Sustainable Development through Management Accounting Techniques

The provided assignment discusses the role of management accounting in attaining sustainability in business operations. It highlights the use of various techniques such as KPI and benchmarking, financial governance, standard costing, break-even analysis, and scenario planning tools by Zylla company to overcome financial issues and achieve sustainable development. The report also compares the management accounting practices between Zylla company and Rowlinson Kintwear.

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 ................................................................................................................................................1
P2.................................................................................................................................................2
M1 ..............................................................................................................................................4
D1................................................................................................................................................4
TASK 3............................................................................................................................................4
P3:...............................................................................................................................................4
M2...............................................................................................................................................6
D2................................................................................................................................................6
TASK 3............................................................................................................................................7
P4:...............................................................................................................................................7
M3...............................................................................................................................................8
TASK 4..........................................................................................................................................10
P5 :............................................................................................................................................10
M4.............................................................................................................................................11
D3..............................................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Nowadays everyone is striving hard to gain the competitive advantage in other firm.
Management Accounting is the most effective tool which can be used in the business for gaining
the competitive advantage. This is the report which is made by the management accountant in
order to gain the sustainable development in an effective manner. Various management
accounting systems are used in this report (Management Accounting, 2017). However, there is a
high requirement in order to gain the sustainability in an effective manner. On the basis of these
accounting systems, various reports are made under this. Net profits are calculated by using
absorption and marginal costing that can be used. Various planning tools are used in order to
control the budgetary systems in an effective manner. This report is made on the Zylla company
which mainly deals in retail clothing segments and also used in the project which are used in the
organisation for gaining the sustainability.
TASK 1
P1
Management accounting is the procedure which helps in identifying, analysing,
evaluating ans assessing the non-financial information for a particular period of time. However,
there is a strong needs to make a certain tools that can be used in order to gain the sustainability
in an effective manner. The main benefits of the management accounting systems are to gain an
effective decisions in an effective manner. However, there are various management accounting
systems are used:
Job costing system: This is the system which does not only calculates the costs of an
individual product. On the other hand, this is the most effective tool that can be used in order to
gain the sustainable development. Here, the cited company needs to adopt the job costing system
in their production process so that the manufacturing process can be run effectively. Now, there
is a strong need to adopt their tools that can be used for gaining the sustainability. This is an
alternative use which is to oversee if any kinds of extra costs covered could be billed to the
clients. This costing systems is to collect costs during a small unit level. For instance, job costing
is effective for deriving cost of making a custom machine, designing a software program, making
a building, or production a small batch of the products. Job costing systems covers the following
accounting activities:
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 Materials: This covers cost of factors and after that assign these kinds of costing to a
product once the various factors are used.
 Labour: Employees charges their time to the particular jobs, that are then allotted to the
jobs which are relied upon the labour cost of the employees (Amoako, 2013).
 Overhead: This covers overheads costs in cost pools and after that this allocates these
kinds of costs to the jobs.
Cost accounting system: This is the system which can be used by the organisation in
order to lower the cost of the product efficiently. However, this management accounting tools are
used in order to gain the competitive advantages in an effective manner. Cost accounting system
is the main crucial tool that can be used by the organisation in order to lower the cost in an
effective manner. The production department of the cited organisation would get to know about
their business objectives in an effective manner. Henceforth, there is a strong need to adopt this
accounting system in the organisation's process for gaining the competitive advantages in an
effective manner.
Price optimising systems: This is the most effective tool that can be used by the
management accountant in order to know the price of the competitors in an effective manner. By
knowing the price of the rivals' product, cited organisation could fix the price of their product
and gain the competitive advantage in an effective manner. This is the system that can be used by
the organisation for effective services.
Inventory management systems: this is the system which can be used by the
organisation for gaining the sustainable development in order to gain the pre-set objectives. By
using this technique, company could effectively use their available resources in an effective way.
Now the cited company would get to know about the performance of the cited organisation's
inventory so that their business could gain the sustainability in an effective manner.
These are the systems that would help out gain the sustainable development in an effective
manner. Now, there is a strong chance to know about the business in an effective manner by
using management accounting systems.
P2
Management accounting systems are the most effective tools which can be used by the
organisation in order to make the reports for the concerned departments. There are so many
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reports which can be made by the organisation in order gain the sustainable development in an
effective manner. Here are some of the reports which are made hereunder:
Budget reports: This is the reports which is made on the future forecasting of the
revenue and expenses in an effective manner. Now, there is a chance in order to gain the
sustainable development. This budget reports helps the organisation to make strategies about the
future forecasting in terms of the revenues and expenses (Vinayagamoorthi and et. al., 2012).
This is simply said that the budget can be made in order to gain the sustainability in an effective
manner.
Accounts receivable reports: This is the report which is made on the basis of the
debtors. Here are certain tools which can be used by the organisation in order to know about the
debtors earnings in an effective manner. Here are certain tools that can be used by the
organisation in order to know the financial viability in an effective manner. There are certain
tools that can be used by the organisation in order to make certain pre-set tools in an effective
manner.
Job Costing report: This is the reports which is made by the manufacturing department
in order to make the business product cheap so that the competitive advantages can be gain in an
effective manner. Now, there is a strong chance to make the business objectives in an effective
manner. Job costing reports are made after assessing the business objectives in an effective
manner.
Inventory management report: This is the report which is made on the basis of the
inventory of the cited organisation. There is a strong needs to make certain objectives by
knowing inventory of the cited organisation (Macinati and Anessi-Pessina, 2014). This is the
report which is made on the basis of the concerned objectives in an effective manner. By using
this report, management accountant uses diverse objectives in order to implement the certain
objectives in an effective manner.
Performance report: This is the report which is used by the organisation in order to
assess the positive results of an activity of an organisation. This report might compare the actual
outcomes to budgeted or standard, and also use the deviation between the two figures. The
recipient of the performance report is forecasted to have action at the time of unfavourable
variance. Here are some of the instances of performance reports:
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 Employees' attain an annual performance report, which explaining their activities versus
their actual action plan.
 A project manager attain a periodic performance report which would ultimately noting
cost and time to over run the latest project outline.
 A local body issues an annual performance report which demonstrating the services
rendered by diverse city departments.
There are above mentioned report which can be used by the organisation in order to make
sustainability in an effective manner. However, there is a strong chance to implement them in
order to attain the pre-set objectives in an effective manner (Lim, 2011). The cite organisation
would also make strategies in order to gain the competitive advantages in an effective manner.
M1
Management accounting systems helps to know about the cost of product effectively.
However, there are certain tools which can be used by the organisation in order to assess the
objectives of the Zylla company. These management accounting systems helps to overcome the
price of the products efficiently. These kinds of the objectives would helps out to gain the
benefits in an effective manner. Accountant would get to know about the management systems
and apply where it essential. There are so many tools which could be used by the organisation in
order to assess the performance of the cited organisation effectively.
D1
There are so many tools which can be used by the organisation in order to integrate the
organisational processes. MA systems would help out to form management accounting report so
that the efficient and reliable decisions can be taken out for the firm's development (van Helden,
and Uddin, 201). It is helpful for efficient smooth operations of their functions. But, this can be
rightly said that only one of them would able to gain the sustainability in an effective manner.
TASK 3
P3:
Marginal costing: This is the costing tools which covers marginal costing that covers
variable costing of the firm. However, this does not covers the fixed cost that can be used by the
organisation in order to gain the sustainability in an effective manner. However, this is the most
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effective tool that can be converted into various kinds of tools. Here the marginal costing is used
in order to know the profitability.
Absorption costing: This is the costing method that covers all the fixed and variable
costs which can be helpful for knowing the costs of the product in an effective manner. However,
this can be rightly said that the management needs to adopt this tool for assessing the value of the
profitability in an effective manner.
Net profit using marginal costing ￡Amount £ Amount
Sales value
Less: Variable costs
Stock at the beginning
Cost of production
Stock at the closing
Variable sales overheads
Contribution
Less: Fixed costs:
Fixed Production overheads
Fixed Selling overheads
Net loss
NIL
30000
(7500)
15000
10000
52500
22500
(7875)
22125
(25000)
-2875
Income statement as per the absorption costing:
Selling Price per unit ￡35
Unit costs
Direct materials cost ￡8
Direct Labour cost ￡5
Variable manufacturing overhead ￡2
Total variable production cost ￡15
Fixed production overhead ￡ 5
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Fixed production overhead incurred actually
Fixed selling & distribution expenses
Variable selling & distribution expenses
Sales
￡15,000
￡10,000
15% of sales value
2,000 units
Net profit using absorption costing Amount ￡ Amount ￡
Sales value
Less: Cost of Sales:
Opening stock
Cost of production
Closing stock
(Under)/Over absorbed fixed production overhead
Gross Profit
Less: Selling Expenses
Variable sales expenditure
Fixed selling expenditure
NIL
40000
(10000)
7875
10000
52500
(30000)
(5000)
17500
17875
Net profit/loss -375
M2
In this cited case, cited organisation is needed to implement the management accounting
systems in order to enhance the profits in an effective manner. This would assist to run their
business activities in an appropriate manner (Gates, Nicolas and Walker, 2012). These methods
would implemented by the management accountant for enhancing productivity of the
organisation. These kinds of tools are implemented and crucial for each departments for the
organisation in order to gain an efficient decisions for organisation's growth and attain their
objectives.
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D2
The net profits that are achieved along with the assistance of absorption and marginal
costing. Here are various methods which can be used in order to know and optimise the net
profits in an effective manner. By using marginal costing and absorption costing tools, net profits
is identified. By using absorption costing technique, company occur losses of 375 an in marginal
costing losses, while using marginal costing, company have 2875 losses which is more than the
net profits calculated by using absorption costing. Henceforth, this is rightly said that the
absorption costing is much than the marginal costing technique.
TASK 3
P4:
Budget is the tool which helps to forecast the revenues and expenses for a particular
period of time. This helps to know about future value of the Zylla company that would ultimately
help out to gain the sustainability in an effective manner. Budget is the main tools which would
gain the sustainability in an effective manner. Various budgetary tools are used under this and
their advantages and disadvantages are mentioned under this in an effective manner. In other
words, it is one of the most important effective method and technique where company manager
can predicted their total cost and expenditure that are going to incur with the help of an
organisation. Along with this, it is systematic and predetermined gathering of recording for
particular time period. It is effective framework of planning and operations for specific target
groups or teams. Generally, it is prepared for around five years. This can be precede if outcome
are not in considerable.
Budgetary control- It define as effective method and tool that is used in business
operational activities that includes controlling, planning and monitoring performance of the firm.
In this, it is actual income and whole spending can be analysed along with planning revenue. It is
necessary for company is to follow the certain process for maintaining balance (Hiebl and et. al.,
2015).
Process of budgetary control Research with concern managers- It is essential stage for company managers where they
are developing and making accurate evaluation about requirements of budgets within an
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organisation. Along with this, budget are made after consulting with each type of
departments. Determination of appropriate assumption- After collecting data and information from all
division that includes marketing, finance, HR and operation. This prediction is made
about common strategies and policies which estimate future. Set organisational information for budgets to accomplish targets- In this procedures,
the very famous list of details data has been prepared by collecting data that are gathered
from department. Measurement of data with actual- The position of an organisation is evaluated with
using actual data and information according to the standard. By this, they are getting
accurate results of performance in proper manner. Review analysis- This is the last step under budgetary control. So company manager can
looks about describing steps which required before developing into specific actions.
Planning tools- In an organisation, planning define the administration method which
mainly associated with vision of firm. There are different types of methods which are used to
control budget that are as under:
Forecasting tools- This is based on assumption that is based on internal control
management which consist with effective skills, knowledge and decision making procedures. It
is relies on historical information and data for predicting data and facts (Jalaludin, Sulaiman,
and Nazli Nik Ahmad, 2011). These prediction assist the administration to understand about
industry trends and desired occurrence that are arise in the market such as prices, demand and
labour.
Advantages- It is important for industries which analyse the setting goals and targets.
Company manager can predicted total cost and sales volume which occur in the future.
Disadvantage- At some time, this is not consider as important method to forecast the
whole assumptions and it is complex for estimate total expenses or cost of company.
Scenario analysis tools- For the using of this method, managers can achieve their
response according to their latest trends in market. This will help in doing planning, operating
and investing management of an organisation.
Advantages- In this, manager can generate effective ideas regarding their selection and
future opportunities which are always uncertain.
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Disadvantage- It can be analysed that it is not so appropriate along with changes in
strategies or policies which are not able to generate correct result (Zang, 2011).
M3
Various planning tools are used by the organisation in order to make certain sustainability
in an effective manner. However, this can be rightly said that the management needs to adopt
various management tools which can be used in order to gain the competitive advantages. There
are above mentioned planning tools which could be used in order to control the budgets in an
effective manner. However this can be rightly said that the business objectives in an effective
manner.
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TASK 4
P5 :
Zylla is small organisation which deals in retail clothing. In providence of business
functions and accomplishment of their objectives, many issues are arise which affects their
working efficiency (Vakalfotis, Ballantine and Wall, 2013). This will results in raise of many
financial issues which lowers down the capacity of organisation regarding accomplishment of
their objectives. The main reason which is analysed that such issues are arise due to use of
outdated technologies. Some other issues which contributes in the development of the financial
problem is Zyalla are mentioned below:
 Product and services quality: One of the major aspect which is associated with the
working of Zylla is low quality of their products which does not satisfies the different
demands of customer. This will arise lowers down their sales and profit.
 Control and management system: It is observed that there is lack of control and
monitoring system within the organisation which results in duplication of activities and
improves cost of production.
Management accounting is important concept which includes different tools and
techniques provides the opportunity to the management of Zylla to overcome from their financial
issues. Such different tools are defined below:
Key performance indicators: It is important technique which helps in collection of
information from different sources (Bodie, 2013). It is further classified into two parts which are
named as financial and non financial.
Financial indicators: This will includes different types of financial documents like
income statements, balance sheet and cash flow statements which helps to ascertain the financial
issues and position of organisation in current scenario. There are different terms which helps to
respond and identification of issues are defined below:
 Current ratio: This shows the ability of organisation to pay their short term debts
through application of short term assets.
 Quick ratio: It helps in assessment of liquid assets with the organisation to pay their
debts.

 Working capital: This shows about solvency of organisation which helps in
performance of day to day functions.
Non financial indicators: This includes such indicators which are related to the
employees, company profile, quality of product etc. The contribution of such factors in
assessment of issues and response is defined below:
 Management of human resources: To attain success in their business operation need to
manage their employees in effective manner as they are important assets (Lukka and
Vinnari, 2014). This provides the opportunity regarding reduction of staff turnover,
improvement in the job offers accepted etc.
 Product and service quality: There are many financial problems are arise due to low
quality of products. In this regard, they need to use innovative techniques which
contributes in attainment of sustainability in their operations.
Benchmarking: Another important technique which helps to respond financial issues
which are arise in Zylla. As per the provision of this approach, organisation is need to set the
standards which guides the employees in performance of their different tasks and
accomplishment of organisational objectives in more optimum manner.
Comparison between two companies
Zylla company Rowlinson Kintwear
It uses the techniques of KPI and
Benchmarking which helps to improve assess
issues and implementation of effective
strategies
For accomplishment of their objectives within
stipulated period of time by following the
SMART objectives
Use of tool Financial governance to fulfil the
regulation provided by government
Budgeting technique is used to forecast future
actions to improves performances
M4
The role of management accounting for attaining sustainability in the business operation
is understood from the points which are defined below:
 The manager have the duty is to provide support in preparation of strategic goals which
guides employees (Wickramasinghe and Alawattage, 2012).
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 The different management accounting tools like standard costing and break even analysis
helps in integration of the different important aspect in organisational processes.
 Provisions of management accounting helps in development of production reports which
contains the information regarding sustainability impacts. This is further used to improve
understanding about pricing and budgeting decisions.
D3
There are many planning tools which helps in solving financial problems for attaining
sustainability in their business functions which are defined below:
 Scenario tool: One of the important planning tool which provides the opportunity
regarding early determination of risks. It contributes in formulation of contingency plans.
 Forecasting tool: This tool helps in preparation of budgets which guides employees in
performance of their functions (Hilton and Platt, 2013). Through this objectives are
attained within stipulated period of time.
CONCLUSION
From the above mentioned calculation, this can be rightly said that the Zylla company
would use various management accounting techniques in order to gain the sustainable
development. Various management accounting systems are used under this for achieving its pre-
set targets effectively. On the basis of these systems, various reports are made for making the
sustainable development. Net profits is calculated by using absorption and marginal costing
approach so that the profitability can be attained. Various planning tools are used for budgetary
controlling of the cited organisation. In this report, financial problems are assessed by
implementing management accounting.
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REFERENCES
Books and Journals:
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