HNBS 305 Assignment 1: Management Accounting Report for UCK Furniture

This report provides a comprehensive analysis of management accounting practices within UCK Furniture. It begins with an introduction to management accounting, emphasizing its role in financial planning and strategy development. The report then delves into various accounting systems, including cost accounting, inventory management, job costing, and price optimization, highlighting their significance for effective financial control. Methods used for management accounting, such as performance and budget reports, are discussed, along with their benefits in minimizing errors, maximizing profit, and supporting decision-making. The report also explores the benefits of a management accounting system, such as job costing, cost improvement, and inventory management. Finally, it examines the integration of the management accounting system within organizational processes, emphasizing the importance of budgeting, accounts receivable, job cost, performance, and inventory reports. The report concludes by summarizing the key findings and emphasizing the critical role of effective management accounting in organizational success.

Management
accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
PROJECT 1......................................................................................................................................1
1.1 Management accounting and types of accounting system....................................................1
1.2 Methods used for management accounting...........................................................................3
1.3 Benefits of management accounting system and their application.......................................4
1.4 Integration of management accounting system within organisational process.....................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Management accounting is all about designing an effective plan, policies and strategies
for overcoming various financial issues which may have a major impact on company
performance as well as profit. However, it is essential to consider necessary facts or figures such
as; financial statements, balance sheet, profit or loss account and so on. Therefore, assignment is
going to highlight benefits of making appropriate scheme which is adopted by accounting
department of UCK furniture. Along with this, several types of accounting system and reporting
tools are also outlining in this project for overcoming various barriers identified at workplace.
Lastly, this project is all about techniques of financial section for analysing accurate estimation
of organizational funds (Zaleha Abdul Rasid and et. al., 2011).
PROJECT 1
1.1 Management accounting and types of accounting system
UCK is one of the useful manufacturing organization whose main objective is to design
attractive furniture in order to facilitate consumers for acquiring maximum revenue by satisfying
their needs or demands. However, financial department playing a major role in company success
because planning of organizational funds is very much indispensable at workplace because it aids
in executing several business operations in much better way. Thus, it has been identified that
accounting system of an association is encountering different types of financial issues or barriers
that have a greater impact on a company performance due to inappropriate system. Basically,
number of reasons are determined due to which company is facing various issues such as;
inappropriate system, improper functioning of managers and mismanagement in overall
organization. Accounting system is mainly known for its effective process of monitoring,
examining, assessing as well as overall management of financial information in order to gain
maximum profit by attaining organizational goals. As a consultant of UCK furniture it is
essential to make a proper plan which consist of several schemes for executing number of
transactions in much better way (Nielsen, Mitchell and Nørreklit, 2015).
Apart from this, it has been observed that there is little bit difference between financial
accounting and management accounting which is connected with managers whomsoever are
responsible for making final decisions. On the other hand, financial accounting is all about
offering relevant information to other party those are directly or indirectly interlinked with
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selected firm. Traditionally, one of the major liability of this department is to frame appropriate
process which is useful for entire association because it aids in making decisions at workplace.
Beside this, there are number of accounting systems are identifies such as; valuable objectives,
components, elements or functions. Instead of all this, an organization needs to focus on their
funds management for overcoming barriers related with capital by allocating accurate amount to
specific project or sections of an association. Thus, it has been analysed that overall success of an
organization is fully depend upon accounting department because they are liable for assigning
minimum amount of money to particular department. Therefore, various types of accounting
system are described as follows that must be considered by company while running their business
operations as well as during strategy designing:- Cost accounting system:- According to this factor an association may use this tool while
estimating total costing of their specific goods as well as for analysing the valuation of
stock, profitability assessment and controlling of specific cost. Thus, in this system
managers needs to conduct appropriate allocation with the use of either activity based
costing or traditional method. In fact, estimation of actual price is very much
indispensable because it aids managers to handled things in most appropriate manner in
order to run business operations of UCK furniture in much better way. Therefore,
managerial team of a company relies on financial information for controlling several
issues (Abdel-Kader, 2011). Inventory management:- As per this element it has been analysed that stock management
is very much essential for controlling extra wastage which might be incurred due to
inappropriate system. Therefore, inventory system is designed for overlooking the
ordering or storage of components that is utilized by entire corporate world in their
manufacturing of goods or services. Basically, this system is seen as cluster of application
of barcode scanners, mobile phones as well as various other software which is used for
controlling extra or unused stocks. However, their main objective is to ensure that
manufacturing team of furniture of an associations must design suitable stock or
estimated amount due to control unused wastage which may occurred while designing of
goods or services. As a result it aids an enterprise to maximize company profit by making
proper planning for inventory management.
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 Job costing system:- In this strategy an association needs to organize an appropriate
system for allocating manufacturing cost to specific goods or services or batch of a
product. Basically, this approach of accounting system is used for allocating sufficient
capital for certain goods or services which is designed by UCK furniture in order to
acquire maximum profit. Additionally, necessary information needs to submit
information related with cost to customers under the specific contract in which price is
refunded (Amidu, Effah and Abor, 2011).
 Price optimisation system:- Estimation of product cost is necessary for determining
appropriate price of a product in order to gain maximum profit. However, according to
this system numerical evaluation or terms are used by corporate company in order to
analyse the total consumer perception on specific materials which is decided by an
association for their furniture designing. Along with this, evaluation of price aids an
enterprise in attaining their company objectives by gaining maximum benefits.
Hence, it has been analysed that company needs to adopt these above accounting types
for running their business operations in much appropriate manner as well as aids in controlling
extra wastage by maximizing the company profit.
1.2 Methods used for management accounting
Managers of an organization always tries to increase their company efficiency by
accomplishing various business operations in much appropriate manner. Thus, in order to attain
their set objectives they need to analyse their financial data and records in much more systematic
manner. Along with this, it is essential to make an appropriate report of financial data or
information which supports company in fulfilling several management requirements. Basically, it
has been retain with the help of financial accounting. Moreover, one of the major reason behind
analysing report is to control or plan in order to make final decision which are mainly based on
various corrective financial statements which consist of profit or loss account, balance sheet and
cash flows statements (Mistry, Sharma and Low, 2014).
Additionally, they also engaged in implementing several types of accounting reports in
order to analyse the company information in much better way. Along with this, company design
several reporting techniques for recording useful accounting information systems in effective
manner for making proper judgement by considering necessary facts or figures. Basically, all
these tools or techniques are very useful for improving the company performance by
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accomplishing business operations in much better manner. However, these reports are designed
by managerial department which consist of budget, trail balance and job cost report and so on.
Apart from this, major reason behind preparing reports is described as follows:-
 In order to minimize the chances of loss, mistakes or errors.
 For maximizing the profit of an enterprise.
 Aids in accomplishing business activities in much better way.
 Helpful during making financial decision.
 Supports managers or employees while allocating funds for specific project or
department.
Hence, various types of information or data are recorded in several types of report for
avoiding state of confusion is describing as follows:- Performance report:- According to this factor an association needs to compare between
actual performance between projected in order to calculate accurate sales or expenses.
However, major point of difference is going to computed for shaping a fresh budgets as
well as include several factors for making effective decision. Basically, performance
records are designed on yearly basis but few companies make it as per monthly or
quarterly. Their main objective is to determine past or present presentation or turnover of
an enterprise (Pimentel and Major, 2010).
 Budget report:- Appropriate estimation of funds are mentioned in this report which aids
in making corrective financial plan by determining the necessary facts or figures such as;
financial statements, balance sheet and so on.
1.3 Benefits of management accounting system and their application
Management accounting has different kind of advantages in business. It is usually based
on different kind of benefits and that create competitive advantages by formulation cost effective
process in organisation easily. Management accounting is basically used to manage cost and
expenses of organisation in appropriate manner. Different advantages of management accounting
for UCK furniture are given below as -
Accounting system Benefits
Job costing method  This is an effective forecasting process that will help UCK
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furniture to analyse types of cost that occur in production
procedure.
 It will aid to keep effectiveness of activity for exact work
procedure.
 It is an helpful procedure that help to provide appropriate
conclusion for work that have been done.
Cost improvement
method
 Through this process organisation can easily introduce
effective product in front of customers with attractive cost.
 This will help to provide effective growth and income easily.
 Through this process finance decision of UKC furniture
manage all accounting procedure in appropriate manner.
Cost accounting
system
 Through this process organisation can easily analyse
developing process for utilising each and every elements with
particular system.
 Through this process organisation can easily build fluctuation
in prices and cost.
Inventory
management system
 This procedure help to make improvement to increase stock
level in firm easily.
 Through this efficiency of production process can be increased
and conserve lots of time easily.
1.4 Integration of management accounting system within organisational process
As per the above report, UKC furniture can easily make a well arranged report that would
determine overall execution of employees performance in organisation. This is the duty of
managers to create uninterrupted assessment about their production stock as well as other feature
that can affecting the productivity and probability of UCK furniture. For this, various tools are
needs to be analyse in appropriate manner as:
Accounting reports and evaluation
Budgeting reports: This is a collection of organisational processes which are related to the
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this company and these kind of things are representing in effective manner. This will easily
represent desired outcomes and process in exact and effective manner.
Accounts receivables ageing report:- Appropriate interpretation in between several activities or
association resulted in designing of effective reports which aids in attaining timely results.
Along with this, it helps in producing on time payment of specific accounts receivables as well
as create an effective gathering of regulations.
Job cost report:- It aids in reducing the entire price of specific goods or services which are being
accomplished in desired time frame (Bobryshev and et. al., 2015).
Performance report:- According to this element an association can easily make effective plan
for future betterment as well as aids in minimizing extra cost buy increasing the profitability of
an enterprise.
Inventory or production report:- Provides effective management to stock department as well as
manufacturing process by estimating the sufficient funds for them in order to control extra
wastage of a company.
CONCLUSION
From the above report it has been summarised effective management of accounting
system is very much indispensable because success or development of an association is depend
upon appropriate allocation of company funds. Thus, report is based on UCK furniture whose
main motive is to design qualitative products for acquiring maximum revenue. It has been
concluded that management accounting is an important part of every business organization. in
order to get better outcomes in near future they need to use various accounting systems and
reporting those are helpful in attaining its overall objectives. The overall projects is delivering
maximum focus on increase growth and performances in coming time.
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REFERENCES
Books and Journals
Zaleha Abdul Rasid, S and et. al., 2011. Management accounting and risk management in
Malaysian financial institutions: An exploratory study. Managerial Auditing Journal.
26(7). pp.566-585.
Nielsen, L. B., Mitchell, F. and Nørreklit, H., 2015, March. Management accounting and decision
making: Two case studies of outsourcing. In Accounting Forum (Vol. 39, No. 1, pp. 64-
82). Elsevier.
Abdel-Kader, M. G. ed., 2011. Review of management accounting research. Springer.
Amidu, M., Effah, J. and Abor, J., 2011. E-accounting practices among small and medium
enterprises in Ghana. Journal of Management Policy and Practice. 12(4). p.146.
Pimentel, L. and Major, M. J., 2010. Management accounting change: a case study of Balanced
Scorecard implementation in a Portuguese service company. Contabilidade e Gestão:
Portuguese Journal of Accounting and Management. (8). pp.89-109.
Bobryshev, A. N and et. al., 2015. Management accounting in Russia: problems of theoretical
study and practical application in the economic crisis. Journal of Advanced Research in
Law and Economics. 6(3 (13)). p.511.
Mistry, V., Sharma, U. and Low, M., 2014. Management accountants' perception of their role in
accounting for sustainable development: An exploratory study. Pacific Accounting
Review. 26(1/2). pp.112-133.
Pavlatos, O. and Kostakis, H., 2015. Management accounting practices before and during
economic crisis: Evidence from Greece. Advances in accounting. 31(1). pp.150-164.
Sisaye, S. and Birnberg, J. G. eds., 2012. An organizational learning approach to process
innovations: the extent and scope of diffusion and adoption in management accounting
systems. Emerald Group Publishing Limited.
Online
Capital Employed. 2016.[Online]. Available through:
<https://www.readyratios.com/reference/analysis/capital_employed.html>.
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