Management Accounting Report: Cameron Ltd, Semester 1

This report delves into the intricacies of management accounting, focusing on its application within Cameron Ltd. It begins by defining management accounting and its essential requirements, highlighting its role in decision-making, strategic management, and planning. The report then explores various management accounting reports, including job costing and performance reports, evaluating their benefits. A key section involves the application of accounting techniques, specifically marginal and absorption costing, to analyze income statements. Furthermore, the report examines the advantages and disadvantages of planning tools, particularly budgeting, and analyzes their use in forecasting. Finally, it addresses the use of management accounting in responding to financial problems and analyzes financial challenges that can impact organizational success. The report offers a comprehensive overview of management accounting principles and their practical applications.

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Explaining the management accounting and its essential requirement.................................3
P2. Differen6t types of management accounting report..............................................................5
M1. Evaluating the benefits of management accounting system and its applications................6
TASK 2............................................................................................................................................6
P3. Calculating the cost to analyse the income statements..........................................................6
M2. Applying the range of accounting techniques .....................................................................7
TASK 3............................................................................................................................................8
P4. Determining the advantages and disadvantages of planning tools........................................8
M3. Analysing the use of planning tools that used in preparing the forecasting budget...........10
TASK 4..........................................................................................................................................11
P5. Comparing the management accounting system respond to financial problem..................11
M4. Analysing the financial problem that lead to organisation success....................................12
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Management accounting refers to the managing and application of professional skills and
knowledge in the preparation of financing and accounting information through it able to manage
the internal management. This basically helps the manager to help in decision making and allow
to take the proper business operations and organise it in much better manner to achieve the goals
and objectives (Abernethy and Wallis, 2019). In the selected organisation, it is being discussed
about the management accounting and different methods used and evaluating the benefits of
different types of management accounting reports. Applying the range of management
accounting techniques using the marginal and absorption costing principles. Determining the use
of planing tool and its advantages and disadvantages and analysing the different planning tool
that is essential for the forecasting budget of an organisation. Apart from that comparing the use
of management accounting to the respond of financial problems.
TASK 1
P1. Explaining the management accounting and its essential requirement
Management accounting refers to the process of identifying the managerial accounting
and all financial accounts that has main objectives is to give best advise in decision-making
process in the company (Ax and Greve, 2017). Manager able to take the proper management and
strategic decision which are very useful for the company and will improve overall facility
towards the organisation. In the Cameron Ltd., this is used as provision for the manager to take
better and appropriate management decision that will lead to many benefits to the company.
Following are the benefits of management accounting are as follows-
 Helps in identifying the business area- This is useful in identifying the ineffective
business area that causes loss for the company and not performing well then management
accounting helps in finding the those areas. This will help in detect the problem in early
stage and useful in solving the problem art frequent level.
 Strategic management- This tool and techniques useful in focusing some areas that were
need to be improved and require the certain changes and alteration. Through this it could
be achieved easily. In the context of Cameron Ltd, this will be useful in smoothing the
overall structure.

 Planning- Management accounting helps in taking proper planning and facilitates in
ongoing process in the company. In the context of Cameron Ltd, this will help in making
effective planning through analysing the data and accordingly plan the activities for the
organisation.
Management system- These system are very essential for the development for the internal
process of the company so that it can perform well in effective manner and will be useful in
enhancing the productivity (Burritt and et.al., 2019). In the context of Cameron Ltd., these
management accounting system will be very useful in performing the effectiveness. Following
are as follows-
 Cost accounting system- This concern will managing and controlling all kinds of cost
that involve in many related activities and functions of the organisation. It basically aims
that tracking all cost that include in raw material and production stage that used to
transform in finished goods. In the context of Cameron Ltd., the essential requirement of
this system is that it assist in regulating and controlling all kinds of cost in proper manner
that will help in minimizing the cost and maximization of profit.
 Inventory-management system- Thus concern with monitoring and maintaining the
purchase from the supplier as well as customer (Cooper, Ezzamel and Qu, 2017). This
system play important role in deciding the availability of finished goods in the warehouse
and ensure this is used at optimum level and does not adding additional cost to the
company. This oversee the end to end production and business management that helps in
demand forecasting to metrics, reports and other system. In the context of Cameron Ltd.,
the essential requirement of this system that it help in fulfilling the demand of the
company and improve the process of tracking the raw material, finished goods for the
manufacturer. This also support and improve the analysis of inventory processing and
procedure that prevail in organisation.
 Price optimisation system- This helps in analysing and focusing the key areas such as
margin of sales and regulate the conversions that will help in fulfilling the requirement of
the company. As, price is main factor that influence the buyer to buy the decision to
purchase the specific product. This play important role in managing and regulating the
pricing decision to increase the sales and probability. In the context of Cameron Ltd., the
essential requirement is to help the firm to take appropriate decision regarding the pricing

of product that which id profitable and will help in analysing the margin of sales that
leads to growth in the expansion of business (Endenich and Trapp, 2020).
P2. Differen6t types of management accounting report
Reports in the organisation contains essential function that present the financial status of
the company at specific period of time. This is useful in providing the details of business
transaction and operations that uses in compiling the financial information. This is in specific
format that could be deliver orally and it can be in written documents. In the context of Cameron
Ltd., this helps in providing the effective and useful information to the stakeholders and public to
take proper decision regarding investment and other forms. Through this firm able to implement
the effective steps and action to improve the efficiency and effectiveness. Following are the
reports-
 Job costing report- This type of report helps in maintaining and track the cost and
revenue by 'Job' and helps in enabling standardize reporting of the profitability of the job
that has been done (Hiebl and Richter, 2018). This assess all cost that involved in
construction of job in manufacturing of goods done in discrete batches. This used to
record in ledger account throughout the life of batch and then summarize in trial balance.
In the context of Cameron Ltd, this reporting will helps in determining the labour and
material cost of each job in systematic manner. This system ensure that business is
occurring sufficient amount of money and all job cost can be accumulated and this helps
in maintaining in proper manner.
 Performance report- This kind of report is something that is very valuable and effective
report for the company that will help in antialiasing the forecasting revenue, expenses and
profit to assist the top management. This refers to analysing the work performance and
sending to respective stakeholders that involve in reporting performance of the project.
This is part of communication management plan and help in providing the useful
information required by stakeholders. This is clear, concise and accurate form of report
that assist the manager to evaluate the performance of all kinds of activities and functions
that involve in organisation. In the context of Cameron Ltd., this helps in providing the
clear picture of business performance and it include the decoding the current performance
level, setting up the realistic goals. Through that company is able to evaluate the

weaknesses to make necessary improvement in the organisation. This also helps in
analysing the performance of employees in the firm and useful in guiding
M1. Evaluating the benefits of management accounting system and its applications
Management accounting
system
Uses Application
Cost accounting system This helps in determining the
estimated cost that will lead to
proper control over the
expenses so that company able
to achieve the maximum profit
(Honggowati and et.al., 2017).
Cameron Ltd., require this
system that will help in
implementing the activities
which reduces the activities
and functions. This is useful
devise for the company.
Inventory-management
system
This provide control over the
price that used to control the
inventory in the management
to ensure the proper delivery to
the customer.
Cameron Ltd., this system is
useful in oversee the process
of inventory in the
organisation and helps in
regulating the inventory is not
wasting in the warehouse.
Price optimisation system This is useful in managing and
monitoring the process of
pricing and will be useful in
taking effective decision-
making process regarding the
price of the product.
Beans land Ltd, is applying
this system to regulate the
whole process of pricing
strategy as to enhance the
profit in the company. This
could be achieve through
better pricing strategy in the
management.

TASK 2
P3. Calculating the cost to analyse the income statements
Cost- This is the amount that is spend by the company to produce or manufacture any
product and services in order to sell it to customer. This is essential factor that helps in
evaluating the cost of product that is used to charge by the producer and this does not include the
labour or material. In the context of Cameron Ltd., this helps in analysing the effectiveness of the
company and useful in delivering the product and services so that firm can minimize the cost and
maximize the profit (Kostyukova and et.al., 2018).
Marginal costing- This costing techniques refer to the calculating the variable cost that
is charged to units of cost and implies additional cost that involve in producing extra unit of
output that is used in the company' operational activities. In the context of Cameron Ltd., the
valuation and analysing of stock, classification into the fixed and variable cost to improve overall
effectiveness and efficiency in the management of the company.
Absorption costing- This allocate fixed overhead cost to the product whether it is sold or
not in the period of accounting and useful in taking effective decision regarding the cost. This is
different from fixed overhead cost to each other unit and this is also known as the full costing
method. In the context of selected organisation, this ensure accurate accounting for ending
inventory and helps in taking internal pricing decision for the management.
M2. Applying the range of accounting techniques
Absorption costing technique
July August
Variable cost 40000 60000
Fixed production cost 10000 15000
Total cost 50000 75000
per unit cost 25 25
Income statement
Particulars July August
Sales 82500 176000

Less: cost of goods sold 37500 80000
Variable cost 40000 60000
Fixed production cost 10000 15000
Closing stock 12500 7500
Opening stock 0 12500
Gross profit 45000 96000
Add/less: Under/over absorbed fixed cost 5000 0
Less: selling and distribution cost 18000 18000
Net profit 32000 78000
Marginal costing technique
July August
Variable cost 40000 60000
Per unit cost 20 20
Income statement
Particulars July August
Sales 82500 176000
Less: marginal cost of sales 30000 64000
Variable cost 40000 60000
Closing stock 10000 6000
Opening stock 0 10000
Contribution 52500 112000
Less: fixed production cost 15000 15000
Less: selling and distribution cost 18000 18000
Net profit 19500 79000

TASK 3
P4. Determining the advantages and disadvantages of planning tools
Budget is overall estimation of income and expenses that helps in running the
organisation that provide effective way to formulate all task and preparing the budget to help
them in maintaining the effectiveness in the company (Hutahayan, 2020). This is useful tool that
will help in taking the decision regarding the important plans and rules. In the context of
Cameron Ltd, this is useful in understanding the efficiency of the management in executing the
activities and function. Some of the budget is as follows-
 Capital budget- This budget are basically formed to calculate the overall payment that is
opposed to account of revenue. This type of budget is very important to understand the
capital expenditure of the organisation and useful in taking the effective decision making.
In the selected organisation, this helps in analysing the risk to promote the opportunities
to implement in better manner.
Advantages- This type of budget useful in preparing the long term budget that support to attain
the profitability in greater level that gives maximum results to the shareholder. In the context of
Cameron Ltd., this is useful in evaluating the risk that is associated in the opportunities of
investment. This provide assistance that is useful in developing the better knowledge regarding
this (Laela and et.al., 2018).
Disadvantages- This types of decision that is undertaken by the capital budgeting is irreversible
as this produces the much time to formulate this kind budget. In the context of Cameron Ltd.,
this occur the problem for the company and also risky option for the firm in order to achieve the
effectiveness.
Operating budget- This kind of budget were used for dally basis activities and helps in
evaluating the business operations (Mahmoudian and et,al., 2021). This budget states that
accounting period will be useful in estimating the revenue and expenses of the activities and
functions of future period of time. This kind used by the managers regularly to analyse the
expenses and income of the company at daily basis. In the context of Cameron Ltd., this help in
improving the effectiveness and efficiency of the company. This is useful in improving the
overall performance in the firm by giving the best results to the company.
Advantages- This is focuses on the all activities and functions to control and manage the day to
day activities and function to manage the income and expenses of the company. This budget is

useful in selected organisation that helps in managing the selling and transaction activities. This
gives the best result to the company when its able to maintained all expenses an revenue in the
Cameron Ltd.
Disadvantages- This type of tool is quite complex in understanding the effectiveness of
operational activities and function and create the problem to analyse multiple roles. In the
context of Cameron Ltd., this budget is possible in small companies and not suitable in large
organisation as there are number of activities that create confusion among the manager to take
the decision.
Cash budget- This type of budget is display of inflow and outflow of cash in the organisation
and helps in analysis the cash position in the firm. This is useful tool that give effective
information regarding the efficiency of the organisation and will lead to cash liquidity in the
company (Honggowati and et.al., 2017). In the context of Cameron Ltd., this will help in
providing the better way to apply the functions and activities of cash related in the management
of the company.
Advantages- This budget is useful in understanding the budgetary control and that develop the
effectiveness in firm and helps the manager to take informed decisions regarding the Cameron
Ltd.
Disadvantages- This type of budget is not useful in developing the performance of cash position
in the company. This is not giving the satisfactory result to the company. In the context of
Cameron Ltd., this is not feasible in all kind of activities and functions and does not give relevant
information.
Following are the analysing in different planning tools are as follows-
Porters's five forces- This is one of the effective model that used to identify the competitive
analyses of the company (Rikhardsson and Yigitbasioglu, 2018).The five forces are-
 Bargaining power of buyers- In the relation to Cameron Ltd., there is high threat of
bargaining power of customer because there are large number of company in the market.
 Bargaining power of suppliers- There are medium level of power with the supplier as
there is less number of suppliers that could change the prices of raw material.
 Threat of substitute- There are high threat of substitution that might be use by customer
in case of increase the price of customer.

 Threat of new entrants- In the context of Cameron Ltd., there is new entrants in market
that create the challenges for the company.
 Threat of competition- There is high threat of competition that sells the better quality of
products at fewer prices that enhance competitive advantages.
Balance scorecard- This is strategic management performance that used to identify and improve
various internal business functions that resulting to external outcomes. This is also useful in
providing the feedback to the organisation. In the context of Cameron Ltd. this is useful in
measuring the aspect such as learning growth, business processes, customer and finance
Endenich and Trapp, 2020).
M3. Analysing the use of planning tools that used in preparing the forecasting budget
In the selected organisation some tools are very useful that helps in improving the overall
performance of the management. It is studied about the various budgetary tools that were
effective in providing certain benefits to the organisation. Operating budget, cash budget and
capital budget help in fulfilling the objectives and goals of company and useful in developing the
efficiency in the Cameron Ltd. This type of application is useful for the perceptive of manager to
forecast the plans and activities to formulate the effective tools to the management (Burritt and
et.al., 2019).
TASK 4
P5. Comparing the management accounting system respond to financial problem
Financial problems are basically important issues that need to be monitors accordingly to
maintain optimum cash position in the management. This need to be address by the company to
make the effective strategy and plan to solve the financial problem of the management so that
company do not the face any internal process. In the context of Cameron Ltd., this become
difficult for the company to invest in any project and to run the firm. Following are as follows-
 Insufficiency in the funds- This kind of problem refers to the lack of funds available to
the company and that build problem for the organisation in many ways (Sedevich-Fons,
2018). In the context of selected organisation, through this issue the problem decrease the
inefficiency in the management of Cameron Ltd. and unable to make investment in the
profitable projects.

 Excess in expenditure- This is also most common issue that faced by organisation when
there is hike in expenditure and lower in profit. In the context of Cameron Ltd., this
financial problem will reduce the profitability in the company and that leads to many
difficulties in the management (Turner and et.al., 2017).
 KPIs- This defined as the indicator that relates financial and non financial metrics that
focuses on intended results and provide focus for strategic and operational improvement.
In context of Cameron Ltd., this helps in setting the targeting and tracking progress
against the target and leads to achieve the goals and objectives of the company.
 Benchmarking- This concern with thee specific tool that mainly use to identify the
problem in the relation by comparing the organisation. This tool helps in analysing the
problem. In the context of Cameron Ltd., this helps in analysing the problem areas and
ways to improve activities and function.
Basis Tesco Sainsbury
Financial problem This company is facing the
problems related to the excess
in expenditure and facing the
loss regarding the profit
making. This develops the
inefficiency in the company
that leads to inefficiency in the
management.
This organisation is occurring
the problem of inefficiency in
the funds that create the
problem of decreasing in
investing the money in
profitable projects and turns
out be lowering in the
effectiveness in the company.
Identification of problem The need to apply the tool to
identify the efficiency and
effectiveness of the KPI is
better way to cure the issue of
excess in the expenditure in
the company.
To resolve the issue in the
company the techniques that
will help in confronting the
problem is Benchmarking as
this facilitates in reducing the
unnecessary money as
compared to other
organisation.

M4. Analysing the financial problem that lead to organisation success
In the organisation the need to address the issue there are certain methods that will help in
improving the effectiveness and efficiency at greater level (Speckbacher, 2017). Some of the
tools like KPIs, Benchmarking are effective tools that help in avoid the problem and other
circumstances and bring the proper solution to the management. In the selected organisation,
financial problem has reduces the inefficiency and create certain issue in the management and
implementation of these will help the company in increasing the effectiveness of Cameron Ltd.
CONCLUSION
From the above report it is concluded that Management accounting helps the manager to
analyse and interpret the financial problem and to manage the risk for the company. In this report
it is analyses the different types of accounting system such as Inventory-management, Cost
management and Job costing and their uses in the company has been discussed. Analysing the
different cost such as Marginal costing and Absorption costing that used as techniques in the
company. Discussing the certain planning tools that were useful in forecasting the report of the
company some are Operating budget, Cash budget, Capital budget and determining its
advantages and disadvantages also. Apart from determining the some financial problem that used
face by the company and implementing some tools as techniques to resolve the issue and
identification of problems such as Benchmarking and KPIs. s

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