Management Accounting Report: Financial Analysis of Tech UK Operations

This report offers a comprehensive analysis of management accounting principles, focusing on their practical application within Tech UK. It begins by differentiating between management and financial accounting, highlighting their respective roles and importance. The report delves into various cost accounting systems, including actual, standard, and normal costing, along with an exploration of inventory management techniques such as FIFO, LIFO, and AVCO. Furthermore, it examines job costing systems and different types of management accounting reports, such as budgets, exception reports, and inventory reports. The report also discusses the significance of these reports in decision-making, cost reduction, and enhancing financial returns. The report concludes with a discussion on marginal and absorption costing and their application in income statement preparation.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Management accounting and its systems..........................................................................3
P2 Information of finance.......................................................................................................5
TASK 2............................................................................................................................................7
P3 Income statement using the operation and marginal costing............................................7
TASK 3..........................................................................................................................................10
P4 Different Kind of budget are there and having pros and cons of it.................................10
TASK 4..........................................................................................................................................11
P5 Management Accounting with financial problem too.....................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
In today's scenario the competition is increasing at huge level and every industry do
require to have an management accounting in effective way, so that firms can make an proper
decision and product an strategy for the development of there company and can fight up with cut
throat competition in better way. Even though, it also help in maintaining the day to day
transaction (Garrison and et. al., 2010). Basically, entity also uses advanced technology for
coming up with proper solution to the risks and problems associated with financial accounting.
The written report is based on the Tech UK which is serving million of people with the phones,
special charger of cell phone and gadgets etc.
Assignment will discuss about, comparison in between financial and management
accounting and its significance by specifying management accounting. Different accounting
report and there significance with marginal and absorption costing etc. Apart from having an
budget with an pros and cons with its value as well.
TASK 1
P1 Management accounting and its systems.
a.) Management Accounting and financial accounting with difference in between.
Basis Financial Accounting Management Accounting
Meaning. It is that which leads to
classify, analyse and also
record variety of components
and also have in form of
concise manner with financial
affairs with entity in proper
way.
Management Accounting is
that which is considered as
producing effective decision
and strategies for Tech UK
limited.
Application Financial accounting is as
which shows maximum
accuracy in proper way and
also having an picture of
various financial affairs too in
Management Accounting is
thus which do make an staff by
having an meaningful steps
and various strategies too.

great way.
Rules Even though the Financial
Accounting is that which is
being prepared as per GAAP
and IFRS in great way.
Management Accounting is
that which do follow some of
the rules and regulation in
proper way.
Dependence Financial accounting never
gets depending on
management accounting in
great manner.
Management Accounting is
that which take an help from
the financial accounting to
have some right decisions in
proper way.
b.) Importance of management Accounting information for having an decision making.
Management Accounting information is such which help company to produce an
effective decisions and strategy. It also help company to use the finance in better way. Some of
the importance of same are as:
 This is such which help in determining the carrying out metrics for the different
department in great manner as well.
 Management Accounting is that which leads to analyse the effective variations that also
look forward to provide some accurate solutions and in corrective measures in proper
manner as well.
 Collecting genuine data and compare it having report in between the some of indicators
with current performance that also have an expectation with business.
 Management Accounting also has advanced tools and the techniques that has an key
performance indicators and also having an balance scorecard with future plan and it is
done regards to management system too.
c.) The different accounting cost system is that which also include the various cost and also has
some of those are as:
 Actual cost: It is that which leads to have an actual expense which is made in acquiring
an asset, it is such that include supplier and having an invoice expenses with aid to cost of

delivery and also lead to test asset (Fullerton, Kennedy and Widener, 2014). It is
considered and recorded as financial statement which is fixed asset.
 Standard costing: This is that which Substitute the cost for having an actual one in
having an accounting record that has an periodic variance which also shows an difference
in between expected and actual cost too. Normally, it contain simplified alternative
system as FIFO and LIFO method as well. Even though, it is having an large number of
cost information in which maintenance of items are there.
 Normal Cost: Normal cost needs to provide some of value and leads to have produced
product with the accurate cost and includes the direct labour cost which also manufacture
with the predetermined overhead rate as well in better manner. Therefore, cost is
considered with to product cost and it is quite used for cost of goods sold in effective
way.
d.) Inventory management system:
Inventory management system is such that needs to be considered as transferring an
product and services of firm from one place to another. (Dillard and Roslender, 2011). Entity is
that which also handle stocks on regular basis that having an place that also leads to have an
order for product and deliver commodities to different customer. Basically, it is there which
needs to be identified to have an determination of inventory of product which do help in meeting
up the needs and desires of consumer that get satisfied in better way. Basically, there variety of
stock valuation techniques which is needed to follow while performing at the time of performing
in better way:
 FIFO:- In Organisation, actual flow of materials are there which needs to follow some of
the method and having an accounting legal selection as well. There are no use of GAAP
restrictions on use of FIFO and having at reporting at financial outcomes too.
 LIFO: In certain business, earlier product were used to kept in with inventory. The IRS
use this concept sometimes but as subsidiary.
 AVCO: Moreover it is required to have periodic and inventory system and they also uses
different techniques and tools in firm. Hence, various similar cost is there and having an
average method too and required to analyse total value with ending stock and cost of
sales in better way.
e.) Job Costing system.

It is that method of accounting which needs to be determined by cost that is occurred in
having an development of jobs with which firm is earning an huge income and profits in
effective way. Moreover, situation has different needs and things are there that also help in
collecting information and data which is somewhere related with the expenses in income of same
too. Hence, there are various costing system and some of those are as:
 Batch Costing: It is an effective particular order costing. Basically in this batch marked
areas were there and has identical unit and they came to separate from one another.
 Contract Costing: It is needed to use flow of cost which is somewhere associated with a
particular individual as well. For instance, company is having an bid wide construction
projects which is considered as prospective customers in great way.
 Service costing: it is that which considered as operating cost in which firm do provide
services in with accordance to in production in with during the time too.
P2 Information of finance.
a.) Type of management accounting reporting.
Various method is there which is being used in production of the managerial reporting in
accurate way. Report are those which do include things like budget and the job cost etc. It is
quite like collecting information that is related with the finance and non-finance data which may
do help in handling the performance of the firm in great way. Some of them are as:
 Budget: Budget is that which is prepared in better manner as because it involves
expenses with incurred in earlier years as well in right context. Moreover, budget is that
which do help in having an execution of performance in various department. (Cinquini
and Tenucci, 2010). Budget report is somewhere help in mainly with control expense and
wastages that also sometime occur in with between the process that may help in looking
forward which do help in reduction of some of the operational cost and such it is be like
themselves that lead to attain the goals and objective too.
 Exception report: It is considered as abnormal cost that might include the outside rage
of particular thing of range. Basically reports are those which are strictly prohibited
without having any type of permission from owners too.
 Demand report: It is that report which is pre-planned and it also needs to formulate
requirement of some interested parties and performed in great way. Even though it can be

seen that demand for the course can be there and concluded according to scheduler it is
pre-recorded under this report as well.
 Inventory: Inventory does consider the reports and also consider production of product
in Tech UK. Normally the report is such which do help in managing raw materials and
also lead to somewhere that help in finished goods in effective way. Basically, it such
which help company to produce product and services according to the requirement of
people and customer which also lead in allocation of resources in proper way.
Minimising labour cost and overhead cost can help firm in there working too.
 Account receivable: Accounting is that which do help in handling and monitor debtors
in better way. Moreover, it is included merely as effective and proper tool which leads to
use the firm and also handle flow in better way (Christ and Burritt, 2013). So it will
include the decision and strategy which is regarding to credit with customer. This does
make them to keep in mind about having an different number of debtors that also create
proper and better policies with procedures in appropriate way.
 Job Cost: Report should be made by staff and it is such which also needed to identify the
different expenses which is going to occur at the time of having an implementation of
task and activity. It is like matching up variety of expenses with assumed income too.
Moreover, it does make firm to attain its goals and objectives in right context and earns
higher income with profit as well. Normally, contributing the cost with the time for firm
needs to lead and help him in minimising the operation and having an worth of it in
correct way.
There are some importance of these report system for entity that do help in performing the better
way, so that firm is such which can help in attaining the goals and objectives in perfect way.
Reduced cost: Data and information is such that management of firm which lead to
assume some of the future issues and it also make an proper plans for having an purpose of
ignoring the different issues or problems as quickly as possible in proper way as well
(Baldvinsdottir, Mitchell and Nørreklit, 2010). Basically, it do help in having an reduction with
cost of productions that has an process of various quality product which is affordable at
reasonable prices too.
Decision making: Information is that which do lead with finance and non-finance criteria
which do make them in knowing various accurate problem of money and they do take some of

the important necessary steps that has an execution of different business task which is done
according to it only. Basically, management do formulate an planning, performance management
and also having an risk which also gain an productivity too.
Increase financial return: Procedure are those which is being implemented, even
though it is such which was required by following an management of entity too. Moreover, it is
such which required to conduct the program in better manner as employees are those which lead
to perform employees as to perform something in better way which has an possible outcomes in
near future too.
TASK 2
P3 Income statement using the operation and marginal costing.
Cost: Cost is that which incur by making an investment of finance in the production
sector that also produces some of the quality product and services for customers. Determining
some cost that also lead to have an incur with at few of the steps of process that do sell quality
product to ultimate customer in perfect way too.
Marginal costing: It is that which is invested in manufacturing part on the extra unit of
production of product with the variable resources in better way (Macintosh and Quattrone,
2010). Basically, at some time calculation is having an marginal cost which do lead in having an
variable cost and it is taken into accounts as it is that which do exclude some fixed expense.
Moreover, costing is also mainly used in company with maximal number of entity that do help in
earning huge profitability in better way.
Absorption costing: It is such method for having an aim of such calculation of accurate
cost of production with both shifting and fixed cost which taken into account as well. Generally,
additional cost is fixed and also have cost in with profit which looks up in that compare the
marginal costing method as well in better manner too.

Income statement on basis of the marginal costing method:

From above statement, it can result as which note change in closing stock and having an
valuation of 2500 that has an valuation through the marginal costing which leads to have an
settlement of fixed cost when it is coming in for 2125.
TASK 3
P4 Different Kind of budget are there and having pros and cons of it.
There are various types of budget which is being prepared by the management of the
Tech UK limited wit having an main objective of operating the business in better manner way. It
does include master budget, operational budget and also having an cash flow budget. Types of
budget are as under:
Master budget: It is considered as the strategy that also need to forecast the future sales,
production level and also having an capital investment as well which requires a proper execution
of the future business activities in better way. Budget is something that is also interrelated with
the budget and also has an different kind of department of firm (Nixon and Burns, 2012). Even
though, it is something which is generally needs to be having an goal of making an impressive
plan for not performing objectives in better way.
 Advantages: It is that which include all the cost that is being incur with the production
process as well.
 Disadvantages: Budget is such which needs to be made an preparation of specific
activity that has an reliability for accurate information which may be reduce.
Operational budget: Budget must cover some revenue and cost as well which incur on daily
basis with operating business activity in better way. Cost is such which is incurred with
production process which also consider the overhead and administrative cost which is being used
to identify a management of firm in right context.
 Advantages: It is that which also represent revenues and cost which do incur in with the
daily business activities operations. Generally, it is such which help in decrease of cost
that incur with upcoming business operation in right manner too.
 Disadvantage: Normally, they also consume more and more time to have an preparation
of the operational budget with having an functions of firm in effective way.