Management Accounting for Jaguar Land Rover

Unit 5
MANAGEMENT ACCOUNTING

Executive Summary
The report has assessed the financial strength through the tool of accounting present in the
management of Jaguar Land Rover. The growth of economic status has been evaluated through
the management accounting process. The financial condition of Jaguar Land Rover has been
assessed with the help of the accounting tools is provided in the report. Different planning tools
help organisations to achieve an effective strategy for the budgetary plan with estimated
planning. It increases the performance of the company. It also helps in measuring the
performance of the employees to acquire effective growth.
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Table of Contents
Introduction........................................................................................................................4
Activity 1............................................................................................................................4
Part A..............................................................................................................................4
Explanation of Management Accounting (P1)............................................................4
Essential requirements of different types of management accounting systems (P1) 4
Explanation of the different methods used for management accounting reporting
(P2).............................................................................................................................5
Management Accounting Techniques............................................................................6
Benefits of management accounting systems and their application (M1)..................6
Critical evaluation of the integration of management accounting systems and
management accounting reporting (D1).....................................................................7
Part B..............................................................................................................................7
Calculating the costs using appropriate techniques of cost analysis for preparing an
income statement using marginal and absorption costs (P3, M2, D2).......................8
Activity 2..........................................................................................................................12
Part A............................................................................................................................12
Compare and contrast three planning tools used in management accounting,
indicating how effective (P4, M3, D3)..........................................................................12
Planning tools ..............................................................................................................12
Part B............................................................................................................................14
Comparison of adapting management accounting systems to respond to financial
problems in different organisations (P5)...................................................................14
Conclusion.......................................................................................................................16
Reference List .................................................................................................................17
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Introduction
The report has provided an analysis of the management accounting for Jaguar Land Rover to
assess their financial strength. Management Accounting has been one of the management
analytical tools for any organisations for increasing the growth in monetary status. It provides
the role of the management and technique for analysing the financial condition of the company.
The report has reflected the benefits of using management accounting along with the process of
implementation for the company. It provides a way to eliminate the financial problem from the
company effectively.
Activity 1
Part A
Explanation of Management Accounting (P1)
The advancement of technology has manifested a continuous change in the accounting system as
well as other aspects of life. The methods of creating a report of management through analysing
the accounts of any companies accurately with the period can be termed as the management
accounting. It provides statistical information which has been required by the managers for
evaluating the short-term and long-term decision. It provides both financial accounting reports
that analyse the external stakeholders; however, it has reflected a weekly summary of the
organisation's internal stakeholders. The report generally shows the current financial status of
any companies such as cash, sales revenue, debts and other inventory. As suggested by Messner
(2016), the concept of management accounting has accepted as tools of the manager to assess the
company’s financial report to understand the current state it and creating an easy way for
decision-making process. In order to sustainability in the market, companies have been shifting
from the traditional accounting system to the modern management accounting system. It
provides the information of both internal and external stakeholders to forecast the organisation's
inventory management for the value position of it in the market. The tool helps in tracking the
status of the stakeholders for identifying most efficient of them for the betterment of the
organisations.
Jaguar Land Rover has implemented the management accounting system which has been
controlled by Joshua Lee. He possesses the skill of management accounting form the CIMA
(Chartered Institute of Management Accountants). The management accounting has helped the
company to assess the current matrix and value position in the market. The accounting tools
have helped to assess both financial data and non-financial data for the present and future
prospects of the business. It has often contributed to identify the risk prevails in the organisation
and mitigate through quick decision and planning of operational development. It analyses the
cost and periodic cost along with constraints analysis for the organisation.
Essential requirements of different types of management accounting systems (P1)
The main purpose of the management accounting system is to provide relevant data to the
managerial department for creating a suitable decision-making process. As suggested by
Schaltegger and Burritt (2017), there have been various parameters which should be measured
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