Analysis of Management Accounting Systems at Brooklands Hotel

This report provides an in-depth analysis of management accounting practices, specifically focusing on the application of these principles within the Brooklands Hotel, located in the United Kingdom. The report begins with an introduction to management accounting, highlighting its role in providing financial and statistical information to managers for decision-making. It then delves into the specific requirements of various management accounting systems, including inventory management, price optimization, job costing, and cost systems, illustrating their importance for the hotel's operations. The report further explores different methods of management accounting reporting, such as account receivable aging, budget management, job costing, and inventory reports, emphasizing their significance in monitoring performance and facilitating effective financial control. The report also covers advantages and disadvantages of different types of budgetary control and effective management accounting system which can be adapted by the company. The report concludes by summarizing the key findings and their implications for the hotel's financial management. The report is a valuable resource for understanding the practical application of management accounting in the hospitality industry and is available on Desklib, a platform providing students with AI-based study tools and resources.

Management Accounting

INTRODUCTION
Management accounting is the process of making the report of management and account
that provide appropriate statistical information required by the managers to make their daily
basis decision. When company use management accounting in their organisation, then it provide
the accurate financial information which is required by the managers. The present report is based
on Brooklands hotel which is located in the England, United Kingdom. Hotel is providing the
effective hospitality services and accommodation to the people. In the present report, explanation
of management accounting and requirement of different types of management accounting system
are covered. Other than that, different types of management accounting reporting and appropriate
techniques of cost analysis and their difference are discussed. Along with this, in the report
advantages and disadvantages of different types of budgetary control and effective management
accounting system which can be adapted by the company is covered.
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P1 Explanation of management accounting and requirements of various types of management
accounting system
Definition of management accounting: - It involves preparing and providing the financial and
statistical knowledge to the enterprises manager, so that they can make the daily basis and short
term decision in the company. Management accounting also known as the cost or managerial
accounting and it is different from the financial accounting. In the management accommodation,
they can include details of the organisation's available cash, sales revenues, accounts receivable
and payable (Otley, 2016). When organisation prepare this type of report in their enterprise, then
it will be confidential and for internal use only, as opposes to financial accounting statements,
which are publicly reported. Along with this, management accommodation reports provide the
outstanding debts of the company, inventory report, trend chart, analysis of variance and raw
material of the production. It is the effective system of the Brooklands hotel and they are using
some important management accounting system in their business. Requirements of various types
of management accounting systems are given below:
Inventory management accounting system: - It is one of the important management
accounting system of Brooklands hotel. In this system, company can prepare the entire reports of
sales revenues, purchase, return and raw material of the production. It is the procedure of
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ordering, storing and utilize the organisation's inventory as raw material, components and
finished goods. An organisation's inventory system is very valuable assets. Along with this, it is
very essential management accounting system for the business. Through it, they can use some
software, and they can save their all information and data in the software. Other than that,
Brooklands hotel is able to maintain their inventory system using by the accurate data of the
sales revenues, purchase, return and raw material of the production. The company is providing
the hospitality and accommodation services to their customers, and they should manage the all
customer information, their room services and spa services of the business. However, they
should use the inventory management accounting system for their enterprise. Through it, they
can manage the accommodation and spa services of the company. There are different types of
department in the organisation, but some time they can not maintain the all services in the
business, so they can use the inventory system and they should provide training about the
inventory management accounting system to their all valuable employees. However, they can
learn the use of inventory system (Renz, 2016).
Price optimising management accounting system: - Company is selling the different types of
products and services on different prises. Price optimising system is based on the different price
of the products and services of the Brooklands hotel. According to this system, company should
know about the respond of the customers on different prices. There are number of people who
are using the services of the accommodation and spa. They can compare the entire services with
another company's services in the market. However, through this management accommodation
system, manager can identify the all respond of the customers. Along with this, when they will
provide the products and services to their valuable customers, then it is very necessary that they
will provide that products and services in minimum price. Other than that, they should analysis
the price of the products and services of their competitor, so it will be easy for the business and
they can easily sale their products and services in the market. Company should set their prices
according to market and the customers, so they can purchase or use the services and products of
the organisation (Chenhall and Moers, 2015). Other than that, price optimising management
accounting reports provide the effective determination of the different price and response of the
all customers in the market. Moreover, Brooklands hotel should use the price optimising
management accounting system in their business, however they will able to provide effective
hospitality and accommodation services to their customers.
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Job costing management accounting system: - It is the most valuable and important
management accounting system of the Brooklands hotel. They are using this system in their
enterprise. Job costing system is using for the tracking all cost and revenues by the job enable
standardized reporting of the profitability. In the company, number of employee are working as
executive, labour, and managers. So, they should know about the productivity of the employees.
Other than that, there are different types of department in the organisation and allotted them
some task and work, but some time some employee can not able to get their own target and goals
which are provide by the company. Job costing system can provide the accurate data of the
productivity of all employees in the company. Along with this, through this system they can
know about the all expenses and cost of the job. This system shows that employees and labour
are getting their target and goals or not (Cooper and Qu, 2017). After examination and analysis
of the job costing system they can able to prepare all report of the productivity of the employees
in the business. Moreover, job costing system is very useful for the Brooklands hotel. They are
providing the effective services to their customers trough the employees, so they should know
about their productivity.
Cost system: - There are number of employees, and department in the company. They are using
the effective technology for their operational work and also using the machinery and equipment
for the production. When they use this all components in their company, they expense on this all
system which is used by the organisation. However, cost system can provide the accurate
information of costing of the machinery, employees, raw material and equipment of the business.
Job costing system only show the productivity of the employees but cost system shows the all
expenses in the business. Along with this, there are different types of operation work and task
which is accomplish by some software, technology and machinery. So, they should have
knowledge about the all expenses in the system. If they are not able to get the al information,
then it will not beneficial for them. Cost management accounting system is valuable in the
Brooklands hotel (Fullerton and Widener, 2014). It provide the accurate cost of entire system of
the business. Other than that, all expenses, wages, and cost of the company provided by the cost
system of management accounting.
P2 Various methods of management accounting reporting
It is the process of preparing the performance report of the company. Through
management accounting, organisation can know about the performance of all factors in the
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business. It is the very important function of the company, however they should use in their
business. Other than that, there are different types of department and employees in the
organisation. Through this management accounting reporting, manager can monitor the all
performance of the employees, department and production team in the company. Along with this,
manager can able to prepare different types of report for the business. Through management
accounting reporting, company can prepare the budget report, inventory, job cost and account
retrievable report (Kotas, 2014). Moreover, this reports are very valuable in the business, so
Brooklands hotel should use the all reporting system of management accounting in the
organisation. Requirements of various types of management accounting reporting are given
below:
Account receivable aging report: - This management accounting report is used by the
organisation for unpaid invoices. Brooklands hotel is providing some credit services to their
customers and then they are managing all customers who are using this services in their
company. Further, through account receivable aging report, they can know about the customers
who are not paying their outstanding amount to the company. Along with this, there are number
of customers who are using the hospitality, accommodation and spa services of the Brooklands
hotels. Some customers are paying advance, cash and some customers using the credit services
of the company. Manager are managing the all information of this types of customers in their
inventory. However, when they are not able to pay their outstanding amount then manager can
give them warning, then they have power to take some serious action against the customers. One
of the effective benefit of this report is, company can get the outstanding amount of the
customers. Through this report, they can able to increase their profitability and brand value in
the entire market.
Budget management accounting report: - It is the internal report utilized by the Brooklands
hotel to compare the estimated, budgeted presentation with the real performance number
achieved during the period. There are difference types of department and employees in the
company. Along with this, company is using some technologies for production and operation
work of the organisation. When they evaluate the productivity of the employees and performance
of the production team, then can know about the all outcome of the department. On the other
hand, they can know about the benefits and profit of the company. When they will be able to
know this al information, then they can prepare the budget report of the company. There are
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number of factor from company can not able to get their target and goals of the business. So,
through this report organisation can increase their budget on the high performance factor of the
business (Hopper and Bui, 2016.). Along with this, manager can decrease their budget on the
lower performance of the department. Budget report Is very useful for each and every
organisation, so Brooklands hotel should use the budget report in their business. Through it they
can able to increase their profitability and revenues of the enterprise.
Job Costing report: - Organisation has responsibility that they does examine about the all
performance of the employees in the organisation. There are number of employee in the
company, but they all are not able to provide their high level of performance to the company.
However, manager should use some effective activities to know about the performance of the all
workers in the organisation. Along with this, through job costing report they can know about the
productivity, improvement and performance of the employee. Other than that, when some
employee are able to provide their better performance in the company then manager can provide
them some incentives and bonus for their good work. Through this activity employee can be
motivated in the organisation. Moreover, there are number employee who are not able to provide
their effective performance in the company, so manager can reduce their budget on the lower
performance of the employees. It is very important process and report of the company to know
about the performance, implement and activities of the workers. Job cost reports based on the
performance, improvement and abilities of the entire employees and labour of the production
team (Tappura and Nenonen, 2015). Managers should have knowledge of the productivity and
performance of the all workers of the company. If they are found about the lower performance of
the employee then they should provide them some effective training session and development
program for increase the abilities and skills.
Inventory report: - Company is selling different types of products and services in the market,
and this all data can be saved in the inventory system. When they are using this system in their
business, then manager can prepare a report for the inventory performance of the company.
Along with this, in the inventory report they can know about the performance of the sale,
purchase, return, and raw material of the production. Along with this, they can get the positive
and negative impacts on the enterprise. Through inventory report, they can examine about the all
data of the organisation which can be used for the business. In the report they are managing their
al data of sale, purchase, return ,and outstanding, however hen they need they can see the all
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information in this report. There are number of entries saves in the inventory system and they all
have different advantages and disadvantage in the business. However, they should analysis of all
inventory system then prepare the report of inventory of the business. They are managing their
sale, outstanding and purchase data in the inventory system. Along with this, it is very
confidential data and information of the organisation. They have no rights to explore the data in
outside area of the company. Through inventory report they can evaluate the all performance of
the data. They can keep their data and information in very effective or secure place. It is very
important report of the company's data and information.
Brooklands hotel is using the above methods for management accounting reporting.
These all are the very important and valuable factors of the organisation. When they are using
this report for their business, they can able to increase their budget on the higher performance of
the factors of the business. Along with this when they found the lower performance of the factors
of company, they can reduce their budget on that department or factors of the business. Other
than that, they can provide some training session and development program for the employees
who are not able to get their target and goals of the company. However, thorough the training
session and development program then can able to increase their information, knowledge,
abilities and skills. It will help them at their work place. So, they will be able to increase their
performance and improvement in the company (Bromwich and Scapens, 2016). There are
different types of reporting system of management accounting which can be used by the
Brooklands hotel. Through it, they can increase their productivity of the employee, profit of the
business and brand value in the market. When they get this all things in the company, then they
will be able to increase faith and loyaly of the entire customers.
LO 2
P3 Appropriate techniques of cost analysis to prepare an income statement
Marginal cost: - The decision making technique for ascertaining the entire cost of production is
known as marginal cost. Organisation apply the variable cos and it is considering as cost of the
products while fixed cost is considered as period cost under the marginal costing. Though this
cost technique, Brooklands hotel can evaluate their profit and revenues by the ratio of profit
volume in the enterprise. Along with this, it provide the all contribution of each goods of the
organisation.
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Income statements by marginal cost: -
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Absorption cost: - Absorption of total cost to the cost centre in order to examination the
all cost of the production is known as absorption costing. Through this cost technique, company
can include the fixed and variable cost in their business. Due to the inclusion of fixed cost, profit
gets affected, however this is no more beneficial from the marginal costing (Tucker and Parker,
2014). Along with this, this technique for the inventory evaluation whereby entire then
manufacturing expenses are allocated to the cost centres to know the total cost of the production.
Income statements by absorption cost: -
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Difference between marginal and absorption costing: -
 Marginal costing is known as decision technique for ascertaining the all cost of the
production and accurate of the all cost to the cost centre in order to examine the all cost
of production is known as the absorption cost.
 Marginal cost applies on specific unit of production and absorption cost applies on entire
production to entire unit produced (Tucker and Parker, 2014).
 Marginal cost is based on the variable and fixed whereas absorption cost is based on the
sale, distribution and production of the company.
 Contribution of the profit measurement under the marginal costing and gross margins is
used under the absorption cost.
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