Management Accounting Report: Business Development at IMDA Tech

This report provides a comprehensive overview of management accounting principles and their practical application within IMDA Tech, a Singaporean info-comm development authority. It explores the essential requirements of different management accounting systems, including strategic, performance, and risk management aspects, as well as methods for reducing expenses and improving cash flow. The report details various management accounting reporting methods such as budget reports, accounts receivable reports, job cost reports, and inventory reports. It delves into cost analysis techniques, including relevant cost analysis, activity-based costing, and make-or-buy analysis, to support effective business decisions. Furthermore, the report examines the advantages and disadvantages of budgetary control tools and how management accounting can be adapted to control financial costs, ultimately contributing to improved business operations and financial returns for IMDA Tech. The report also highlights the importance of cost accounting, inventory accounting and job accounting systems.

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Management accounting and essential requirements of different management accounting
system.....................................................................................................................................3
P2 Different methods used for management accounting reporting........................................5
TASK 2............................................................................................................................................9
P3 Cost analysis of different approaches................................................................................9
TASK 3..........................................................................................................................................10
P4 Advantages and disadvantages of budgetary control tools in IMDA Tech.....................10
TASK 4..........................................................................................................................................13
P5 How to control financial cost by adapting management accounting..............................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management Accounting includes various financial and non financial information which
is used by the management accounting officers to make better decision makings. So,
management accounting principles provides support in management decision making, planning,
performance management system, provide support in financial reporting and helps the
management of company in formulation and implementation of organisations strategy. All these
principles are used by the management accounting officer of company to collect information and
make decisions regrading different important matters. IMDA tech is info comm development
authority of Singapore. It is media development authority which invite tech community to come
with technological ideas and provides the solutions to address the problems (Hopwood, Unerman
and Fries, 2010).
In the present report explain about, Management accounting and requirement of
management accounting systems, different methods which are used for management accounting
reporting, preparation of income statement using marginal and absorptional costing and calculate
different costs by use of appropriate techniques of cost analysis. Here also describe about,
advantages and disadvantages of different types of planning tools which are used for budgetary
control and adoption of management accounting system by the accounting officer of company to
address financial problems.

TASK 1
P1 Management accounting and essential requirements of different management accounting
system
Management accounting: It is the process of preparation of reports and accounts which
provides accurate and financial and non financial information which provides the support to the
manager of company to make day to day and short decisions regarding important aspects of
company. Management accounting reports are different from financial report which only
provides information for external stakeholders, but management accounting reports provides the
information regarding internal audiences of company like managers and chief executive officer
of company. These reports includes information about cash, sales revenue, outstanding debts,
raw materials, variance analysis and other important data. All these informations help the
manager of company to interpret situations effectively and make valuable strategies which adds
value to the working of organisation. So, the management accounting officer of IMDA tech uses
all accounting principles to maintain the accounts of company and provides the relevant data to
general manager of company to make proper use in effective decision making, planning,
performance management of their employees and formulation of organisational strategies.
General manager of IMDA tech. Uses such management accounting practices in main three areas
which are described below:
Strategic management: These provisions makes advance role of management
accountant of company to be a strategic parter of organisation.
Performance management: Such information provides the opportunity to manager
compare the actual performance of their employees with standards which are made by them and
provide solutions.
Risk management: These practices provides identification, measuring, managing and
reporting risk to achievement of organisational objectives effectively (Kotas, 2014).
Reduce expenses: Management accounting system helps the company to reduce their
operational expenses. These system provides the opportunity to the manager of company to
review their business operations and economic resources which increase the profitability of
company at minimum cost. Cost accounting system is used by manager of company to provides

information regarding cost incurred to run different departments of company and allocation
funds as per their requirements.
Improve cash flow: To improve their cash flows management of company takes the
helps of budgets. Budgets are important part of management accounting which contributes by
effectively planning about the future business expenditures and financial road map. These
budgets prepared by the accounting officer of company on the basis of historical financial
information. This provides the opportunity to the general manager of cited company to
effectively allocate the funds to different departments of company to complete their tasks.
Different management accounting system are used by the accounting officer of IMDA
tech. To effectively operate the functions of company and make strategies which are described
below:
Managerial accounting: This helps the management of company to plan, control
manage the operations of business. This provides the opportunity to make important decisions
regarding important activities of company. Managerial accounting includes cost accounting. This
provides the information regarding cost incurred in delivering the service and comparison with
budgets which are made by management. It helps in identification of the deviation from the
actual cost and follow up to solve them. Another accounting which is covered in managerial
accounting is lean accounting which involves examination of processes and results for creation
of value at less cost and by eliminating waste of resources. So, both the accounting methods
helps the manager of company to make plans effectively and achieve the organisational targets.
Inventory accounting: This accounting is used by the manager of IMDA tech. To
determine about the level of stock in company and problems related there too. The system is
called as bar code tracking. Each stock of company has bar code and whenever they moved from
warehouse such bar code is scanned and entry makes in system. This helps the management to
keep the record of their stocks and ensure minimum wastage. Another method of inventory
accounting is RFID, it is a new technology which have expanded use as compare to bar code.
This system attached to the stock of company and whenever they move gives signal which is
detect by the management to track the inventory. This system provides actual movement of
inventory in real time.

P2 Different methods used for management accounting reporting
There many methods are used by the accounting officer of IMDA tech. To provide their
different managerial reports. These reports provides various important information about
different aspects of company which helps the general manager to make better decision making,
planning and preparation of strategies which contributes in achievement of objectives effectively.
These reports provides the opportunity to monitors the performance frequently throughout
accounting periods and make recommendations to match their actual level with predetermined
standards. These reports present by the accounting officer of company on basis of sensitivity of
information, quarterly, monthly, weekly or daily. Different management accounting reports
which are used by the management of IMDA tech. To provide information different matters are
described below:
Budget report: These reports provides the opportunity to evaluate the performance of
small companies and if the organisation is big, it helps the manager to analyse departments
performance and control the costs. The estimated budget is decide on the basis of expenses of
previous years (Lambert and Sponem, 2012). These budgets are used by the manager of
company to provide incentive to their employees on the basis of their performance. Such
incentives are provided as bonus to employees to meet specific financial goals. So, such budgets
helps the manager of IMDA tech. To effectively allocate the fund to different department of
company and coordinate the different functions of company to accomplishment of organisational
objectives.
Accounts receivable report: This report is useful for the manger of company to
effectively manage the cash flow. This report includes information about amount due from
customers and credit time which is given to them. These reports are used by the manager of
company to find out the problems with company's allocation process and if the customers are not
able to pay their dues within stipulated time then they have to tighten their credit policies. This
helps the management of company to effectively collect their dues from their customers and
overlooking of their old debts.
Job cost reports: This report shows expenses which are incurred by the company for
completion of specific project. This provides the opportunity to management of company is
determination of estimate revenue that can be earned by company from such project. It helps in
evaluation of jobs profitability. The manager of IMDA tech. Can find out the areas which are

high earning, so the management can focus on those area and make effort to effectively manage
functions of such area. These reports provides expanse and profits arrived by company from
some specific project, so they can effectively allocate the costs to important areas of project
which have more profit margin.
Inventory and manufacturing: These reports includes the information regarding stock
of company. This report is used by the manager of IMDA tech. To make their inventory
management more effective and efficient. These reports includes inventory waste, hourly labour
cost and per unit overhead costs. To improve the management of whole company, manager has
to consider the strategies adopt by different assemble line and provide bonus to departments
which are performing well in organisation.
There are many benefits of management accounting system which provides the
opportunity to achieve the organisational targets effectively (Li and et. al., 2012). For this
purpose accounting officer of IMDA tech. Has use many accounting systems like cost
accounting system, inventory accounting system, job accounting system etc. All these accounting
systems have their own importance in managing the operations of company efficiently. These
systems are used by the accounting officer of company to make different accounts which
provides important information regarding different aspects which helps in decision making,
planning, risk management, performance management, variance analyses etc. This helps the
management of company to compare the actual performance of their employees with standards
and find out the deviations. As per such deviation they provide further solutions and make future
plans to improve their performances. Such other benefits of management accounting system is
described below:
Business decisions: The main benefit of management accounting system is that it
provides the information regarding various aspects of business which helps the management to
make better decisions about future actions of company. This helps to anticipate consumer
demand, potential sales or the effect of price changes. This enables the company to provide good
services to their customers and attain competitive advantage.
Increase financial return: Management accounting system are used by company to
increase their financial returns. This helps the management of company to financial forecast
about the different activities like consumer demand, effect of price changes etc. This provides the

opportunity to them to make effective budget which provides appropriate funds to departments to
meet out their needs for completion of their tasks.
Effective implementation of management accounting system and management accounting
reporting helps the management of IMDA tech. To lead in the market and provide better services
to their consumers. Both the concepts have their great impact on the business operations of
company (McNeil, Frey and Embrechts, 2015). Those concepts which contributes in controlling
of business operations are described below:
Relevant cost analysis: Management accounting and reporting system provides the
opportunity to management of company to interpret important information and take effective
decisions regarding costing of operations of company in order to minimise their costing.
Management reporting system provides various options which helps the management of
company to control the cost of operations. It is the duty of manager to select best method which
suited the functions of company more.
Activity based costing methods: This method provides the opportunity know about the
cost required at each level of activity and benefits which are derived from such operations. This
helps the management of company to focus on important areas of project which have high level
of revenue.
Make or buy analysis: Management accounting provides information regarding costing
of services which are provide by them. This helps the management of company to take decision
regarding outsourcing of services or either self providence to their consumers.
Utilising the data: Management accounting and reporting system provides the important
information regarding various important aspects which can be used by the manager of company
to make plans and strategies. This helps the manager to improve the performance of their
employees (Morales and Lambert, 2013).
There are many techniques of management accounting are used by the manager of IMDA
tech. To produce appropriate financial documents are defined below:
Financial planning: This includes about the planning of future financial actions of
company. This includes preparation of budget, allocation of funds etc. This helps the company to
fulfil both short and long term financial needs.
Analysis of financial statements: This includes about the evaluation of financial
documents of company like P&L account, balance sheet etc.

Standard costing: This can be sued by the management of company to fix cost for
transactions and compare with actual costs and find out the deviations and provide solutions
regarding that.

TASK 2
P3 Cost analysis of different approaches
Income statement as per absorption costing
Particulars Amount Total
Sales value (35*600) 21000
less:
Cost of Production 9600
Gross Profit 11400
LESS:
Fixed and variable cost:
variable sales overheads (600*1) 600
Admin & selling cost (700+600) 1300
Less: over absorbed fixed production overheads -100 -1800
Net profit 9600
As per marginal costing
Particulars Amount Total
Sales 21000 (600*35)
Less: Variable cost
Direct material
Direct labour
3600 (600*6)
3000 (600*5)

Variable production overhead
Variable sales overhead
1200 (600*2)
600 (600*1) 8400
Contribution 12600
Less: Fixed cost
Production overhead
Administration cost
Selling cost
2000
700
600 3300
Net profit 9300
TASK 3
P4 Advantages and disadvantages of budgetary control tools in IMDA Tech
Budgetary control is the process which is used in organisations to control cost of product,
prepare budgets (cash, sales, purchase, cost), making strategies and plans. There are different
tools are used in budgetary control process. Organisation take help of budgetary tools to reduce
the level of risk from market uncertainty. Budgets are made to analyse future requirement and
find out estimated conflicts which may occur in future. These tools provide a path and guide
managers to operate functions. These records are prepared as per last years records and figures.
Accurate estimations and budgetary control support the organisation to absorb uncertainty and
provide competitive advantage.
Advantages of budgetary control tools
Maximisation of profitability
Making business operations smooth and easy to increase profitability and revenue are the
main perspective of budgetary control process (Dumitru and et. al., 2011). There is an
appropriate and formal way is chosen to communicate planning and decision making process.
Income and expenditures are the main sources which are use to frame the process. These sources
are used in effective and appropriate manner.
Proper co-ordination
It is very important that informations and details must be conveyed to departments
properly. It helps in maintaining coordination and communication among departments.

Building aims –
The overall budgetary control process provides a path to achieve desired results and
goals. It helps in bifurcate the goals as per the format of multiple departments and sub-ordinates.
Without defining goals efforts and resources will be worthless.
Performance measurement tool
organisation's departments are operated by its task force which contains employees,
leader and managers. This tool helped in analysing the performance of employees in respect of
achieving goals and objectives of organisation. Targets and goals are set for every department
and team. After making effective performance management budget every individual performance
is analysed with actual and budgeted results.
Economy
Budgetary control process work to reduce extra efforts and centralise those efforts on
required fields and areas (Tessier and Otley, 2012). This helps in managing resources in
systematic manner. Proper management of operations improve the image of organisation which
attract economic interest of nation. Ethical and systematic manner of operations and management
enhance organisation growth and support national economy by providing employment.
Corrective actions
There are different type of conflicts and challenges occur regarding employees'
behaviour, ethics and performance (Leitner, 2013). In that situation budgetary process help in
analysing the fact regarding discrepancy and provide a path to take a corrective action plan to
deal with situation.
Identity budget consequences
Budgetary reports, figures and data are taken to frame new budgetary policies and plans.
It helps in identifying the barriers which increase resistance in decision making and planning
process.
Cost reduction
Different type of budget formations like cost budget, purchase budget and cash budgets
are prepared to reduce cost of product and maximise profitability of organisation. There is a
comparative strategies and plans are implemented to analyse the effect of budget on functional
departments and manufacturing process of organisation.
Find out weakness