Management Accounting Report: TPG Processing, Financial Analysis

This report provides a comprehensive overview of management accounting, exploring its tools, techniques, and applications within the context of TPG processing. It begins by defining management accounting, differentiating it from financial accounting, and highlighting its crucial roles in organizational development, including cost analysis, budgeting, and financial management. The report then delves into various management accounting tools such as cost accounting systems, inventory management systems, job costing systems, and price optimization systems. Furthermore, it examines different types of management accounting reports, including performance management, inventory management, cost accounting, and accounts receivable reports. The report also discusses marginal costing and absorption costing approaches, providing insights into their methodologies and applications. Overall, the report offers a detailed analysis of management accounting practices, emphasizing their importance in financial decision-making and organizational performance.

Management accounting

INTRODUCTION
MA refers to the chain of various kinds of applications to grab professional knowledge,
tools and techniques and kinds of concepts for prepare the information to get desirable goals and
objectives that helps in formulating plans and policies in context of organisation. In other words,
it helps in devising meaning of information and data related to cost accounting to get useful
knowledge and information to remain always relevant into marketplace. That assignment rely on
TPG processing that a service provider to the general public to provide best services to consumer
base. This assignment rely on kinds of management tools and their techniques with their
relevance in marketplace. With it added methods of management accounting reporting with help
of tools that helps in plan and coordinate each and every activity with their advantages and
disadvantages. It includes systems to resolving financial problems to get right kinds of outputs.
TASK 1
P1
As per view of R.N. Anthony “MA defines about accounting information that proved
useful for management.” Management accounting helps to management in major decision
making by giving them direction to get most important insights and knowledge that are relevant
for organisation.
As per the view of Batty “Management accounting described as an accounting methods,
techniques and systems that associated with knowledge and capabilities that helps to
management to gain maximum profit by minimizing losses. It mixed with the coherent whole,
financial accounting, cost accounting and whole concept of financial accounting” As per the
batty management accounting helps to acknowledge the useful knowledge and capabilities that
gives important insights that ultimately useful for major decision-making in context of
organisation.
Management accounting proved useful by using all kinds of tools and techniques such as
financial accounting, cost accounting and various kinds of statistics to collect and process
information that available before management that helps in taking important kinds of decisions.
Comparison:
Management accounting is differ from the financial accounting that it focuses on building
and preparation of financial statement for an organisation (Banerjee, 2012.. On other hand

accounting system give necessary and relevant information for managers for building policies,
plans and tactics.
Roles of MA:
MA are very much crucial for organisational development and enhancement by some
factors its importance and roles should be understood that are as follows:
Fewer numbers to crunch:
MA enables to understand the technical aspect of knowledge and information. It enables
to giving hidden facts and figures by reading the net income, contingent liability, accounts
receivable and payable (Contrafatto and Burns, 2013. ). Managerial accounting not follow the
standard financial accounting principles to get right kind of outputs. By giving accurate
knowledge and information it helps to managers in taking crucial decisions. In respective
organisation they use management accounting to get gist of financial accounting tools and
techniques so that better results should be accomplished.
Looking to the future:
Management accounting proved beneficial by build projections for the future but their
main focus is on the performance in past year or in quarter. It majorly focus on what is coming in
future so that better plans should be prepared to get right kind of objectives.
Follow the money:
Management accounting helps in looking and observing projections of system. It is the
responsibility of a manager to observe about the performance level to take correct course of
action. In respective organisation they enables to management accounting evaluate the financial
condition of their respective organisation.
Ready when they need it:
In an organisation financial statements should be prepared on the regular basis such as
every month, quarterly or yearly basis. It enables to system can be able to get update about cash
flow position that helps in deal with the critical situations to remain always competitive in
marketplace (DRURY, 2013. ). In respective organisation by financial statements firm measure
or assess their performance on fixed duration.
Margin analysis:
Management accounting proved beneficial in determining the amount of profit or ratio of
cash that created or generated by using specific product or services with a particular state or

region. In context of TPG processing they get important outcomes by analysing the margin in
standards set by them.
Auditing:
Auditing is one of major role of management accounting that are responsible for the
performing audits, reviews and compilations of various kinds of financial statements to achieve
better decision making. It is one of major role of management accounting to get important
insights and knowledge to remain always competitive in marketplace.
Financial management:
This is one of most important kind of role of management accounting in which financial
fuel information and regular and efficient functioning to ensuring that should be provided to
remain always relevant in the marketplace. Role of management accounting is to accumulate
necessary knowledge and information regarding the finance and resources to get desirable
objectives in better manner. In context of TPG processing by using the management accounting
tools and techniques they predict in better manner about future projections.
Cost analysis:
The most important role of management accounting is to analyse the cost associated with
producing the products and services by predicting the existing expenses of an organisation as per
the future activities. In context of TPG processing by using that tool organisation can be evaluate
the incurred cost and various measures associated with it.
Make or buy evaluations:
Management accounting helps in taking the make or buy evaluations, for an organisation
produce a product is one of most expensive possession so it helps to make sure about the chosen
option suits with needs of an organisation. In that regards management accounting helps to
evaluate the best option for them to remain always competitive in marketplace.
Define budgets:
the main role of management accounting is to give important insights to taken budget
related decisions by complying with sales history and marketing database. By analysing the
former activities and defining actions for the future activities they take important decisions.
Controlling:

Controlling is one of major role that played by management accounting by evaluating the
work of all major units of an organisation with conclusions concerned with financial
performance.
Break even analysis:
By calculating the contribution margin with help of management accounting and volume
of unit that shows the break even of an organisation. In respective organisation that It enables to
Management accounting determine the price points.
Cost accounting system:
Cost accounting system that proved helpful by tracking raw material while proceed
towards the production stage and gradually convert into finished goods and services. The two
kinds of cost accounting systems are job order costing and processing costing (Herbert and Seal,
2012.). In respective organisation It enables to firm can be able to determine about the prices of
their products and services. It enables to organisation to track and record each and every activity
in an organisation to forecast demand in future. Cost accounting system is very much important
for organisation to analyse the profitability by individual products, services or by job and by
sales of various departments or operational units. The essential requirements of this system is to
compute the cost of whole process and services and also evaluate the actual profit of firm
through comparing the total gained amount with incurred cost.
Inventory management system:
that kind of management accounting system that obsessed with oversight and
administration of stock of goods and non capitalised possession of an organisation. That system
helps to reach effective rate of ware in a firm to remain always relevant in market. Inventory
management system is very much potential for organisation to track goods and services across
the supply chain to get optimum outputs. With it is essential to optimise the spectrum for order
placements. The crucial needs of this particular system is to keep the accurate records whole
stock levels within respective firm. With the assistance of this they can able to know about the
availability of stock and products effectively and efficiently. As by managing the inventory,
company can meet the consumers requirements, deliver the quality product on time as well as
also reduce the various costs related with holding stocks.
Job costing system:

Job costing method enables to give price or commercial enterprise cost for an each and
every individual product simultaneously track their expenses (Hilton and Platt, 2013). With the
help of it organisation can determine the price of their products and services to reach at large no.
of consumer base. In context of TPG processing by fixing some factors that directly related with
price that ultimately proved beneficial for them to determine the prices. It is require to track the
cost while creating or developing the new product or services in the marketplace. It is also useful
to track or measure associated cost with production system, custom, bespoke and many more.
Price optimising system:
That helps to regulate cost of various kinds of sources that organisation have. It enables
to determining the pricing of multiple products at at time. In respective organisation with using
diverse factors for fulfilling organisational goals and objectives. The main requirements of that
system is to find out the pricing sweet spot that easily consumers willing to pay. In that aspect it
is very much potential to use that system to get desirable goals and objectives. This type of
management accounting system is required through respective company for setting the prices of
their services at advantageous level. Moreover, through this they can able to ascertain the prices
of their various process and services that aids them to grab the attention of more clients.
P2
MAR is very much decisive for an organisation deal in systematic way about
performance of firm to lead in market. There are diverse types of costing so that sustainability
should be maintained.
There are four kinds of management accounting reports that are as follows:
Performance management report:
The main purpose of that reports to review the performance of the organisation as well as
a whole of a employee. In which departmental vies performance reports should be build that
helps to eliminate the gaps in performance.
Contents: the major content of that report is to evaluate the performance of an each and every
individual on the kinds of duration such as on monthly basis, quarterly and yearly basis.

Inventory management report:

The main purpose of inventory management report is to track the stock until it
reaches to the destination so that organisation can achieve one of best results. The content
of that report is incoming and outgoing of the inventory and gaps in level of stock so that
accurate results should be accomplished.
Cost accounting report:
cost accounting reporting is one of most important for an organisation and main purpose
is to capture the cost of company to produce products by accessing their input cost at each step of
production. The main content of that report is fixed cost,variable costs and comparison in actual
results with desired outcomes.

Account receivable report:
The main purpose of that report is to firstly list out all kinds of unpaid voices to
determine the overdue and unpaid invoices to recover in proper manner. The main content of that
report is overdue and unpaid invoices and unused credit memos at various date ranges.
Marginal costing approach:

MC that is an important cost accounting techniques in which marginal cost with variable
cost should be charged as per the per unit cost. On other hand fixed cost completely written off
against the contribution. It is additional price that involved by manufacture a basic units to get
desirable objectives ( Kaplan and Atkinson, 2015). In marginal costing various kinds of cost
consist in it that are direct material cost, direct labour cost, direct expenses with variable
overheads to get right kind of outputs in better way. In respective firm by marginal costing
should be classify various factors of cost so that potential results should be accomplished to
remain always competitive in marketplace.
Absorption costing account:
Absorption costing defines about the all of the manufacturing cost that have to be
assigned to produce units of production. On other words cost related with finished goods and
services includes the direct cost that are direct material, direct labour cost and variable
manufacturing overhead with fixed manufacturing overhead. It proved beneficial for
organisations for external financial reporting and income tax reporting to get desirable outcomes
to attain fruitful outcomes (Kotas, 2014.). In TPG processing by using absorption costing firm
by calculate and evaluate the various kinds of cost and overheads that associated while
manufacturing the products and services in better way.
There are some crucial contribution of both kinds of cost that are consisted within the
organisation to remain always competitive in marketplace.
Difference in Absorption and marginal costing:
Absorption costing Marginal costing
AC related with the sum of all kinds of cost in
a cost centre for determine the total cost of
human action.
On other hand marginal costing helps in taking
crucial decisions for calculating cost related
with the product for producing products and
services known as marginal costing.
In absorption cost profitability should be
measured in form of profit volume ratio.
In marginal cost due to including fixed cost
their profitability directly get affected.
So it has been concluded that costing are very much important for an organisation to deal in
effective manner at time of manufacturing a product and services in proper way.

TASK 3
P4
Designing tools are very important instruments that helps an structure to take action
related with implementation and taking initiatives, to build programs or for invention (Lukka
and Vinnari, 2014. ). it enables to planning tools that helps in get detailed description of their
plan and policies and their way to develop in proper manner. There are some important kinds of
planning tools are here:
Ratio analysis:
RA is kind of numerical acting for gaining knowledge and information about the liquidity
position, their operational efficiency by comparing available knowledge and information that
contained in financial statements. In respective firm by using ratio analysis they compare and
contrast important information and that helps in taking important decision-making for them.
Advantages:
The main advantage of ratio analysis that it helps to validate information or disprove the
decisions related with financing, investment and operations of an organisation (Otley and
Emmanuel, 2013.). With it financial statements should be in comparative figures that ultimately
helps to firm by compare with evaluate situation of a firm.
It also helps in understand the complex statements and data into simple ratios for gaining
important knowledge and information.
Disadvantages:
There are some limitations or disadvantages of that planning tool that are ratio analysis
tool ignore the changes that occurs due to the inflation. Various kinds of cost should be evaluated
after observing the historical cost. So they overlook changes in level of price in between the time
period.
Budgets and budgeting:
Budget and budgeting is an formalised and comprehensive plan that enables to predict the
respective expenses and earnings of a firm for a specific time duration. On other hand budgeting
is an overall process to prepare the budget (Otley, 2016). In respective firm they use both budget
and budgeting to get important results by accumulating information about income and
expenditure.
Advantages:

Budgeting helps in enhance the probability to achieve firms aims and missions with
appropriate way because it plan and coordinate all attribute in advance. It also show the
strengths and weakness of an organisation on which they have to pay attention. Budgeting
proved beneficial for organisation to create the best spending plan for an organisation by
ensuring that organisation have enough money to implement the necessary things and attributes
in positive manner. In context of TPG processing prepare budgets by proper examination of the
income and expenditure of the various departments to report to the management.
Disadvantages:
While building budget to remain enough competitive as per the pre planned budget
employees get demotivated to fulfil them in positive way. With always planning seen as reluctant
work and consider at lower priority.
Variance analysis:
Variance analysis is quantitative measurement and investigation to determine the
difference in actual and planned behaviour in an organisation. It helps to control each and every
activity in an organisation (Renz and Herman, 2016. ). In context of TPG processing by using it
organisation can coordinate potential fields that are potential for them.
Advantages
It helps in analyse the variation in income and expenditures of current year to determine
the budgeted values. It is useful to compare the standards with the actual results and the
difference known as variance. It is calculated with help of both the price and quantity of
materials and labour to get optimum kinds of outputs. In context of TPG processing by using that
system organisation can evaluate their estimated objectives with the desirable outputs so that
differences should be eliminated in positive manner.
Disadvantages:
Variance analysis basically the comparison in actual results by setting arbitrary standards
that sometimes hinders due to political bargaining.
Cash budgeting:
Cash budgeting is predicting the flows of income and expenditure in a business
organization over a time scale. In respective firm by using cash budgeting they plan all
deliverable in coordinated manner.
Advantages:

Cash budget assist in plan and coordinate by effective utilisation of cash in an
organisation. Cash budget that reflect the liquidity that shows the changes in the opening and
closing debtor balances and inform about the inflows and outflows of the cash by accumulate
necessary knowledge and information. In context of TPG processing by cash budgeting they
evaluate the liquidity in their business to get important insights.
Disadvantages:
The main disadvantages that it sometimes limits the spending power of an organisation
that restrict advantages of them.
TASK 4
P5
History of Management accounting: Management accounting have four stages for their
evolution that are:
Cost determination:
The first stage before the time 1950, that majorly focus on budgeting and cost controlling
to get desirable objectives.
Generating information:
The second stage begins from 1950 to 1965 that helps in decision making and
responsibility to emphasis for information in plan and control.
Cost reduction:
third stage from 1965 to 1985 that helps in analysis and technology at time of production
to eliminate excessive use of various resources.
Value creation:
The last stage start in 1985 and ended in 1995 that focus on creating value with
improving the efficiency level by customers and shareholders (Soin and Collier, 2013).
Importance of MA system to meet organisational objectives.
Tools to detect difficulty:
In an organisation various kinds of financial problems arise such as high cost, legal action
for recovering debt and spending less money on the necessary fields with many more
(Schaltegger and Burritt, 2017. ). In that context some tools and techniques proved beneficial to
resolve problems

Balance score card:
Balance score card which is an strategic performance measurement tool helps in translate
organisational goals and mission to put into actual results.
Key performance indicator:
KPI is an kind of performance management tool to measure and evaluate the performance
and determine the success factor of an organisation in which it deals or engage (Ward, 2012. ).
In respective firm by using KPI they set the standards to get right kind of outputs. In which high
level of KPI shows the overall performance of the business and on other hand low level of KPI
shows the processes of the various departments that includes the sales, marketing and designing
department that collaboratively give their services to get desirable outcomes in positive manner.
The intelligence value of set of measurements that helps to greatly improved at the time
organisation understands the value of various metrics and different measures contributes towards
working of an organisation. Key performance indicator should categorized into various types that
are inputs, process, outputs, outcomes and project that helps to deliver right kind of knowledge
and information to the ultimate consumers to remain always competitive in the marketplace.
Balance score card:
Balance score card is a kind of performance metric that is useful for strategic
management to evaluate the internal functions of an business with their external resulting
outcomes to achieve desirable outcomes (Contrafatto and Burns, 2013. ).. It helps to measure
with to evaluate the major feedback of an organisation so that important modifications should be
incurred. In context of TPG processing by using that tool organisation can be evaluate their
performance. The main purpose behind the balance score card that it proved useful to reinforce
good behaviour in an organisation by separating the four major areas that are needed to analysed.
The major areas are learning and growth, process of business, customers and finance. It helps to
attain objectives, measure the value and helps to take initiatives that are primary function of a
business to get competitiveness. It provides information regarding company as an whole while
viewing objectives of an organisation.
Benchmarking:
Benchmarking is an chain of activities to measure or evaluate the performance of an
organisation regarding their products, services or various chain of activities by comparing with
the another business (Soin and Collier, 2013). . In context of TPG processing with help of

benchmarking organisation can be evaluate in better manner their internal opportunities to bring
improvement.
Variance analysis:
Variance analysis is the numerical tool to analyse divergence in present with future
behaviour of an individual to get right kind of outputs. In respective firm by examining their
gaps in set standards.
Adaptation of MA system:
Management accounting system proved beneficial to resolve various kinds of financial
problems that faced by TPG processing that are not enough money to overcome for required
spending. In that context price optimisation system proved beneficial for them to eliminate the
extra cost and charges that levied on their products and services (Wickramasinghe and
Alawattage, 2012). that helps to firm remain always competitive in marketplace.
Sainsbury adopted management accounting system by determining the income and
expenditure of the all departments in their organisation and then find out the gaps in their process
of producing the products and services in proper manner. On other hand IKEA use the
management accounting system by accumulating all necessary knowledge and information that
are very much important for an organisation to record the financial data and statistics to get
important kinds of results in their organisation. They operating the cash flows and high capital
expenditures that are attributed towards kitchen maintenance and vertical integration efforts. By
repurchasing their shares and by paying dividends to enhance the returns to investors to remain
always competitiveness in market. So they are very much careful in delivering the right kind of
value to enhance the ratio of dividends to stable in the marketplace.
With in Starbucks they use various methods and tactics to get accord with the changes that
occurs during in a specified time period. They use KPI to set standards to get potential kind of
outputs to get sustainability in marketplace. So it is very much potential for an organisation to
one of best practices to account financial knowledge and information.
Sainsbury Thirdway
Every organisation faces some kind of
financial problems. In context of sainsbury that
faced problem of high cost by using the Key
On other hand Thirdway use to resolve the
same financial problem by using the balance
score card that are very much important to

performance indicator that proved useful to set
standards in an organisation.
remain stable in an organisation.
CONCLUSION
In that assignment it concluded that MA with its various tools and techniques helpful in
resolving various kinds of concerns to get important knowledge and information from financial
statements. By using many equipments organisation can be able to get potential outcomes by set
some standards that are determined by them previously. In order to some organisation while
facing various kinds of financial problems they have to by using varios factors.

REFERENCES
Books and journals:
Banerjee, B., 2012. Financial policy and management accounting. PHI Learning Pvt. Ltd..
Contrafatto, M. and Burns, J., 2013. Social and environmental accounting, organisational change
and management accounting: A processual view. Management Accounting Research.
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DRURY, C.M., 2013. Management and cost accounting. Springer.
Herbert, I.P. and Seal, W.B., 2012. Shared services as a new organisational form: Some
implications for management accounting. The British Accounting Review. 44(2).
pp.83-97.
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Kotas, R., 2014. Management accounting for hotels and restaurants. Routledge.
Lukka, K. and Vinnari, E., 2014. Domain theory and method theory in management accounting
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Otley, D. and Emmanuel, K.M.C., 2013. Readings in accounting for management control.
Springer.
Otley, D., 2016. The contingency theory of management accounting and control: 1980–
2014. Management accounting research. 31. pp.45-62.
Renz, D.O. and Herman, R.D. eds., 2016. The Jossey-Bass handbook of nonprofit leadership and
management. John Wiley & Sons.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge.
Soin, K. and Collier, P., 2013. Risk and risk management in management accounting and control.
Ward, K., 2012. Strategic management accounting. Routledge.
Wickramasinghe, D. and Alawattage, C., 2012. Management accounting change: approaches
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