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Management Accounting : Bentley Motors Ltd

   

Added on  2021-02-20

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Management Accounting

Table of ContentsINTRODUCTION...........................................................................................................................1ACTIVITY 1....................................................................................................................................1PART A...........................................................................................................................................1P1............................................................................................................................................1P2 ...........................................................................................................................................3M1 ..........................................................................................................................................5D1 ..........................................................................................................................................6PART B............................................................................................................................................6P3 ...........................................................................................................................................6ACTIVITY 2..................................................................................................................................11PART A.........................................................................................................................................11P4..........................................................................................................................................11P5..........................................................................................................................................15CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................19

INTRODUCTIONAccounting management is the method of preparation business records and accountswhich provide exact data about the business, in specific time period (Laudon and Laudon, 2015).These reports are presenting into financial and statistical information to present in front ofmanagers. On the basis of these reports they take routine basis decision. In the business preparetwo types of reports in a manner of financial accounting and financial accounting. Inmanagement accounting reports are providing to internal management while financial accountingprovides external people who related within organisation. It is also called as cost accounting andmanagerial accounting. In other words, management accounting is a systematic procedureswhere business activities conduct in particular steps and prepare program for management forcoordinate and dominant a company. Bentley Motors Ltd, which is a British engineering firm,has been chosen to understand the significance of management accounting. It was established byH.M. in 1919. In London, Bentley.The assignment focus on different types of system as well as report in order to connectwith company process in direct manner. To evaluate the range of management accountingtechniques prepare an income statement using marginal and absorption cost. Apart from thereport, for budgetary control apply various types of preparation tools and compare with otherorganisation to respond of financial difficulty. ACTIVITY 1PART AP1Management Accounting – Management accounting is assist informations to gather datafrom several resources to present in front of top executive. In current time period,differentcompany use gather information to take decision. It is considered as a ongoing process in whichall functional and executive operations are specifically carried out, supervised, controlled andidentified. For all the companies it is essential to assist the performance of company which isgood or not. In selected company managers execute strategic decision for improvement of abusiness (Plumb and et.al., 2017). Management accounting system – It can be described that system is applied intoorganisation to collect information from several department. There are analysing and1

determining the financial data of company in reference to take appropriate decision in day to dayactivities. These are the basic business practices that is essential for the growth of the servicessector industry. These kinds of management accounting scheme are designed by a departmenthead and submitted to business management to enable them to create short-term daily companychoice. Management uses four kinds of scheme in Bentley Motors Limited to present their realstatus as well as business results. Supervisors attempt to keep adequate accounts with theassistance of them.Cost accounting system It is applied by companies to evaluate the cost of several types of products which isrelated to manufacturing. It will help to computation of correct costs at each and every level ofproduction may have more important to an organisation in order to find out which services areprofit making or which one's are loss bearing. In respective company, apply this system tocalculate the cost of each and every car engineered by a business. It is important for business dueto recognise actual cost of production. So it will help to calculate and evidence all of thatexpenses separated. After the process analyze the results with actual aspects to measureperformance of business (Hilton and Platt, 2013). Inventory management system The particular system mainly used by manufacturing company to analysis information ofstock at each level of production. It is often utilised at warehouses of shopping malls, digitalmarketing business stores, manufacturing organisation and other industry by using access tags,scan of bar codes to control goods inflow and outflow of finished goods. This scheme is veryhelpful in Bentley Motors Limited to determine whether or not the organization has adequateproducts for engineering vehicles. It can help to reduce wastages and provide way to betterutilisation of resources. There are described three kind of stock list arrangement system as wellas company utilisation same of the above as per the requirement - LIFO (Last in first out) – According to this method, which inventory come in last that isused for production process first. FIFO (First in First out) – According to this method states that stock manage according toorganisation and which are using firstly that was came first for business activities. AVOC (Average Cost Method) – This method define that for the business all types ofstocks are used on average cost for manufacturing. 2

In Bentley Motor limited applied FIFO method for production process because it issuitable for various types of models of cars. Price optimisation system This system is mainly utilised for set right price of each products which is manufactured intocompany. They are trying to set price according to clients requirement and meet expectations togenerate more profits (Hopper and Bui, 2016). This system can help to organisation get getoptimum result and earn profit more than cost. In Bentley Motors Limited, applied this system inorder to set accurate price of their cars then evaluate the reaction of customers for their products.So it will help to collect information from different clients regrading to their manufacturingproducts. As a result it will guide to manager to set appropriate price that supports to fulfil therequirement of customer and reach tobusiness goals. So company select best pricing strategy toget success in business. Job order Costing system It is a costing system which is related to specific job role and related to cost of productionactivities of business. In the context of Bentley Motors Limited, used particular system todetermine the costs of all processes which are conducted as per the client specification. It isconsidering as important system due to provide help to analysing of actual cost of each job whichis presented by a company. The particular system mainly used by those enterprises which aredirecting the operations of business as per the client's orders. All the above effectively applied in the Bentley Motors limited and it can help to todetermine the efficiency of a company and execute plan of action judgement for improvement ofit. P2 Management accounting reports It is a procedurewhere various types of reports are produced to provide detailedinformation to top management (Stein and et.al., 2015). These information are connected toseveral division and help to understater the position of company and how to conduct futureinvestment to get more profit. These reports are helping to decision making process as well asproviding accurate information. This process evaluate the firm's performance by formulating andimplementing the infrastructural services so that business can be more efficient in future. In Thisstudy is conducted annually in Bentley Motors Limited to monitor records of the company's3

method. There are many techniques used by company executives to generate various kinds ofreports - Budget Report – This reports is prepared by every organisation to analysis of everydepartment and collect relevant information which can help in future. It is consider as inner studythat is utilized by director to comparison real and calculate outcomes of a company. The mainpurpose to prepare of this report to analysis of all monetary resources to utilised in company ornot. In selected company,supervisor evaluate financial performance and provide data. On thebasis of these data understand that business is good or not (Turban, Volonino and Wood, 2015).Budget reports has been prepared on weekly basis and compare that business is getting theirgoals and objectives or not. At the time preparation of budget define about these human activitysuch as Sales, marketing, purchase etc. It is beneficial for business to assess business executionof an organisation. Performance Report – The particular report produced by organisationas a reason ofanalysing performance of an organization and employees. Performance report used by businessto provide incentive as well as bonus to employees according to their work. As a resultemployees motivate and provide their best. In Bentley Motors limited prepared of this typereports and it can help to attain business goals and objectives. It can observe the performance ofcompany and staff members in particular accounting period of time after that provide rewardthem. It still directs managers to decide quickly and strategically whenever the business are notdoing well.Accounts Receivable Report – This type report produced to to analysing the credit salesin particular accounting period time. Such records save all the documents and allow users tocreate these document kinds by payment. It enables record all expired loan memoranda and date-based unused client receipts. In the reference to Bentley Motors Limited formulate of thesedocument to find out the amount of owed by clients. The main reason to prepare of this report toevidence collection to those people who take products on credit and paid amount after somemonths. So it is important to keep record of those people to collect amount in particular period oftime. It is beneficial for management to understand prominent measure of various clients. Ifmanager strict for credit policy so customers on time give money back. Inventory Management Report – It is generated by company to record all detailedinformation about raw materials and other inventories which is used in manufacturing process.4

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