Management Accounting and Systems in Brush Electrical Machines

This report discusses the management accounting and systems used in Brush Electrical Machines, a manufacturing company. It covers the requirements of different types of systems in management accounting, various methods applied, benefits and applications of management accounting, and the reporting process in the organization. The report also includes a range of management accounting techniques and appropriate documents used in the company.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Activity 1.........................................................................................................................................3
Management accounting and requirements of different types of system in management
accounting...............................................................................................................................3
Different methods applied in management accounting..........................................................5
Benefits of management accounting and its application........................................................6
Management accounting system and its reporting in process of organisation......................6
Activity 2.........................................................................................................................................6
Range of management accounting techniques & appropriate documents..............................6
Application & interpretation in complex activities of businesses..........................................7
PART B............................................................................................................................................7
Covered in PPT.......................................................................................................................7
CONCLUSION .....................................................................................................................8
REFERNCES...................................................................................................................................9

INTRODUCTION
Management accounting is regarded as a profession that consist of various systems that
are helping in increasing the level of performance in a organisation. There are various
fundamental of accounting system that is applied in the macro environment and is helping
organisations in operating in the environment (Graybeal,, Franklin and Cooper, 2018). The
present report is based on Brush electrical machines that is involved in manufacturing of
electrical generators (Cooper, Ezzamel, . and Qu., 2017). Accounting tools are used in the
process such as techniques of cost analysis, income statement can be applied for purpose of
making comparison and respond to different types of financial issue arising in course of
business.
PART A
Activity 1
Management accounting and requirements of different types of system in management
accounting
Management accounting: It can be regarded a type of managerial accounting that is used by
managers in the overall process of decision making. It is used internally in companies as a
statistical data for the purpose of further decision making (Yaacob and Nahar, 2017). It consist of
various methods and techniques that are used for evaluation of overall organisation performance.
In Brush Electrical Machines there are some application of management accounting that is used
for process of planning and creating a strategic management base.
There are certain requirement of management accounting as discussed below:
 Presenting the financial position: There are various types of system of management
accounting that are used by managers in a organisation that is helping them in
presentation of their financial statements (Weetman, 2019). Data is collected from
various systems that are used for making decisions.
 Allocating of resources: There are different types of inventory system of management
that is helping managers in maintenance of optimum stock level in a organisation. EOQ
is a technique that is commonly applied in various business organisation for providing

information to the management and helps them in identifying the order of stocks for
maintenance of appropriate inventory level (Bromwich, and Scapens, 2016).
 Budgetary control: It is also a very significant tool that is used for the purpose of
identification of risks that are associated with project of company. It is used for the
purpose of formulation of plans that are prepared in order to avoid any contingency of
risk that can occur in further course of operations (Thabetand Alaeddin, 2017).
Below discussed are some of tools that are adopted by Brush Electrical machines on their
process of decision making:
 Inventory management: It consist of a combination of technology and procedures that is
used for the purpose of monitoring, maintaining of stocks such as assets in company,
finished products, raw materials etc. all this is used so that if there is any imbalance in
supply and requirements that can be managed effectively(Dumay, and Rooney, 2018). In
Brush Electrical Machines this techniques has been adopted for purpose of maintaining
assets record, item location, supplying of information and generation of value stocks.
 Cost accounting system: It is also commonly known as a product costing system it is a
structure that is used by various business in order to control their cost, value stock and
make a profit analysis (Quattrone2016). In Brush Electrical Machines it is used for
accurate estimation of cost to calculate profit margins and different operational areas for
preparation of financial Statements.
 Job costing: It is a type of costing methods that is used for execution of some specific
customer orders. It depends on number of orders that are present for a company so that
there is timely delivery (Granlund, . and Lukka, 2017). In Brush Electrical Machines this
system is helping in discovering the are that is profitable for the the organisation. It is
done in below discussed some of steps:1. Receiving of enquiry: In this customer views related to product quality is collected and
further time for completion of work is estimated.2. Estimation of prices: Prices are determined based on customer preferences3. Receiving of orders: After customer is satisfied they place a order.4. Recording of cost: In this step cost associated with each step is recorded
5. Job completion: Final report is handed over to finance department and accounts
manager that is helping in calculation of final costing.

Different methods applied in management accounting
Accounting reports: These are some essential requirement that a company has to collect
information that is related with each operation and process.
 Job cost report: It is a report that is used for identification of expenses, cost & financial
efficiency of a particular job (Terdpaopong, Visedsun and Nitirojntanad, 2019). It is
helping in giving more importance to jobs that are profitable. Various waste areas can
also be identified and help in controlling of cost.
 Account receivable ageing report: This is a report that is also helpful in extending of
credit to Customers and management of cash flow (Collis and Hussey, R 2017). There are
various columns such as 30 days, 60 days & 90 days bolls used for monitoring of
defaulters. In Brush Electrical Machines it is helpful in monitoring of credit policies and
analysis of regular receivables.
 Cost Managerial accounting report: It is used for purpose of calculation of product
cost and manufacturing of business that consist of raw material and other associated costs
(Shil, , Hoque, and Akter, 201). In Brush Electrical Machines this report is prepared for
estimation of profit margins, labour cost , variable cost for developing a clear
understanding of various expenses.
 Manufacturing Report: in Brush Electrical Machines there is attempts made to have a
zero defect process. There are various aspects such as inventory cost, labour charges and
other different variables that are being considered in overall production process
(Weetman,2019). In case of electrical generators this area is focussed for making various
needed improvements so that work can be carried on more effectively.
For performing all business activities it is necessary for integrating system of management
accounting (Teixeira, , 2016). This is also helpful in providing the information required for
carrying of operations, system and reports are working together in Brush Electrical Machines to
estimate correct costing and total profitability (Hoozée, . and Mitchell, 2018. A base can be
established for making a comparison of actual performance with the standards and locate any
deviations.

Benefits of management accounting and its application
Name of accounting system Benefits
Price optimisation system Accounting system is associated with keeping
the prices effective (Dierynck, . and Labro, .,
2018).On Brush Electrical Machines,
accounting system is used for setting of prices
for different products accordance with their
production cots.
Cost accounting system It is relation with minimization of cost for
various activities. In Brush Electrical Machines
accounting is applied fort calculation of
manufacturing cost ((Jilani and Néfissa, 2019).
Job costing system It is aligned with the evaluation of efficiency of
job in association with cost and profits. In
Brush Electrical Machines each job is
associated with different tasks Manyaeva,
Piskunovand Fomin, ., 2016).
Management accounting system and its reporting in process of organisation
In Brush Electrical Machines, there is accounting system that consist of various different
systems like job costing system, inventory management and other, all these have to be aligned
with overall process of operations (Khunkaew and Qingxiang, , 2019). In Brush Electrical
Machines all the departments that are linked with each other. Such as receivable department is
having link with production department. All the process are interrelated with each other that is
helping in achievement of overall business objective.
Activity 2
Range of management accounting techniques & appropriate documents
Absorption Costing: It is described as a costing in which it involves all direct cost such as raw
material, wages and many more in producing product. Absorption costing is different from

variable costing because it includes only fixed expenses incurred for manufacturing product
(Burns ter Bogtand Scapens, 2018).
Marginal Costing: It includes all those variable costing which is used for manufacturing
product. In assistance of this, it is extra cost charge on producing one additional unit of output. It
is necessary to ascertain this cost in order to increase profitability of Brush Electrical machine
(Mite-Albán, 2018). Below mentioned is absorption costing and marginal costings statement of
Brush Electrical machine:

PART B
Covered in PPT

CONCLUSION
From above report it can be said that accounting tool can be used for purpose of
providing information in process of decision making. Management accounting reports are used
for purpose of referring in future course of business for budgeting and setting of gaols in
organisation. Management accounting systems are very helpful in dealing with various financial
issues and also in benchmarking and setting KPIs.

REFERNCES
Books & Journal
Bromwich, M. and Scapens, R.W., 2016. Management accounting research: 25 years
on. Management Accounting Research, 31, pp.1-9.
Collis, J. and Hussey, R., 2017. Cost and management accounting. Macmillan International
Higher Education.
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.
Dierynck, B. and Labro, E., 2018. Management accounting information properties and
operations management. Foundations and Trends® in Technology, Information and
Operations Management, 12(1), pp.1-114.
Dumay, J. and Rooney, J., 2018. Overcoming the symbolic violence of orthodox accounting
practice: an intellectual capital perspective. Journal of Intellectual Capital.
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.
Graybeal, P., Franklin, M. and Cooper, D., 2018. Distinguish between Financial and Managerial
Accounting. Principles of Accounting, Volume 2: Managerial Accounting.
Hoozée, S. and Mitchell, F., 2018. Who influences the design of management accounting
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Jilani, F. and Néfissa, B.B., 2019. The Impact of Early Adoption of IFRS on the Quality of
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Khunkaew, R. and Qingxiang, Y., 2019. THE CHARACTERISTICS OF TOP MANAGMENT
AND FIRM’S EARNINGS MANAGEMENT: THE EVIDENCE FORM
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Quattrone, P., 2016. Management accounting goes digital: Will the move make it
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Shil, N.C., Hoque, M. and Akter, M., 2019. Revisiting Management Accounting Practice Gap: A
Proposed PERAPPGAP Model. Journal of Accounting and Finance, 19(1), pp.135-155.
Teixeira, H.F., 2016. Lean Manufacturing e Lean Accounting Cost: um enfoque no real
desempenho em empresas de capital aberto na BOVESPA.
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Management Accounting: Extending the Burns and Scapens Framework. Available at
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Terdpaopong, K., Visedsun, N. and Nitirojntanad, K., 2019. Value creation through management
accounting practices in large Thai manufacturing companies. Polish Journal of
Management Studies, 19.

Thabet, A.A. and Alaeddin, O., 2017. Management accounting systems, credit risk management
practices and organizational performance at commercial banking sector in
Palestine. International Journal of Accounting, 2(5), pp.136-151.
Weetman, P., 2019. Financial and management accounting. Pearson UK.
Weetman, P., 2019. Financial and management accounting. Pearson UK.
Yaacob, H. and Nahar, H.S., 2017. Investigating Awqaf Management, Accounting and
Investment Practices in Malaysia: The Case of a State Religious Institution. Global
Journal Al-Thaqafah, 7(1), pp.59-70.