Management Accounting Report: Evaluating Bentley Motors' Accounting

This report provides a comprehensive analysis of management accounting practices at Bentley Motors Ltd. It begins with an introduction to management accounting, differentiating it from financial accounting and highlighting its role in internal decision-making. The report then delves into specific systems employed by Bentley Motors, including cost accounting, inventory management, price optimization, and job order costing, detailing their benefits and applications. It further examines various management accounting reports, such as budget reports, performance reports, accounts receivable reports, and inventory management reports, illustrating their significance in monitoring and evaluating the company's performance. The report emphasizes the integration of these systems and reports within the organizational processes, concluding with an overview of cost analysis and its impact on the company's operations. The report utilizes the provided text to analyze the management accounting practices of Bentley Motors Ltd, focusing on cost accounting systems, inventory management, price optimization, and job order costing systems, along with various management reports such as budget reports and performance reports.

Management
Accounting

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

INTRODUCTION
Accounting management is the method of preparation business records and accounts
which 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 of
managers. On the basis of these reports they take routine basis decision. In the business prepare
two types of reports in a manner of financial accounting and financial accounting. In
management accounting reports are providing to internal management while financial accounting
provides external people who related within organisation. It is also called as cost accounting and
managerial accounting. In other words, management accounting is a systematic procedures
where business activities conduct in particular steps and prepare program for management for
coordinate 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 by
H.M. in 1919. In London, Bentley.
The assignment focus on different types of system as well as report in order to connect
with company process in direct manner. To evaluate the range of management accounting
techniques prepare an income statement using marginal and absorption cost. Apart from the
report, for budgetary control apply various types of preparation tools and compare with other
organisation to respond of financial difficulty.
ACTIVITY 1
PART A
P1
Management Accounting – Management accounting is assist informations to gather data
from several resources to present in front of top executive. In current time period, different
company use gather information to take decision. It is considered as a ongoing process in which
all functional and executive operations are specifically carried out, supervised, controlled and
identified. For all the companies it is essential to assist the performance of company which is
good or not. In selected company managers execute strategic decision for improvement of a
business (Plumb and et.al., 2017).
Management accounting system – It can be described that system is applied into
organisation to collect information from several department. There are analysing and
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determining the financial data of company in reference to take appropriate decision in day to day
activities. These are the basic business practices that is essential for the growth of the services
sector industry. These kinds of management accounting scheme are designed by a department
head and submitted to business management to enable them to create short-term daily company
choice. Management uses four kinds of scheme in Bentley Motors Limited to present their real
status as well as business results. Supervisors attempt to keep adequate accounts with the
assistance of them.
Cost accounting system
It is applied by companies to evaluate the cost of several types of products which is
related to manufacturing. It will help to computation of correct costs at each and every level of
production may have more important to an organisation in order to find out which services are
profit making or which one's are loss bearing. In respective company, apply this system to
calculate the cost of each and every car engineered by a business. It is important for business due
to recognise actual cost of production. So it will help to calculate and evidence all of that
expenses separated. After the process analyze the results with actual aspects to measure
performance of business (Hilton and Platt, 2013).
Inventory management system
The particular system mainly used by manufacturing company to analysis information of
stock at each level of production. It is often utilised at warehouses of shopping malls, digital
marketing 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 very
helpful in Bentley Motors Limited to determine whether or not the organization has adequate
products for engineering vehicles. It can help to reduce wastages and provide way to better
utilisation of resources. There are described three kind of stock list arrangement system as well
as 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 is
used for production process first.
 FIFO (First in First out) – According to this method states that stock manage according to
organisation 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 of
stocks are used on average cost for manufacturing.
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In Bentley Motor limited applied FIFO method for production process because it is
suitable 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 into
company. They are trying to set price according to clients requirement and meet expectations to
generate more profits (Hopper and Bui, 2016). This system can help to organisation get get
optimum result and earn profit more than cost. In Bentley Motors Limited, applied this system in
order 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 manufacturing
products. As a result it will guide to manager to set appropriate price that supports to fulfil the
requirement of customer and reach to business goals. So company select best pricing strategy to
get success in business.
Job order Costing system
It is a costing system which is related to specific job role and related to cost of production
activities of business. In the context of Bentley Motors Limited, used particular system to
determine the costs of all processes which are conducted as per the client specification. It is
considering as important system due to provide help to analysing of actual cost of each job which
is presented by a company. The particular system mainly used by those enterprises which are
directing 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 to
determine the efficiency of a company and execute plan of action judgement for improvement of
it.
P2
Management accounting reports
It is a procedure where various types of reports are produced to provide detailed
information to top management (Stein and et.al., 2015). These information are connected to
several division and help to understater the position of company and how to conduct future
investment to get more profit. These reports are helping to decision making process as well as
providing accurate information. This process evaluate the firm's performance by formulating and
implementing the infrastructural services so that business can be more efficient in future. In This
study is conducted annually in Bentley Motors Limited to monitor records of the company's
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method. There are many techniques used by company executives to generate various kinds of
reports -
Budget Report – This reports is prepared by every organisation to analysis of every
department and collect relevant information which can help in future. It is consider as inner study
that is utilized by director to comparison real and calculate outcomes of a company. The main
purpose to prepare of this report to analysis of all monetary resources to utilised in company or
not. In selected company, supervisor evaluate financial performance and provide data. On the
basis 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 their
goals and objectives or not. At the time preparation of budget define about these human activity
such as Sales, marketing, purchase etc. It is beneficial for business to assess business execution
of an organisation.
Performance Report – The particular report produced by organisation as a reason of
analysing performance of an organization and employees. Performance report used by business
to provide incentive as well as bonus to employees according to their work. As a result
employees motivate and provide their best. In Bentley Motors limited prepared of this type
reports and it can help to attain business goals and objectives. It can observe the performance of
company and staff members in particular accounting period of time after that provide reward
them. It still directs managers to decide quickly and strategically whenever the business are not
doing well.
Accounts Receivable Report – This type report produced to to analysing the credit sales
in particular accounting period time. Such records save all the documents and allow users to
create 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 these
document to find out the amount of owed by clients. The main reason to prepare of this report to
evidence collection to those people who take products on credit and paid amount after some
months. So it is important to keep record of those people to collect amount in particular period of
time. It is beneficial for management to understand prominent measure of various clients. If
manager strict for credit policy so customers on time give money back.
Inventory Management Report – It is generated by company to record all detailed
information about raw materials and other inventories which is used in manufacturing process.
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As a result company analysis that how much stock need to every level and how to utilise that for
operations. It will help to fulfil the requirement of a company and have enough stock or not to
carry out their activities. Managers of Bentley Motors Limited execute of this report top tack
record of manufacturing process (Lavia López and Hiebl, 2014). It provide advantage to
company to manage stock in appropriate manner and aware for quantity of inventory. If a
company can not capable to track record effectively so required to apply good action of plan in
good way.
M1
There are defined benefits of these system and it is applicable into effective manner as
per the requirement of Bentley Motors Ltd -
Systems Benefits
Cost accounting system  The particular method is beneficial to set of different
types of products and eliminate unproductive cost
activities.
 Due to changing activities impact on the products and
services.
Inventory Management system  It is beneficial for manufacturing company to analysis
of production level and aware for products.
 Through this system get detailed information feasibly
and save lot of time and space of energy.
Price Optimization system  This system helpful to select optimum price for their
project and help to generate profit.
 It is applicable as price structure as per the client
requirement.
Job order costing system  Through this accounting system a company know about
the cost of specific job role and analysis of past records
regarding to job costing.
 It is applicable to analysis of actual cost regarding to
particular process.
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D1
The management accounting system and management accounting reports are integrated
with organisational process because these are influencing to management in effective manner. It
is essential for organisation because it will help to get detailed information about the company
and these systems are helpful. There are applied systems are cost accounting, inventory
management, price optimization and job order costing system. These are related to specific
department and help to conduct business operations as well as activities. There is critically
evaluate that inventory management system apply for the
PART B
P3
Cost – The term of cost is amount that is acquire by a person to execute, achieve and sale
out something. There are including the valuation of resources, material, time and opportunity for
manufacturing and delivery of goods as well as services.
Absorption Costing - This technique is utilised by the director of company to determine
the cost that is connected with manufacturing activities of specific product. In Galway plc,
applied this method to assure about the costs which have taken place due to production of
various unit get absorbed from the revenues
Marginal Costing – According to this method defined that fixed cost and variable cost.
In this technique the set price for the timespan is recognized as being completely published
against the commitment and the price of the bases is convicted with variable costs. Even the
price of the item is assumed and it gives gain.
ANNEX (A)
Quarter 1
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Interpretation: As per the above calculating it is getting that company get profit in the financial
year 150750 in the income statement and net profit about 157750 in the quarter 1.
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Quarter 2
ANNEX (B)
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9

10