Management Accounting Project

This project examines the role of management accounting systems in UCK Group, a furniture manufacturing company. It analyzes different types of accounting systems, including cost accounting, inventory management, price optimization, and job costing, and their impact on decision-making and overall business performance.

MANAGEMENT ACCOUNTING
PROJECT - 1

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1: Different types of accounting systems.................................................................................1
1.2: Type of reporting systems which are used in organisation..................................................3
1.3: Evaluation of data with the help of costing methods...........................................................4
1.4: Critical evaluation of accounting system report within an organisation..............................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
.........................................................................................................................................................7

INTRODUCTION
Management accounting is an integral part of an organisation which put their maximum
efforts in maintaining financial position in competitive market. It is essential for every
organisation irrespective of the fact whether engaged in retail, manufacturing or service sector to
adopt best accounting systems so as to record business transactions made on daily basis. It
became easy for management to make an effective decisions and suitable planning for the
betterment of an organisation (Management Accounting, 2016). The present assignment report is
based on “UCK Group” which deals in manufacturing and selling furniture products across
worldwide.
TASK 1
1.1: Different types of accounting systems
At present times, there are lots of business organisation exist in competitive market world
with an objective of earning profits and achieve competitive advantage in order to compete with
their rivals. For this purpose, the support of different departments are essentially required in
order to achieve desired goals and objectives within pre-determined time period. Collecting
information from different departments regarding the business activities operated by them which
help management to know actual business condition in market. This will direct management to
make an effective decisions and suitable plans with the help of information available through
using various management accounting systems (Lavia López and Hiebl, 2014). This will bring
UCK group ahead than their rivals and strong their financial position as well. There are different
business activities executed in company such as production, marketing activities which requires
huge involves huge cost and time due to which an effective planning and strategies are
essentially required.
Records are primarily figure by utilizing pivotal data from different offices and posted it
into various configurations through after fundamental rules and measures appropriate in that
specific country. UCK group utilizes different bookkeeping methods for the target of gathering,
conveying, recording and assessing information keeping in mind the end goal to accomplish
better results. It has been discovered that there is sure particular correlation among
administration bookkeeping and monetary information. Aside from this, detailing of
bookkeeping reports, an organization need finish investigates worldwide bookkeeping direction
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which are being followed in an association. So as to deal with their information according to the
said monetary data of the organization fundamental results would be distinguished in like
manner.
If there should arise an occurrence of monetary bookkeeping, the execution and their
general solidness can be decide by making legitimate examination and assessment of budgetary
position of the organization. It is for the most part related with gathering, recording of
bookkeeping informations, regardless of whether budgetary information should have effects over
the general monetary execution of an association. Administration dependably hopes to determine
inside development and proficiency of each division to take a type of successful choice in
regards to up and coming venture designs. This must be assessed through utilizing different
perspectives, for example, proportions investigation and money streams articulations translation.
These all are vital viewpoints for the organization, as all fundamental data related with the
organization are grasped and given over to speculators and different partners to settle on capital
ventures choices. To keep up legitimate record of information organization could utilize different
kinds of bookkeeping frameworks (Parker, 2012).
It requires adequate support from different management accounting system which are briefly
explained as below:
Cost accounting system: It is an an effective system of accounting with the help of which
management make assumptions related to the cost incurred in production and other business
activities. It can be done through forming budget with the help of such accounting system which
directs the employees to utilise available resources in an optimum manner. There are mainly two
types of cost accounting which includes marginal and absorption costing. UCK Group of
company may adopt marginal costing method with an objective of preparing cost sheet to record
data.
Inventory management system: Such accounting system contains the information related
with level of inventory available with company at present time. This will enable management of
UCK Group to make decision regarding ordering raw materials from the suppliers so that the
company can easily meet the needs and demands of targeted customers. It help company in
reducing cost of storage due to ordering inventory whenever the company faces shortage.
Price optimisation system: According to such system, the management of UCK Group
identifies the buying behaviour and perception of targeted customers towards the products and
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services offered by an organisation according to which the management are able to set an
effective pricing strategies. It help in maximising the satisfaction level of customers due to which
the company can easily achieve its loyalty as well (Baldvinsdottir, Mitchell and Nørreklit, 2010).
Job costing system: With the help of such accounting system, the management of UCK
Group are able to allocate cost in production of specific product or batch of products. Allocation
are done after analysing the outcomes received from produced products which directly increases
their revenues as well. Using such system, the time involved to produce product on the basis of
the effectiveness of business activity.
1.2: Type of reporting systems which are used in organisation
For making proper assessment of organization's performance, administrators of UCK
group require to make utilization of financial exchange in a successful way. So as to record all
viable data to manage day to day business transaction in more effective and viable way. A well
managed reporting frameworks would aids in appropriate use of assets that are being utilize by
organization to identify entire performance of firm during a financial or accounting year.
Reports are normally use with a specific end goal to investigate total losses or gain bring about
by organization amid the time. It has been recognised as more effective and viable reporting
framework to take significant decisions so as to achieve their future gains or profits for the
organization.
This will be helpful in regard to assess current position of organization to make further
investment in future planning. It is generally identified to gain competitive edge over other firms
or business rivals. If there should arise an occurrence of UCK Group, administrators use to lead
their inside activities in more reliable way by utilizing systematic and detailed information of the
organization. Reports are identified to be detail data which is being get ready by utilizing
different data through various sources. All essential data or information would be exchange to
their separate organization to prepare monetary position of the organization. There are different
kinds of accounting system which are being utilize for UCK furnitures in their day by day course
of activities. Some of them are explained beneath:
Inventory management report: Such sort of reports are principally done with a specific
end goal to control and keep up general control of entire stocks that are keep by the organisation
during time period. There are different strategies which will be powerful to control and manage
their general record of inventories. This can be use specifically time frame to make appropriate
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data about their opening & closing stock of the organization. Some essential stock valuation
strategies are ABC costing & order quantity measurement (van der Steen, 2011).
Account receivable reports: These sort of reports are get ready through gathered
significant information keeping in mind the end goal to identify entire list of all clients
solicitations that stay unpaid for longer time frame. These are said to be legitimate enforceable
cases for making payment to keep business more protected and secure.
Job cost report: It is defined as a particular report which is being vital perspectives for
making appropriate valuation of information through managing current position of job and to
assess total time period they are required to complete a task.
Performance report: It is one of the essential activity that is done by organization to
utilize past information keeping in mind the end goal to assess current year performance. This is
fundamentally done to analyse whether an organization can perform well in regard to create
better outcomes at the time of an accounting period. Principally, these reports are chiefly useful
to dissect real position of the organization in regard to different companies.
1.3: Evaluation of data with the help of costing methods
Management seeks for better assets that are useful to UCK, with a specific end goal to
accomplish their general development and piece of the overall industry. For this reason, they
utilizes management accounting frameworks to record pivotal information in their particular
configuration. It is said to be most extreme essential requirements for some industry to have
recognizable proof of turnover and benefit those are said to be past the constraint (Ahmad,
Kamilah, Vasile and Man, 2012). These can be useful to oversee and assess their general results
for organization in future alongside expanding exhibitions of the organization.
Accounting systems Benefits
Inventory management
system
 This will in improve efficiency of the organization and
furthermore control additional time and expenses.
 By the utilization of this, legitimate precision of stock
valuation of aggregate inventories should be possible in more
compelling way.
Job costing system  In spite of the fact that this aggregate keep an eye on general
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nature of work done should effectively be possible. It is for
the most part related with an individual employments.
 Through the assistance of this bookkeeping framework, UCK
gathering would have the capacity to achieve and analyze add
up to expenses of delivering single and in addition gathering
of items amid the time.
Price optimisation
system
 This will be useful in accomplishing absolute gainfulness in
their tasks and think about best appropriate cost of an items.
 By the utilization of this specific framework, directors can
without much of a stretch have the capacity to investigate
general view of clients about organization items and
administrations.
Cost accounting system  By the assistance of this, an organization can bring legitimate
proficiency their working and control of expenses in well
arrange way. This particular framework will help with
assessing absolute expenses of generation done amid the
time. This will reflect general evaluating of their items.
1.4: Critical evaluation of accounting system report within an organisation
There are various management reporting system mentioned above which provides
valuable and relevant information about business transactions done on daily basis. It helps in
making an effective decision and suitable plans for betterment of an organisation (Otley and
Emmanuel, 2013). For example, inventory management report gives relevant information about
the current stock available with UCK furniture have at present. It helps management to make
decision regarding fulfilling the shortage of inventory through contacting with suppliers and
place order of inventory on the basis of market needs and demands. Therefore, reporting system
gives valuable support in making an effective decision. Such reporting systems are briefly
explained under the below along with their critical evaluation.
Account receivable report: Such report contains the information of debtors which are
failed to repay to the company in exchange of goods and services. This will direct the company
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to make modifications in existing credit policies in order to protect company from default
debtors.
Performance report: It contains the information about the performance of employees as
well as an organisation which direct the management in evaluating the performance through
comparing actual with standard performance. It help in identifying the deviations if any, which
restricts company to perform their optimum performance. This will enable management to make
corrective actions in order to bring profitable outcomes.
Inventory management reports: The management of UCK Group are able to get know
about the current level of inventory through getting information from such report. This help
company to meet customer's needs and demands through ordering raw materials whenever the
company feels shortage while doing production activities.
CONCLUSION
The project includes various types of management accounting and reporting systems
which facilitate management to make effective decision. In addition with this, the advantages of
accounting systems along with their critical evaluation are also discussed under this report. Apart
from this, all other aspects are also summarised under this report in the context of UCK group.
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REFERENCES
Books and Journals:
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.
Parker, L. D., 2012. Qualitative management accounting research: Assessing deliverables and
relevance. Critical perspectives on accounting. 23(1). pp.54-70.
Baldvinsdottir, G., Mitchell, F and Nørreklit, H., 2010. Issues in the relationship between theory
and practice in management accounting. Management Accounting Research, 21.(2).
pp.79-82.
van der Steen, M., 2011. The emergence and change of management accounting routines.
Accounting, Auditing & Accountability Journal. 24(4). pp.502-547.
Otley, D. and Emmanuel, K. M. C., 2013. Readings in accounting for management control.
Springer.
Ahmad, Kamilah. "The adoption of Management accounting practices in Malaysian Small and
Medium-sized Enterprises." Asian Social Science 10, no. 2 (2013): 236.
Vasile, E. and Man, M., 2012. Current dimension of environmental management accounting.
Procedia-Social and Behavioral Sciences. 62. pp.566-570.
Online
Management Accounting. 2016.[Online]. Available through:
<http://www.bbamantra.com/management-accounting-introduction/>.
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