Detailed Report on Management Accounting System for Brooklands Hotel

This report provides a comprehensive analysis of management accounting principles and their application to Brooklands Hotel. It begins by outlining the essential requirements of a management accounting system, including job costing, price optimization, and inventory management. The report then explores various management accounting reporting methods such as budget reports, job cost reports, and inventory and manufacturing reports. Furthermore, it delves into cost accounting methods, explaining absorption costing and marginal costing, along with their implications for income statements. The report also covers planning tools for budgetary control, including their advantages and disadvantages, and discusses the role of managerial accounting in addressing financial problems. The analysis includes detailed explanations, examples, and comparisons to provide a clear understanding of the concepts. The report aims to provide insights into how Brooklands Hotel can enhance its operations and decision-making processes through effective management accounting practices.

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Management accounting system and provide essential requirement of various management
accounting system.......................................................................................................................1
P2 Explain various methods for management accounting reporting..........................................3
TASK 2............................................................................................................................................5
P3 Explain cost with suitable method with income statement and major difference between
marginal costing and absorption costing.....................................................................................5
TASK 3............................................................................................................................................8
P4 Explain various kinds of planning tool for budgetary control with advantages and
disadvantages..............................................................................................................................8
P5 Use of managerial accounting system in order to respond various financial problems and
issues.........................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting is a process through which an association become able to take
appropriate decision for development of business (Agrawal and Cooper, 2017). It is one of a
short term financial analysis of business through which an organisation become able to take
appropriate decision won deviations which arise in an association. It is one of a major aspect
which represent about internal stakeholders which enables in gain better suited outcome. This
project is based on Brooklands Hotel whom are one of a greatest service provider in United
Kingdom. Thus, they want to implement a management accounting system into a business so that
chances of better and effective operations get enhance. For this purpose, various management
accounting system get demonstrate by business so that it support in better working (Bennett and
James, 2017). Along with this, various management accounting techniques will lead to manage
operations and remove differences. Moreover, planning tools play an effective role in
management accounting system which need to understand by managers.
TASK 1
P1 Management accounting system and provide essential requirement of various management
accounting system
From: Management Accounting Officer
To: General Manager of Brooklands Hotel
Subject: Report on management accounting system essential requirement into business
Management is a basic concept of every business which need to understand by senior authority
properly so that suitable and appropriate strategies lead to get frame. It is important to maintain
appropriate records of each and every concern of business which enables in taking better and
long term decision of business which reflect positive outcome. In case if any financial deviation
arise, business managers need to understand them properly and take suitable judgement earlier
which support in take beneficial outcome. Brooklands Hotel are one of a small hospitality
association in London where they need to implement management accounting system into
business for taking better and support decision. This process will lead to support business in
order to improve efficiency of organisation as well as remove all short comings as well. A
major motive or benefit which reflect by MAS to Brooklands Hotel is that operations become
more effective and efficient in nature. Although, with this report, essential requirement and
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benefits which provide by managerial system of accounting get reflected in a suitable frame so
that chances of better and effective working become possible to deal with all short comings and
deviations.
A major concern which Brooklands Hotel lead to gain by applying this methodology
into business is that profitability and productivity level get enhance which is a overall matter of
fact. Hence, with in next few years, this process support in open the doors to deal at vast level
and gain competitive advantage by using management accounting as a core competency.
According to Institute of Management Accounting “Management accounting is a profession
that involves partnering in management decision making, devising planning and performance
management systems, and providing expertise in financial reporting and control to assist
management in the formulation and implementation of an organization's strategy”. Thus, this
consent lead to get fulfil with use of appropriate management accounting system into a business
and its concern operation so that chances of better and effective working get enhance. There are
various kinds of management accounting system get evaluated which need to understand by
managers of Brooklands so that better and effective working frame could be maintain as well as
support in enhance productivity and profitability.
Job costing method: This system and approach stands of job cost which constitute at such
moment when an organisation dealing with more than one product at a time. The process of job
costing is high as more than one good is manufacturing thus all consent need appropriate
supervisor to perform and work. In every hotel there are more number of staff required for each
and every working like food, housekeeping etc. Brooklands Hotel have wide variety of services
in which they not only providing quality services of rest but also provide best quality food with
their restaurant. Although, they have to determine this method of management accounting
system by keeping in view of each and every factor properly and effectively.
Price optimising system: This process signifies about pricing of a company when business
wants to offer different products and services at variety of rates by passing them through a
channel. Although, this method or system is helpful for a business in order to evaluate best price
of a product and services in order to met with objectives and provide it to their target customers.
By applying this technique into business by managers, it become supportive in nature to attract
wide range of users. It is a short term process and consider as one of an essential management
accounting system which facilitate effective and appropriate working. Brooklands can apply
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this tool into their working just for evaluation of best price against their services so that all their
frame objectives and aims get accomplish.
Inventory management system: One of an essential factor which reflect about success and
decline in growth is inventory or stock of a company. If a business organisation do not have
appropriate stock and they continuously taking orders then chances of decline of an association
get rises. Inventory need to get manage properly in which many and new innovative methods
could be implement. Inventory management system is one of a beneficial process for
Brooklands Hotel so that organisation become able to facilitate effective and appropriate growth
for further development and growth. With a keen focus on their quantity of rooms they lead to
make their guest more satisfy in nature. This section also have short term working because a
daily and regular check up of rooms is must.
Thank You
XYZ
P2 Explain various methods for management accounting reporting
From: Management Accounting Officer
To: General Manager of Unicorn Grocery
Subject: Various methods use of management accounting reporting
Managerial accounting is consider as essential method which support business and organisation
to take appropriate decision by analysing all short term deviations. Along with the system, there
are several reporting approaches also get evaluated which facilitate effective and appropriate
working. Managers of a company need to prepare reports on regular or on short term basis so
that management become able to accomplish all goals and objectives properly. These reports
are helpful to accomplish all aims and objectives properly and effectively for better and
appropriate outcome. Various managerial accounting reporting system in context for
Brooklands Hotel stated as follow:
 Budget report
 Inventory and manufacturing report
 Job order cost report
A business report is helpful in order to analyse and understand each and every single kind of
deviation properly and effectively so that better and appropriate working get promoted. Fact
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basis decision are more beneficial then any other kind of judgement. Brooklands managers need
to prepare reports on regular basis like budget records, inventory records etc. All of them are
helpful for management in order to accomplish all aims and targets properly by removing
deviation and differences effectively.
Management need to understand all kinds of reporting system in an appropriate and suitable
frame so that chances of appropriate working become possible as well as business gain all
suitable positive responses. Hence, various managerial accounting reports in context of
Brooklands Hotel stated as follow: Budget report: One of a major aspect for business is provided budget. Budget is a major
thing which support in order to accomplish all goals and targets properly as well as
maximise effective working. It comprises and provide each and every investment with
expenditure which incur on a project. Although, managers need to evaluate such report
properly by regular inspection in which day to day expenses need to get manage
effectively. Hence, chances of better and suitable gains become possible through
appropriate budget report and its execution. Brooklands hotel have to prepare an
appropriate budget report by linking it with management accounting. This will support
and contribute in better and effective decision making so that chances of positive
responses become possible. Job cost report: Employment productivity investigation is a basic instrument for a
business which encourage the development and improvement. Before taking any
valuable choice administration need to decide the reasonableness and practicality of
venture and afterwards take a few activities for that. Thus, specialist will end up plainly
ready to centre around such territories which are exceptionally productive in nature.
Brooklands Hotel have to evaluate all aspects properly and choose such consent in an
appropriate frame which is highly profitable in nature so that its execution become
possible and appropriate in frame for better accomplishment of targets.
 Inventory and manufacturing report: Another major reporting system which need a
keen and appropriate focus on working is inventory and manufacturing report. Business
have to prepare and frame suitable list of each and every component and such check list
need to get evaluated on regular basis. Manufacturing report state about quantity which
need to get produce in future concern so that it remove chances of wastage as well as
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optimum utilisation of resources lead to take place. Inventory and manufacturing report
regular inspection lead to contribute in more success and sustainability which lead to
evaluate and enhance chances of success and better results. Brooklands Hotel have need
to inspect their records properly and allot rooms as per that. This inventory and
manufacturing report support in accomplish targets properly by fulfil all requirement of
their guest.
Brooklands Hotel have to understand all these facts and factors properly as well as benefits of
these reporting system. Every reporting system of management accounting contribute most in
their overall growth and development so that concern chances of appropriate gain become
possible in frame. Although, it is essential to implement such report system accurately for
managing growth and development. Like with support of inventory and manufacturing report,
a proper check list could manage in which all essential of such reporting system could be
included. Along with this, it support in utilisation of all kinds of resources properly and
effectively so that better and highly suitable gains could be promoted.
Thank You
XYZ
TASK 2
P3 Explain cost with suitable method with income statement and major difference between
marginal costing and absorption costing
Every work require an appropriate plan which need to consider by managers of a
company so that better and effective working get promoted (Cooper, Ezzamel and Qu, 2017).
Thus, with every project, there will be some cost get associated with it which need to determine
by managers properly for better and effective gain. In such aspect, several cost get determine for
managerial accounting process which: Absorption costing: This method signifies when all manufacturing cost get absorbed by
the unit of production (Eldenburg and et. al., 2016). It also signifies as full costing or full
absorption technique in which all kind of cost get included in production of goods and
services. It also divided the sharing overheads between a number of different products
and services on a fair and appropriate basis. It have a definite procedure which includes
about allocation and apportionment with absorption. In such consideration all kind of cost
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get included whether it is fixed or variable in nature. Thus, on the basis of provided
information regarding Brooklands Hotel, absorption costing determination stated as
follow so that better decision making could be enhance and become possible in frame as
well:
Income statement for absorption costing method:
Selling Price £35
Unit costs
Direct Labour £5
Direct material £6
Variable sales overhead £1
Variable Production overhead £2
Production budgeted for the period is 600
units
Administration Cost: In this budgeted cost is £800 and Actual cost is £700
Production overhead: In this budgeted cost is £1,800 and Actual cost is £2,000
Selling cost: In this budgeted cost is £400 and Actual cost is £600
Income statement as per absorption costing:
Income statements
Particulars Amount
Sales 35*500 17500
Less:
Production cost 6+5+2 - 7800
Closing stock: 100*13 - 1300 -6500
Gross profit 11000
Less:
Variable sales overhead 500*1
500
Fixed overhead -
1800
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Selling and administrative cost expenses (800+400) -
1200 -3500
Total Profit / Loss 7500
Income statement on the basis of absorption costing signifies that net profit of a firm will
become 9600 if all associated cost get included into it. The sales volume is 21000 out of which
cost of production get deducted. On the basis of provided information, if management charged
and include all price of their production or manufacturing in consent, then they become able to
generate more and more revenue. But with this aspect chances of customer dissatisfaction get
rises just because all kind of cost which associated with production included in project. Marginal Costing: It signifies about variation and variances which arise into a business.
Marginal costing define all major differences which consider in a business at the time of
production (FARAJZA, DEHHEMMATI and SANAEE, 2016). This costing charges
only direct costing at the time of production not overall aspects which signifies and
enhance chances of risk and loss (Hopper and Bui, 2016). If a inventory value is lower in
nature the profit margin also get reduces. Hence, it is important for Brooklands Hotel to
evaluate marginal costing properly in order to gain better and suitable outcome. Below is
a income statement which signifies about marginal costing process so that profitability of
business get evaluated in an appropriate and suitable frame:
Income statement as per marginal costing:
Income statements
Particulars Amount
Sales 35*500 17500
Less:
Production cost 6+5+2+3 = 16*500
8000 8000
Contribution 9500
Less:
Variable sales overhead 500*1
Selling and administrative cost expenses (800+400) = 1200 -1700
Total Profit / Loss 7800
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On the basis of this define income statement it get signifies that marginal costing is
another major tool to determine the profit and loss of Brooklands Hotel. In such aspect, sale is
similar to business which signifies 21000 amount but with deduction of all associated values and
cost, marginal costing profit get evaluated which is 9300. Thus, business have to evaluate this
cost properly and effectively so that better and appropriate judgement get articulated properly.
Marginal and absorption costing both are differ from each other and it is important for
business managers to understand them properly. Brooklands managers have to evaluate all major
differentiation which stated as follow:
Absorption costing Marginal costing
It constitutes about all cost of production as a
single cost.
This process only charges about direct cost of
production in manufacturing context but not
whole cost into it.
Product cost is usually high and more as
compared to cost calculated under variable
costing.
In this aspect, cost of manufacturing is lower
than the cost calculated under absorption
costing.
Valuation of closing stock is higher in
absorption costing technique.
Value of inventory is lower than the absorption
costing methodology.
Absorption costing is mainly prepared for
external reporting so that customers lead to
carried down better decision.
Marginal costing generally prepared for
internal reporting in which employees and
other participants lead to carried down
appropriate judgement.
TASK 3
P4 Explain various kinds of planning tool for budgetary control with advantages and
disadvantages
Budgetary control is a kind of management control system which need to follow by a n
organisation properly in which actual and spending income get compared with planned income
and spending so that plans get followed up in an appropriate frame and if any kind of
modifications required they need to implement in a suitable frame (Maas, Schaltegger and
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Crutzen, 2016). Budgetary control is an essential and important concern so that profit could be
enhance and manage in a suitable and adequate manner (Messner, 2016). Brooklands Hotel have
to implement budgetary control in their business and process so that better and appropriate
results could be enhance. Thus, every step and process have some definite advantages as well as
limitations which need to understand by business managers properly and effectively. Following
are the advantages and disadvantages which need to understand by Brooklands manager for
implement MAS into operations stated as follow:
Advantages of budgetary control Drawbacks of budgetary control
One of a major support which business could
be gain through budgetary control is all about
accomplishment of targets become possible.
Brooklands become able to achieve all their
targets in an appropriate and suitable frame
through applying this technique.
One of a major limitation for budgetary control
regard at the time of inflation. When there is a
inflation taking place in economy then it
become hard to frame suitable aims and targets
with business consideration.
Define target to each and every department
properly and effectively which contribute in
promoting effective and efficient working
towards sustainability and success.
Evaluation of need for each and every
department is not possible in frame because
each and every department wants vary from
each other. Thus, top authority consider it hard
to evaluate all aspects in a suitable frame.
Promote and support centralisation at such
working environment where decentralisation is
taking place so that suitable coordination
between each and every aspect could be
maintain for long term consideration.
Future uncertainty impacted budgetary control
most which impacts negative influence on
business and its operations.
Formulation of advance plan become possible
through this aspect so that encouragement
towards smooth and appropriate working
become possible. Hence, Brooklands become
able to accomplish targets and goals properly.
Although, conflicts between various
department get enhance through budgetary
control because sometimes, some division get
more budget where as some not. This increase
chances of various associated problems and
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