Management Accounting Report: BTEC Level 4, Unit 5, HNC in Business

This report delves into the core concepts of Management Accounting, offering a comprehensive analysis of its various types and reporting methods. It explores the critical role of budgeting, including budgetary control and the advantages of planning tools. The report highlights the differences between Management Accounting and Financial Accounting, and examines costing methods such as marginal and absorption costing. Furthermore, it discusses the advantages and disadvantages of planning tools, and provides insights into different Management Accounting systems adopted by organizations. The report concludes with a summary of the key findings and includes a list of relevant references, providing a thorough understanding of the subject matter.

Unit 5: Management
Accounting

TABLE OF CONTENT
 Introduction
 Management accounting and it's types
 Different types of management accounting reporting
 Difference between Management Accounting and financial accounting
 Marginal and absorption costing
 Advantages and disadvantages of planning tools
 Management Accounting system
 Conclusion
 Refernces

INTRODUCTION
 Management Accounting assist managers by identifying collecting analysing and
measuring all the financial information so that managers can take but a decision for
the company.
 The entire report demonstrated about various types of Management Accounting.
Along with this various methods of Management Accounting reporting is mentioned
in this report.
 Amazon is and American multinational company which deals in e-commerce
products.
 This report provides in-depth information about advantages and disadvantages of
various planning tools which is being used for budgetary control.
 Apart from this various Management Accounting system which has been adopted by
different organisations is also be discussed in this report.

MANAGEMENT ACCOUNTING AND
IT'S TYPES
 Management Accounting which is popularly known as managerial accounting is a
continuous process of preparing data and providing all the necessary data which is
related to financial and non financial factor to the management on timely manner.
 All these data have been used by the management on day to day basis so that they
can further take short term and long term decisions for the company.
 All the information which is given by Management Accounting further analysed
and summarised by the management and communicate to All the departments of
the company.
 Apart from this most of the companies uses different principles of management
accounting through which the can

TYPES OF MANAGEMENT
ACCOUNTING REPORTING
Budget report
 Budget report plays a critical and essential role for the organisation because
with the help of proper budget management can review the overall
performance of the company. Every department of the organisation creates
there on budget report so that they may know how much expenses they have
made and how much earnings and cash flow that have generated for the
company.
 Management can check the past budget reports as well so that they can take
accurate decisions in the favour of the company.
Cost Management Accounting report
 Cost Management report describes the cost of Production and Manufacturing
of the product.

DIFFERENCE BETWEEN
MANAGEMENT ACCOUNTING AND
FINANCIAL ACCOUNTING
Management Accounting Financial accounting
Management Accounting provides report and
detailed information about the products profit and
various segment of customers so that management
can make certain decisions for the future of the
company.
Financial accounting only focuses on providing all
the financial information and result to the
company.
Management accounting provides financial and
non financial details to the company
Financial report only provide financial facts to the
company.
Management Accounting do not follow any
particular standards and regulations.
Financial accounting follows proper standards.

MARGINAL AND ABSORPTION
COSTING
 Marginal costing refers to the cost of item in total of all the direct material
cost direct labour cost and indirect expenses of the company apart from
this it also states about the variable production cost of the company.
 Marginal costing also uses the volume of production and the overall
variable cost it also States about fixed cost and variable cost.
Absorption costing
 Absorption costing is used to value the inventory it includes all the cost of
material labour and various variable fixed manufacturing cost.
 It provides detailed information about the direct material labour and
manufacturing overhead to the company so that all the selling and
manufacturing administrative expenses can be occurred.

ADVANTAGES AND DISADVANTAGES
OF PLANNING TOOLS
Budget
 Budget is a detailed statement which provides financial result of the company for a accounting year.
Budget provides all the necessary information about the expected revenue and expenditure of the
company.
 Budgetary control is one of the Planning tool which is used for making plans and strategies to control
the overall production of the company and helps the company to safeguard the unnecessary cost and
also it promotes the coordination and control width within the different departments of the company.
Budget report is a detailed report which provides information of each and every department of the
company and helps the various departments to earn the budget goal by evaluating the budgetary report.
Advantages of budgetary control
 Budgetary control is necessary for communicating and coordinating all the activities in between the
different departments of the company.

MANAGEMENT ACCOUNTING
SYSTEM
 Various new and old businesses are using different Management Accounting system so that
they can recognise the resources for measuring the overall performance of the company and
also recognise the financial issues which are related to the Sourcing of funds. Management
 Accounting helps the organisation to evaluate the various financial and non financial
indicators which helps the organisation to know the overall expenses and how to set budget
for the upcoming years.
 The major key performance indicators which is being used by the organisation are financial
and non-financial factors which provides long-lasting benefits and goals to the organisation.
Debt ratio
 This ratio is also known as liquidity ratio and current ratio of the company which provides
all the relevant details about the short term loans and obligations..

CONCLUSION
 From the above report can be concluded that the entire report
demonstrated about Management Accounting and its various
types.
 This report provides detailed information about various
methods which is being used for management account reporting.
 Apart from this various advantages and disadvantages of
planning tools which used for budgetary control is also
mentioned in this report.
 How different organisation uses various adapting Management
Accounting system is also described in this report.

REFERENCES
 Drury, C., 2018. Cost and management accounting. Cengage Learning.
 Lapsley, I. and Rekers, J.V., 2017. The relevance of strategic management
accounting to popular culture: The world of West End Musicals. Management
Accounting Research, 35, pp.47-55.
 Speckbacher, G., 2017. Creativity research in management accounting: A
commentary. Journal of Management Accounting Research.(3)pp.49-54.
 Oboh, C.S. and Ajibolade, S.O., 2017. Strategic management accounting and
decision making: A survey of the Nigerian Banks. Future Business Journal.3(2).
pp.119-137.
 Abernethy, M.A. and Wallis, M.S., 2019. Critique on the “manager effects” research
and implications for management accounting research. Journal of Management
Accounting Research.31(1).pp.3-40.