Management and Accounting: MA Systems, Methods for Management Accounting Reporting, Calculation of Costs

Management and Accounting
Unit 5

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
P 1. MA systems.........................................................................................................................1
P 2. Different methods used for management accounting reporting...........................................2
P 3. Calculation of costs using different techniques of cost analysis .........................................4
ACTIVITY 2....................................................................................................................................6
Part A...............................................................................................................................................6
P 4. Benefits and limitations of budgetary control......................................................................6
Part B...............................................................................................................................................9
P 5. Comparison of how organization respond to different financial problems.........................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Management Accounting is the process where the management uses the accounting
provisions in order to take better decisions for the organisation. It takes into account various
accounting such as Tax accounting, Financial accounting and Managerial Accounting. In this
Financial Accounting is the main for taking any decision related to the organisation because it
covers all the financial information of the company. Qbic Hotel is engaged in the Hospitality
industry and located in the city of London. Company was established in year 2009. Hotel is fully
having free WiFi facility and rooms are at affordable rates. In the hotel every room is fully
furnished and available with proper facilities. Hotel is also having a section of tea/ coffee and
different breakfast section.
ACTIVITY 1
P 1. MA systems.
Management accounting
Management accounting is an essential process which helps internal stakeholders of the
organization in providing timely information to the both financial and non- financial
management in taking strategic decision which helps in attainment of long term and short term
goal and objectives of the Qbic Hotel on time.
Management accounting systems
Managerial accounting system is an effective measure which evaluates the operations of
the business and also helps in controlling cost by taking strategic decision. The MA system helps
in forecasting the future, formulate plan, analyse variance and take necessary decision for future
growth and success of the company.
Cost accounting system
This system helps in analysing and estimating the cost of the products manufactured by
the company (Dale and Plunkett, 2017). It leads to higher profitability and growth for the
business. Cost system effectively determines the accurate cost of the each goods produces and
services rendered for accurate estimation of the profit.
Inventory management system
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This system of MA keeps a proper track of the level of inventory, orders, finished
products, sales and deliveries (Feiner, Polymer Logistics Israel Ltd, 2019). This also helps
management in determining the level of material required for producing particular products.
Price optimization system
This system help in determining the behaviour and attitude of the customer with the
change in the prices of the goods and services offered by the Qbic Hotel (Taleizadeh, Noori-
daryan and Cárdenas-Barrón, 2015). This system focuses on determining and estimating the best
price which will cater large customer base, higher market share and operational profit.
Job costing system:
This system of MA helps in accumulating and distribution cost of each individual unit of
production (Maskell, Baggaley and Grasso, 2016). This system helps in determining the cost of
various different products. This system effectively evaluates direct and indirect cost attached to
produce single unit of the output.
P 2. Different methods used for management accounting reporting
Management Accounting reports shows the complete picture of Qbic Hotel that how they
are performing through preparation of various reports such as budget report, Account receivable
aging report etc.
Budget report
Budget reports are prepared in order to know where the Qbic Hotels have allocated extra
costs. Budgets are compared with the actual performance of the company. By evaluating the
budgets whether they are over budget or under budgeted company takes necessary decisions
(Diouf 2017). Budgets are prepared on the basis of previous years actual performances for the
following year and finds out places to cut costs.
Account Receivable Aging Report
Preparation of this report is necessary for Qbic Hotels because they show that in how
many days company converts its debtors into cash. This report helps the company in adjusting
the credit policies to align them with the consumers' repayment capabilities. This report is very
crucial for all the companies because it shows the lack in the credit policy of the company.
Account Payment Aging Report
This report is prepared for knowing that in how many days Qbic Hotels pay to its
creditors. This report helps in the adjusting the credit policies of the company in order to know
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