Analyzing Management Accounting for Sustainable Success at BPI Plc

This report provides a detailed analysis of management accounting systems and reports within British Polythene Industries Plc (BPI Plc). It begins by exploring various management accounting systems such as cost accounting, inventory management, job costing, and price optimization, highlighting their essential requirements and benefits. The report then discusses different types of management accounting reports, including budget reports, accounts receivable aging reports, departmental reports, and product/service profitability reports, emphasizing their importance in achieving organizational goals. Furthermore, the report evaluates the benefits of these systems and critically assesses their role in enhancing efficiency and effectiveness. The second part of the report focuses on cost calculation methods like marginal costing, along with planning tools for budgetary control. Finally, the report compares organizations and analyzes how management accounting aids in addressing financial problems, leading to sustainable success for BPI Plc. This student-contributed assignment is available on Desklib, a platform offering a wide range of study resources and AI-powered tools for students.

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management Accounting Systems........................................................................................1
P2: Management Accounting Reports.........................................................................................3
M1: Evaluation of benefits of Management Accounting Systems..............................................4
D1: Critical evaluation of Management Accounting Systems and Management Accounting
Reports.........................................................................................................................................5
TASK 2............................................................................................................................................5
P3: Calculation of costs...............................................................................................................5
M2: Accurate application of the techniques................................................................................9
D2: Producing of financial reports...............................................................................................9
PART 2..........................................................................................................................................10
TASK 3..........................................................................................................................................10
P4: Planning tools for Budgetary Control..................................................................................10
M3 Analyse the uses of different planning tools and their application for preparing budgets .12
TASK 4..........................................................................................................................................12
P5: Comparison of organizations...............................................................................................12
M4 Analysis how, financial problems are responding, management accounting lead
organization to sustainable success ...........................................................................................14
D3 How planning tools for accounting respond used to solving financial problems that leads to
sustainable success ....................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management Accounting refers to the use of methods and techniques through which the
decisions which are useful can be taken and this can be done through the use of Financial
Analysis and Interpretation through which the conclusions and recommendations can be derived
(Agus Pramuka and Pinasti, 2020). Therefore, for the management of needs and requirements it
is essential to be used. For this report, British Polythene Industries Plc has been selected. It is a
British Company which manufactures polythene products and provides them to satisfy the
customers and fulfil their needs and requirements. In this report, a detailed and specific focus
will be made on the way in which its use has to be made so that the efficiency and effectiveness
level can be enhanced in a right way.
PART 1
TASK 1
P1: Management Accounting Systems
Management Accounting refers to a process through which the financial analysis and
interpretation can be done so that the better decisions can be taken (Al-Dmour, Zaidan and Al
Natour, 2021). The managers of British Polythene Industries Plc are required to make sure that
its proper use is made.
There are various types of Management Accounting Systems. The Systems which can be
used are as follows-
Cost Accounting System- This is a particular system in which a detailed and proper
assessment of the costs can be done (Al-Natsheh and Al-Okdeh, 2020). Therefore, in this way it
can be stated that for an organization like British Polythene Industries Plc can make sure that it is
able to make the use of this system to be able to attain the overall goals and objectives in a right
way.
Essential requirements-
 In this system the proper and detailed assessment of the costs can be carried out which
will be quite helpful. This is needed so that the identification of the way in which these
costs can be reduced can be done which will be important for enhancing the profits in a
proper way.
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 In this system the right approaches should be adopted so that the right conclusions and
recommendations can be drawn. This will be important so that the appropriate actions
should be taken.
Inventory Management System- In this system the use of methods and techniques
which are important for the management of stock items should be carried out (Allawi, Mijbil and
Hussein, 2020) (Arif and et.al., 2020). For an organization like British Polythene Industries Plc it
is essential that a proper and right use of this system can be done so that the stock items can be
managed in a right way.
Essential requirements-
 In this system the proper and detailed management of the wide range of stock items
should be ensured. It will be required so that the inventory can be managed and thus the
reduction in high inventory costs can be carried out.
 In this system the right way of reducing the costs related with the management of the
inventory items is required to be identified. A proper track record of the stock items can
be maintained when a tracking system is used and this will be useful for the increase in
the overall value.
Job Costing System- In this system the identification of the way in which the
management of the job orders should be done should take place which will thereby help a lot in
ensuring that the overall level of efficiency and effectiveness is raised (Azizi, Khanmohammadi
and et.al., 2021). Thus, the managers must be able to make the right use of this particular system.
In British Polythene Industries Plc, this system is required to be used so that the management of
job orders can be done in quite a proper and appropriate manner.
Essential requirements-
 In this system the identification of the way in which the management of the job orders is
required to be done should be ensured. This will be useful in identifying the particular
way in which the job orders can be tracked so that the attainment of the necessary goals
and objectives can be done.
 In this system the right way of reducing the excessive job costs should be used so that the
excessive costs can be reduced quite effectively and efficiently. Therefore, in this way it
can be stated that this will be helpful for the purpose of ensuring an enhancement in the
overall level of job profits.
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Price Optimization System- In this system, the identification of the prices which are
required to be set has to be done which will thus be quite useful in setting up the prices which
can lead towards the maximization of the overall level of profits (Bebbington and Unerman,
202). For British Polythene Industries Plc, it is quite important and crucial that it is able to use
this particular system in such a way so that the enhancement in the overall profits can be done
which will therefore help the company a lot in the future.
Essential requirements-
 In this system the prices are required to be set in a proper manner by ensuring that the use
of the right mathematical and statistical methods can be done. In this way, the appropriate
prices can be set so that the profitability can be enhanced in a right manner.
 In this system the comparison of the prices should be facilitated which will therefore be
quite helpful in ensuring that the attainment of the goals and objectives can be done.
Therefore, In this way the management of the prices can be done in quite a right manner.
P2: Management Accounting Reports
There are various types of Management Accounting Reports which can be used within
the different types of organizations (Bracci and et.al., 2021). It is quite necessary and important
that the use of these particular reports can be made for the purpose of attaining the goals and
objectives-
Budget Reports- These are the reports which are related with the management of the
different types of Budgets and therefore are quite important and crucial to be used so that the
right and appropriate management of the different types of needs and requirements can be carried
out quite effectively and efficiently (Chigoziri, 2020). For the managers of British Polythene
Industries Plc it is therefore necessary that the right use of these reports can be made by it quite
appropriately and properly.
Accounts Receivable Aging Reports- These are the reports which are related with the
management of the different types of Accounts Receivables. Through making their proper and
right use a list of the Accounts Receivables can be prepared and therefore it can be ensured that
the right management of these Accounts Receivables is done in a right way quite effectively and
efficiently (Khan and Islam, 2020). The management of British Polythene Industries Plc is
required to ensure that it is able to use these reports in a right way for the attainment of the
necessary goals and objectives.
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Departmental Reports- These are the reports through which a detailed measurement of
the performance level of the departments can be carried out which will be helpful in the
attainment of the necessary goals and objectives and therefore can be useful for the targeting of
enhancement in the overall level of efficiency and effectiveness in a better way.
Product/Service Profitability Reports- These are the reports through which the
measurement of the overall level of profitability level can be carried out (Krokhicheva and et.al.,
2020). Therefore, in this way it can be stated that for the use of these reports can be made so that
the right actions for the purpose of enhancing the overall level of profits can be taken which will
be helpful for the attainment of the necessary goals and objectives in the future. It is therefore
necessary that a right and proper use of these particular reports can be made by the managers of
the organization.
M1: Evaluation of benefits of Management Accounting Systems
There are various benefits of Management Accounting Systems. Cost Accounting System
is helpful in the determination of the costs and the identification of the right actions to be taken
to reduce these costs. Inventory Management System is quite helpful for the particular purpose
of identification of the stock items and the management of the inventory in quite a right way. Job
Costing System is quite helpful for the proper management of the different types of job costs and
the assessment of the steps to be taken to reduce them. Price Optimization System is helpful in
ensuring that the right prices are set and therefore the level of profitability can be enhanced. For
British Polythene Industries Plc, it is necessary that it makes the right use of these particular
systems in a proper manner.
D1: Critical evaluation of Management Accounting Systems and Management Accounting
Reports
They are quite important for the organizations because through making their proper and
right use the overall level of efficiency and effectiveness can be raised. Therefore, it is quite
important and necessary that the organizations are able to find out the way in which they can be
used so that they can appropriately take the right steps towards the attainment of the sustainable
level of success in the future. Thus, the managers are required to make sure that they can find out
the way in which they are able to make the appropriate use of these particular reports which will
lead towards the attainment of the necessary goals and objectives in the future in a better manner.
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Therefore, it is highly crucial that the enhancement in the overall level of efficiency and
effectiveness can be raised in the organization through making their proper use. This makes them
important for British Polythene Industries Plc.
TASK 2
P3: Calculation of costs
There are various types of costs which can be incurred within an organization. Therefore,
it is quite important and necessary that their assessment can be carried out so that the attainment
of the goals and objectives can be done quite effectively and efficiently (Mudiyanselage and
Chathurani, 2020). For the management of British Polythene Industries Plc, it is therefore
essential that the right assessment of the costs can be carried out. For this purpose, it is essential
that the use of the following methods and techniques can be made-
Marginal Costing- It refers to the technique/system in which the presentation of the
sales and cost data can be done so that the short term decisions like sales mix selection, make or
buy, acceptance of special order etc. can be taken (Perveen and et.al., 2017). Therefore, it can be
used by the managers for the purpose of cost control, budgeting and profit planning purposes.
For the managers of British Polythene Industries Plc, it is quite important that it can be used for
the particular purpose of attaining the goals and objectives.
Advantages-
 This technique is very simple to understand and easy to operate. Therefore it is quite
helpful for the organization.
 Through making its use, the impact on profit of fluctuations in the volume of sales can be
identified.
Disadvantages-
 The total costs cannot be segregated into fixed and variable costs when the use of this
technique is made.
 When the use of this technique is made the calculation of variable overheads does not
includes all the variable overheads.
Absorption Costing- It refers to the ascertainment of the costs once they have been
incurred. Therefore, it can be stated that its use is quite important for the organizations so that
they are able to make sure that they can attain the necessary goals and objectives (Rahman and
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et.al., 2018). Therefore, it can be stated that for the managers of British Polythene Industries Plc,
it is highly necessary and important that the use of this technique can be made so that the
attainment of the goals and objectives can be done.
Advantages-
 This technique is quite useful for the purpose of determination of cost of production and
therefore helps a lot in ensuring that the right actions can be taken.
 This technique has a higher-level of acceptability and therefore in this way it can be
stated that this can be quite helpful.
Disadvantages-
 This technique is not useful for the particular purpose of cost allocation and therefore this
creates a problem for the organization.
 This technique is not helpful for the purpose of management decision making and
therefore this creates a problem for the organization.
Therefore, in this way it can be stated that for an organization like British Polythene Industries
Plc, it is quite important that it is able to make sure that it makes the use of these techniques for
the purpose of attainment of the necessary goals and objectives. In this way, the overall level of
efficiency and effectiveness can be enhanced in quite a proper manner which will be highly
helpful for the organization.
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M2: Accurate application of the techniques
An accurate application of the techniques can be done in the organizations like British
Polythene Industries Plc because in this way the determination of the excessive costs can be
carried out. Therefore, through making the use of the methods and techniques these excessive
costs can be reduced. In this way the overall level of profits of the company can be enhanced so
that the attainment of the goals and objectives in the future can be carried out.
D2: Producing of financial reports
Financial reports are quite useful for the organization in ensuring that the appropriate
financial analysis and interpretation can be carried out. Therefore, for the management of British
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