
budget plan is prepared which sometimes considered to be inaccurate.

M3 Application of planning tools
Cash budget help THE BERKELEY PARTNERSHIP to manges the inflow and outflow
of cash transaction and record the expenses which they bear in the future. To prepare a cash
budget , they can easily manage the resource and activity in the organisation. It helps them to
take the risk relating to the financial matters and also engage in various activities for the
development structure.

LO 4
P5, D3 and M4 Organisation are adapting management accounting systems to respond to
financial problems.
There are various factors which management of THE BERKELEY PARTNERSHIP can
adopt in accounting system to respond to financial problems are ~
 Key Performance Indicator (KPI) – Key performance indicator helps THE BERKELEY
PARTNERSHIP to identify the key factors in the organisation. It also analyses the key
performance and monitor the performance to achieve in respect of operational and
financial structure. A proper management team is appointed to monitor the performance
of the company and employees working in the organisation so that it reduces the case of
fraud and theft in company accounting system (Cooper, Ezzamel and Qu, 2017). This
process helps the company to stay strong in financial terms and also if they are planning
to expand their business they can easily commit with risk free factors.
To keep a close monitor in the working premises management team adopted a software
which collects the information of all the employees as an KPI's and also collect their day to day
report which help the management team to motivate the employees who neglect their work or
trained them if they are facing any issue in understanding.
Advantages Disadvantage
 It encourages and motivates the
employees to perform better in the
organisation.
 It's also manages the performance of
various department as they already
have the information of their working
criteria (Bromwich and Scapens, 2016).
 Is THE BERKELEY PARTNERSHIP
not stick to the performance target that
there are no uses to set the target goal
of the company.
 Performance can be achieved when
numerous method are used to indicate
the measures which is the time
consuming method.
 Balance Score Card – This help company to balance their strategic objectives to the
performance criteria so that what management plans can be achieved by the employees
this is balancing the score card. As balances score strategy is to balance the organisation
in respect of financial, customers, internal processes and learning and capability

(Guenther and et.al., 2015). The main reason to set the target work to motivate employees
to achieve the goal in the organisation. They set the balance report of the employees and
also company's financial and non-financial report so that they can assist the company
structure in the aligned way which is justified to take decision and can manage risk
factors (Wagenhofer, 2016). This method helps the company to identify the problems and
they can solve it by analysing the factors which helps company to achieve more profit
and can retain the employees for longer term.
Advantages Disadvantage
 It helps the BERKELEY
PARTNERSHIP to provide a clear
picture so that they can make strategy
to overcome from the problems.
 This process helps the other employees
to achieve the target if they are lack in
achieving that.
 It is the time consuming process as
THE BERKELEY PARTNERSHIP
have to minutely examine the
employees and push them to complete
the task.
 Sometimes it result in poor support
from employees as they are ready for
the team work to achieve the goal(Van
der Stede, 2016).
 Financial Governance – Government set some norms relating to finance department of
the company to work, set targets and achieve goal according to the available structure. It
refers to specifying the way the company deals in collecting information, manages the
target works and monitors the employees to achieve the target in the organisation
(Morden, 2016). Government norms is that company must increase at least 25% sales
profit ever year and they take a feedback from employees regarding the work issue which
helps company to know better and communicate with the employees to retain them for
further purpose (Senftlechner and Hiebl, 2015). The risk factor for poor financial
governance may results to fraud, misconduct and loss the confidence and commitment
towards employees.
Advantages Disadvantage

 It results in improving a good
leadership skills and management
power to retain employees for longer
term.
 It helps THE BERKELEY
PARTNERSHIP to build a strong
financial background to face the tough
competitors in the market (Coad, Jack
and Kholeif, 2015).
 Lot of polices confuses the employees
about the target they have to achieve
and management to follow general
polices.
 Changes in THE BERKELEY
PARTNERSHIP management
technology and rules results in lack of
potential power to stick to one rules.
 Benchmark – This helps the organisation to achieve the target through setting a proper
gaol and they are to be followed by all the team members in the organisation.
Organisation need to set a benchmark to evaluate the performance at the fixed level so
that when there is a comparison they are to be proved as standard in setting goals.
Advantages Disadvantage
 It is the cost efficient method and
changes can be done without investing
in large scale of business.
 It improves the performance of the
employees and also inspires their
creativity to deal in certain matters
relating to THE BERKELEY
PARTNERSHIP decision maker
 It is difficult to gather all the data and
information relating to company
progress structure.
 This process make company to think
more and sometimes predication is at
high level to get the positive response.
The comparison between The BERKELEY PARTNERSHIP and the UNICON is that
BERKELEY PARTNERSHIP prefer the balance score card in the company structure as it deals
in both financial and non financial matters of the company. They motivate their employees and
balance their performance criteria to achieve the targets. They provide friendly environment so
that each members work as a team and know the importance to work together while in UNICON
they prefer the benchmark method as they set the target to their employees which they have to

achieve. This result in lack of attention of employees towards the work and they divert their
mind towards other activities.
From my point I prefer The BERKELEY PARTNERSHIP as they motivate their
employee and provide training to achieve goal in the organisation. They balance their score card
and if they lack in any way they help them to achieve it and reach the target thereby it lead to
sustainable growth in the organisation.
CONCLUSION
From the above study it can be concluded that management accounting help the company
to make strong background to manage the task and operate the internal matters of the company
efficiently. They manage the task assigned and also prepares a report to overcome from the
challenges that company can face in near future. The managers to manage the accounts examine
the minute aspects which helps them to improve the strategies and ready to adopt changes in the
upcoming future. If the management accounting is appropriate company can expand their
business and also assist in risk factor to beat the competitor market. This report indicates that
management accounting system and management accounting techniques provides variety of
management accounting information such as cost-volume-profit analysis, cash budget, budgetary
control and other relevant report helps in decision making. It also shows various ways to respond
to financial problem and help organisation to achieve the target goal and secured from risk
factors in the near future.

REFERENCES
Books and Journals
Boučková, M., 2015. Management accounting and agency theory. Procedia Economics and
Finance. 25. pp.5-13.
Chenhall, R.H. and Moers, F., 2015. The role of innovation in the evolution of management
accounting and its integration into management control. Accounting, organizations and
society. 47. pp.1-13.
Coad, A., Jack, L. and Kholeif, A.O.R., 2015. Structuration theory: reflections on its further
potential for management accounting research. Qualitative Research in Accounting &
Management. 12(2). pp.153-171.
Cooper, D.J., Ezzamel, M. and Qu, S.Q., 2017. Popularizing a management accounting idea: The
case of the balanced scorecard. Contemporary Accounting Research. 34(2). pp.991-1025.
Granlund, M. and Lukka, K., 2017. Investigating highly established research paradigms:
Reviving contextuality in contingency theory based management accounting research.
Critical Perspectives on Accounting. 45. pp.63-80.
Guenther, E. and et.al., 2015. Material Flow Cost Accounting–looking back and ahead.
Hiebl, M.R., 2018. Management accounting as a political resource for enabling embedded
agency. Management Accounting Research. 38. pp.22-38.
Kokubu, K. and Kitada, H., 2015. Material flow cost accounting and existing management
perspectives. Journal of Cleaner Production. 108. pp.1279-1288.
Locke, J., Lucas, M. and Grayson, P., 2016. Challenges in Advanced Management Accounting.
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.
Maskell, B.H., Baggaley, B. and Grasso, L., 2016. Practical lean accounting: a proven system
for measuring and managing the lean enterprise. Productivity Press.
Morden, T., 2016. Principles of strategic management. Routledge.

Mouritsen, J. and Kreiner, K., 2016. Accounting, decisions and promises. Accounting,
Organizations and Society. 49. pp.21-31.
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.
Schaltegger, S. and Zvezdov, D., 2015. Expanding material flow cost accounting. Framework,
review and potentials. Journal of Cleaner Production. 108. pp.1333-1341.
Senftlechner, D. and Hiebl, M.R., 2015. Management accounting and management control in
family businesses: Past accomplishments and future opportunities. Journal of Accounting
& Organizational Change. 11(4). pp.573-606.
Van der Stede, W.A., 2016. Management accounting in context: Industry, regulation and
informatics. Management Accounting Research. 31. pp.100-102.
Wagenhofer, A., 2016. Exploiting regulatory changes for research in management
accounting. Management Accounting Research. 31. pp.112-117.
Bromwich, M. and Scapens, R. W., 2016. Management accounting research: 25 years
on. Management Accounting Research. 31. pp.1-9.
Dekker, H. C., 2016. On the boundaries between intra firm and inter firm management
accounting research. Management Accounting Research. 31. pp.86-99.
Otley, D., 2016. The contingency theory of management accounting and control: 1980–
2014. Management accounting research. 31. pp.45-62.
Quattrone, P., 2016. Management accounting goes digital: Will the move make it
wiser?. Management Accounting Research. 31. pp.118-122.
Online
Pros & Cons of an Operational Budget. 2019. [Online]. Available through:
<https://smallbusiness.chron.com/pros-cons-operational-budget-35123.html>.
The Advantages and Disadvantages of Using Cash Budget. 2019. [Online]. Available through:
<https://www.brighthub.com/office/finance/articles/119670.aspx>.

What is management accounting. 2019. [Online]. Available through:
<https://www.myaccountingcourse.com/accounting-dictionary/management-accounting>.