Management Accounting Report: Tools, Techniques, and Integration

This report provides a comprehensive overview of management accounting, encompassing its core principles, tools, and techniques. It delves into the fundamental goals of management accounting, emphasizing data collection and segregation for informed decision-making. The report explores various management styles and the importance of data relevancy, accuracy, and cost-effectiveness. It further examines different reporting methods, including budget reports, graphical representations, and specialized reports like accounts receivable and inventory reports. The report also discusses the advantages of management accounting, such as improved coordination, responsibility, profit maximization, and efficiency. Additionally, it covers the integration of management accounting within organizations, highlighting the roles of key personnel and the significance of timely and accurate information. The report also includes examples of different costing methods, such as traditional and ABC methods, along with inventory valuation techniques like FIFO and LIFO. Finally, it discusses budgetary control, its advantages, and disadvantages, along with cash forecasting, zero-based budgeting, and scenario-based planning.

Running Head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING

Running Head: MANAGEMENT ACCOUNTING
Table of Contents
Introduction.................................................................................................................................................3
Task 1..........................................................................................................................................................3
P1................................................................................................................................................................3
P2................................................................................................................................................................4
M1...............................................................................................................................................................6
D1................................................................................................................................................................7
Task 2..........................................................................................................................................................8
P3.............................................................................................................................................................8
M2...........................................................................................................................................................8
D2............................................................................................................................................................8
Task 4..........................................................................................................................................................8
P4.............................................................................................................................................................8
Disadvantages..........................................................................................................................................8
M3...........................................................................................................................................................8
D3................................................................................................................................................................9
References.................................................................................................................................................10

Running Head: MANAGEMENT ACCOUNTING
Introduction
The term management accounting can be understood as the accounting of each and every
transaction prevailing in the management. In the present business, companies are more focused
in concerning about the overall cost and settling out the strategic business decisions. These two
are considered to be the top most decisions which can be achieved through the management
accounting. This report also discusses the explanation of different roles of the management
accounting, and also how there is a proper integration of the organization. These reports display
some major differences amongst the three popular tools. Then it slides to the next topic is to
figure out the financial problems and eliminate them effectively (Cooper, Ezzamel, M. and Qu,
2017).
Task 1
P1
The fundamental goal of the management accounting is to collect the data and segregate it in
inwards as well as outwards data section so it becomes easy to access. These data assist
administrators in making basic choice in regards to evaluating, procedures, arranging, cost
lessening and so forth. In any case, while applying the administration bookkeeping techniques,
the supervisors should remember these basic necessities (Hopper and Bui, 2016).
Style of management: It is basically residing in the board which helps in influencing the overall
administration framework. It is basic to follow a particular kind of the executive’s style as it
characterizes to whom and how the data will be handled to yield a normal outcome. It is further
segregated into autocratic and democratic style (Hopper and Bui, 2016).

Running Head: MANAGEMENT ACCOUNTING
Relevancy is one of the biggest elements as it helps in deciding the relevancy of the data and
squeezing the piled up size to an informative one (Bromwich and Scapens, 2016)
Accuracy is also a determined factor that helps in vouching the exactness of the data as it is
extremely fundamental. Data with ambiguous thought is as same as no data by any means.
Information is viewed as futile in the event that it isn't from any dependable source and hence
reliability falls back to the place automatically (Ax and Greve, 2017).
Cost of the framework: It is essential to see if the use of the bookkeeping framework is
including any worth that smothers the expense of utilizing it or not. if the framework being used
yields advantage at all instead of expanding the expense acquired by the association, at that point
these expenses shall be eliminated completely.
P2
The management accounting is a significant framework which is basically used to access the
internal information and implement the administration accordingly. The administration utilizes
various strategies for announcing the announcements in the board bookkeeping.
Budget report: The budget report displays the examination of the transactions and the variance
if any on the basis of actual performance.
 Graphical report: The graphical report is the report that is used to define the
information on the basis of graphical representation. The guide of graphical report is in
reality useful for an outlined comprehension of what is happening in the internal
exhibition of the organization (Xiaoli, Wenyue and Zengbao, 2019).

Running Head: MANAGEMENT ACCOUNTING
 Scatter diagram: Scatter chart is utilized for examining the connection between two
factors. These relations can be both immediate and backhanded.
 Line diagram: Line chart is another graphical device that is utilized for graphically
speaking to example of the factors. It is plotted so that shows a variables pattern based on
number of hours, days or even years.
 Pie graph: Pie chart is the most effortless method for introducing information. The
information is divided which makes it simpler for better seeing particularly.
Accounts receivable maturing report: Those companies which provide the facility of the credit
to their clients are worried about making their performance to be productive. Accounts
receivable maturing report helps to analyze the roadblocks in the process.
Inventory report: Manufacturing organizations use stock report to breakdown the expense of
inventories. Under the inventory report the basic analysis it done on the basis of the expenses and
the administration gets an idea of how the stock is value and using which methodology and
whether they are acquiring more expense than really required (Cooper, Knight, Frazier and Law,
2019).
Job costs report: An association manages numerous ventures one after another. These ventures
assist them with gathering incomes. In any case, the truth of the matter is that not all the venture
may be productive. Hence comes in the job cost report which assists in isolating each project and
give vital data on every one of them which enables the management to squeeze the important
information with the ventures.
6) Contribution format income statement: it isolates the fixed and variable expense from one
another. With the help of the division of the income statement on the basis of the incomes and

Running Head: MANAGEMENT ACCOUNTING
expenses, the board gets an outline of the per volume cost. It is essential for them while taking
item volume choice.
M1
Nowadays, management accounting is considered to be an integral part of any organization. It
benefits an organization in so many ways.
Co-ordination- Management bookkeeping additionally enables co-to ordinate among the
individuals in the company as it gives understanding and information to the administration and in
this way giving rules to function as a group (Makrygiannakis and Jack, 2016).
Responsibility- It additionally assists with estimating the presentation of the administration
about how productivity they are overseeing costs, income, benefit and so on.
Maximization of the profit – Profit maximization is a term which deals in revealing the sectors
about the cost has been occurred. There is an indirect relationship between the cost and the
revenue such that when costs are lower the revenues are going to be enhanced eventually. This
also helps in increasing the net profit of the overall basis.
Efficiency- When the administration knows about the data about the inside business; they can
utilize them to press the better out of the circumstances they face.
Continuing Business- Management Accounting likewise helps the firm to proceed with their
creation. For instance, it manages how much creation is vital one year from now. At the point
when the data is known to the association, they would thus be able to deliver in like manner
(Ibrahim, Ali and Besar, 2020).

Running Head: MANAGEMENT ACCOUNTING
D1
The general target of managerial accounting in an association is to help live the competitive and
dynamic with the assistance of social event, preparing and imparting data. Ultimately it helps the
administration regarding arranging, checking and controlling the business procedure.
Accordingly, coordinating the administration bookkeeping in setting of the association will go
far for meeting the predetermined targets (Kaka and Price, 2017).
For the most part, in an enormous organization, there are numerous divisions doled out with
explicit undertakings to finish. Furthermore, for every division, there is a lead bookkeeper
otherwise called the controller. A great part of the administration bookkeeping is done under his
watch. Also, the controller is at risk to answer to the VP of the division. Next, the VP reports to
the divisional monetary head or the Chief Financial Officer. They all together make a solid
progression of administrative data which underpins different serious dynamic (Kruis, Speklé and
Widener, 2016).
Another important procedure is collecting the important information, timely and accurate
information. In an organization it has been seen that information is not just a process of a single
individual but lots of people are associated with it. For example the main aim of the auditing
department is to make sure if all the controls are being executed properly ad followed or not. In a
nutshell financial accounting covers all the systems and enables it to align with relevant
information. There must be some innovative offices to assist them with utilizing the technique of
management accounting framework for greater productivity (Gao, He and Zhang, 2017).

Running Head: MANAGEMENT ACCOUNTING
Task 2
P3
Traditional method
Maintenance Costs 75000
Set up costs 25000
Total manufacturing costs 100000
Direct labor hours
Product x 1000
Product y 300
Total Hours 1300
Total cost 100000
Total cost per hours 76.92308
Bifurcation for
X (1000*76.92) 76923.08
Y(300*76.92) 23076.92
Total cost 100000
ABC Method Cost Key drivers Amount
Set up 25000 4 6250.00
Maintenance costs 75000 11 6818.18
FOR X (2*6250) (3*6818.18) 32954.54
FOR Y (2*6250) (8*6818.18) 67045.44
Total Cost 99999.98
M2
FIRST IN FIRST OUT
Date 60 70 80
3rd 45
5th -25
11th 60
14th -20 -5
21st 55
22nd -25

Running Head: MANAGEMENT ACCOUNTING
24th -25
0 5 55
Total 350 4400
Ending balance 4750
LAST IN FIRST OUT
Date 60 70 80
3rd 45
5th -25
11th 60
14th -25
21st 55
22nd -25
24th -10 -15
20 0 40
Total 1200 0 3200
Ending balance 4400
D2
Alpha Consultant Group
Income Statement
for the year ending 31st December 2018
Particulars Amount Amount
Sales £ 4,600,000.00
Cost of goods sold £ 2,500,000.00
£ 2,100,000.00
Less: Expenses
Salaries expense £ 800,000.00
Rent £ 190,000.00
Advertising £ 30,000.00
Insurance £ 25,000.00 £ 1,045,000.00
Earnings before taxes £ 1,055,000.00
Less: taxes @ 20% £ 211,000.00
Earnings after taxes £ 844,000.00

Running Head: MANAGEMENT ACCOUNTING
Task 4
P4
Budgetary control refers to the process of projecting the transactions which helps in comparing
the actual performance in order to find out the variances. Associations utilize different arranging
devices for budgetary control.
It also helps in setting the objectives, targets and strategies. It also helps in improving the overall
performance of the assets. It also helps in building a better correspondence, and diminishes the
cost along the lines (Choge, 2016).
Disadvantages
From the above scenario the pros have been listed however, there are cons as well. At times it
becomes difficult to determine the exact level of spending. Future is dubious just as the
budgetary control and the cost of utilizing these techniques may not add future value to it.
M3
1) Cash forecasting device: Cash is based on the basic fact that it is treated as one of the
creative elements. This is on the grounds that, without the perfect measure of money, activities
and operations of the business can't be preceded for long in this manner the business will neglect
to meet its objective. Therefore, the viability of income displaying is necessary for the investros
and the shareholders (Mack and Goretzki, 2017).
2) Zero based spending plans: In zero based planning apparatus, each capacity of the
association is broke down for its expense and needs. From that point onward, spending plan is
readied dependent on these necessities and costs in any case the degree of planning.

Running Head: MANAGEMENT ACCOUNTING
3) Scenario and Contingency Based Planning: A business firm is frequently confronted with
different questionable situations. These situations or occasions may be impeding for the
association. Therefore, the administration ought to consistently be set up to take right activities
with respect to these destructive occasions. Thus, the device called situation and possibility
based arranging developed (Ionescu, 2017).
4) Rolling figures: In moving gauge instrument, the bookkeeping data is by and large
ceaselessly refreshed as the years cruise by. The real execution is recorded when happens. At
that point with the assistance of this apparatus, the executives can characterize a pattern inside
their association and estimate what will be the sensible choice to take in not so distant future. It
diminishes a lot of vulnerability while planning spending plans.
D3
In this day and age, the management accounting is urgent for all the business firms. Business
firm consistently attempt to search for devices and frameworks that would improve its money
related wellbeing. The management accounting is utilized to record and report different money
related data to the administration. It encourages the administration to manage certain monetary
issues and increment the administration effectiveness. Also, currently perceive how powerful the
devices of management accounting are managing the money related issue (Balcan, Sandholm
and Vitercik, 2018).
Forecasting Cash Flow: With the assistance of management accounting the executives, an
association is empowered with the gauging of future money needs. The administration can
without much of a stretch get an outline of future money inflow and outpouring.

Running Head: MANAGEMENT ACCOUNTING
Cost Driver Determination: Management accounting additionally assists with discovering the
primary cost drivers of the creation. The elements of the cost can be restricted for increasingly
gainful business activities. Also, another reality to be noticed that, an association is probably
going to be all the more monetarily stable if the expenses are productively controlled (Dumitru,
2019).
Performance Evaluation: Management accounting is additionally utilized for inward
assessment of the association. An association is regarded to be monetarily solid when its inward
exhibition is above standard. With the help of book-keeping the association can monitor the
inward performance and take the decision accordingly (Villalobos, et al 2016).
Financial Return: One of the fundamental elements of accounting is to forecast different
components on which the firm is completely relying for future feasibly. With the assistance of
forecasting, the association settles on various money related choice as well. With the assistance
of right estimating, the administration will choose whether it will be useful or not.
Identifying Financial Deficiency: Management accounting chips away on the basis of the action
and also by working in such a manner, it can without much of a stretch recognize areas where the
money is mostly required, and at the same time the administrators can also make the decisions
wisely (Wardekker, et al 2019).

Running Head: MANAGEMENT ACCOUNTING
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Gao, X., He, S. and Zhang, Y., 2017. Labelled tree graphs, Feynman diagrams and disk
integrals. Journal of High Energy Physics, 2017(11), p.144.

Running Head: MANAGEMENT ACCOUNTING
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Running Head: MANAGEMENT ACCOUNTING
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