University Management Accounting Report: Concepts and Applications

This report on management accounting delves into several key aspects of the field. It begins by exploring the concept of Panopticism in relation to management accounting, highlighting its role in monitoring and surveillance of transactions. The report then outlines the three primary functions of management accounting: planning, organizing, and controlling, providing detailed explanations and examples for each. It touches upon the use of checklists, drawing an interesting analogy to a rock band's concert rider. The report also includes a discussion of perpetual inventory systems and the treatment of overtime costs. The assignment further incorporates manufacturing and income statements in both normal and formula views, as well as journal entries and ledger postings. Finally, it provides a comprehensive reference list of relevant academic sources.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author’s Note:

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MANAGEMENT ACCOUNTING
Table of Contents
Answer to Question No 1................................................................................................................2
Answer to Question No 2................................................................................................................3
Answer to Question No 3................................................................................................................5
Answer to Question No 4:...............................................................................................................6
Normal View:..............................................................................................................................6
Manufacturing Statement:.......................................................................................................6
Income Statement:...................................................................................................................7
Formula View:.............................................................................................................................8
Manufacturing Statement:.......................................................................................................8
Income Statement:...................................................................................................................9
Answer to Question No 5..............................................................................................................10
Answer to Question No 6:.............................................................................................................10
Answer to Question No 7:.............................................................................................................11
Answer to Question No 8:.............................................................................................................11
Requirement a:...........................................................................................................................11
Requirement b:...........................................................................................................................11
Requirement c:...........................................................................................................................12
Reference List................................................................................................................................14

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Answer to Question No 1
Panopticism is a social or a communal theory named after Panopticon, which was created
by a French philosopher Michel Foucault. The panopticon addresses to an experimental
laboratory associated with power within which the behaviour can be changed or modified and
panopticon is looked upon as the sign of disciplinary society of surveillance. It is known as the
role of the disciplinary process like in a prison and explains the function of the discipline as an
equipment of power (Soltani et al., 2014). It is an ever visible inmate and recommends that it is
an object of information and is not a topic of communication.
For instance, panoptic theory has extensive ranging effects for surveillance in the digital
age and therefore it is seen that surveillance have an effective cultural allure. The rising visible
data that is made accessible to the companies and the individuals from the technologies of new
mining has led to proliferation of data surveillance which can be explained as the medium of
surveillance that looks to single out any specific kind of transaction with the help of routine
algorithmic production.
In accordance to definition that is given on Panopticism, is seen that this process has a
key role to play in the process of management accounting because in Panopticism leads to proper
monitoring and surveillance of all the transactions that are taking place and the surveillance of
each and every transaction details thereby keeping track of all the transactions and eliminating
the chances of any kind of error.

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Answer to Question No 2
The three functions of management accounting are as follows:
Planning
It is the process of constructing the long term and short term actions and plans to gain a
specific end. Management accounting is a closely connected with planning as it provides the data
for the purpose of decision making and because the entire process of budgeting is created around
the reports that are associated to accounting (Otley, 2016). Management accounting assists the
managers in planning by giving out reports which projects the impact of the alternative actions
on the ability of a company to attain their desired objectives and goals. For instance, what are the
products that are to be sold and at what prices? The process of management accounting creates a
data that aids the managers to recognise the products that are more profitable. In the same
manner the impacts of the substitute prices and the efforts of selling can be determined easily by
the management accountant. As a section of the process of budgeting, the management
accountants construct financial statements which are called proforma statements.
Organising
Organising is the process of creating a business framework and allocating the
responsibilities to the employee functioning in the company for gaining the objectives and goals
of the business. The kind of organizational framework is different from one company to the
other. In the process of organising departmentalization can be undertaken by creating divisions
sections and branches (Fullerton et al., 2014).
Organising is in need of clarity about the obligation of the managers and the authority
lines. The several departments and units are interconnected in a hierarchical manner with a

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formal structure of communication in which the data and the instructions are forwarded down to
the lower level management and upwards to the management of the top level.
Management accounting assists the managers in organising by giving out the documents
and the reports that are essential information in order to adjust and regulate the activities and the
operations in accordance to the changing scenario (Maas et al., 2016). For instance, the
documents under the process of management accounting can be constructed on the product lines
on which the managers can take the decision whether to eliminate or add a product line in the
present mix of product. In the same manner, the management accountant can provide the sales
report, production report to the managers for taking appropriate actions about the production and
the sales position.
Controlling
Controlling is the process of computing, assessing, monitoring and rectifying the actual
result to make sure that the business plans and goals are attained. Control is attained with the
help of gaining feedback (Chenhall, & Moers 2015). Feedback is the data that can be utilised in
order to assess or rectify the steps that is being taken in order to incorporate a plan. Feedback
permits the managers to take decisions to let the activities and the operations to sustain as they
are and take rectifiable decisions to put certain actions back in the agreement with the actual plan
and objectives or do certain re-planning and rearranging at the midstream.
Management accounting is helpful in the control function by manufacturing performance
reports and the control reports which addresses the variances among the actual and the expected
performances. These statements and reports acts as a basis for undertaking essential corrective
measures in order to control the operational process. The utilisation of the performance and

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control statements follows the principle of the management by exemption. In case of the key
differences among the actual and the budgeted outcomes, a manager will generally examine in
order to ascertain what is happening wrong and probably, which units may require assistance.
Answer to Question No 3
Checklists are seen even in the arena of rock and music. There exists a story of the fact
that rocker David Lee Roth’s disreputable case that Van Halen’s agreements with the promoters
of the concerts had a clause that explained that a bowl of M&M’s has to be given at the
backstage, but with every individual brown candy that has been removed, during the forfeiture of
pain of the show; with an entire compensation to the band. Even once, Van Halen actually
followed the same and cancelled the show in Colorado when some brown M&M were found in
the dressing room of Roth. This turned out to be however, not an mad demand and authority of
the mad celebrities but an resourceful trick (Cooper et al., 2017).

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Answer to Question No 4:
Normal View:
Manufacturing Statement:
Particulars Amount Amount
($) ($)
Direct Materials:
Raw Materials 1/10/X6 11000
Raw Materials Purchased 842000
Inward Charges on Raw Material 25340
878340
Less: Raw Materials 30/09/X7 26000
Raw Materials to Production 852340
Add: Work in Process 1/10/X6 23000
875340
Less: Work in Process 30/09/X7 15000
Raw Materials in Goods Manufactured 860340
Direct Labor:
Direct Labor 456780
Add: Work in Process 1/10/X6 17000
473780
Less: Work in Process 30/09/X7 11000
Direct Labor in Goods Manufactured 462780
Prime Cost 1323120
Manufacturing Overhead:
Manufactring Expense 370000
Salaries (Factory) 380400
Insurance 9225
Rates 9425
Depreciation on Machinery 12900
781950
Add: Work in Process 1/10/X6 26000
807950
Less: Work in Process 30/09/X7 8000
Manufacturing Overhead in Goods
Manufactured 799950
Cost of Goods Manufactured 2123070
Tendulkar Manufacturing Co.
Manufacturing Statement
for the year ended 30th September 20X7

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Income Statement:
Particulars Amount Amount Amount
($) ($) ($)
Sale of Finished Goods 3856000
Cost of Goods Sold:
Finished Goods 1/10/X6 50000
Cost of Goods Manufactured 2123070
Cost of Goods Available for Sale 2173070
Less: Finished Goods 30/09/X7 32000
Cost of Goods Sold 2141070
Gross Profit 1714930
Add: Other Operating Revenue
Discount Revenue 5320
1720250
Selling Expenses:
Advertising 24000
Freight outwards 6543
Sales Commission 47600 78143
Administrative Expenses:
Salaries (Offi ce) 35000
General Expenses 54320
Light & Power (Offi ce) 23000
Rates 3142
Insurance 3075
Audit Fee 12000 130537
Financial Expense:
Discount Expense 3450 212130
Net Profit 1508120
Tax Expense 56740
Net Profit after Tax 1451380
Tendulkar Manufacturing Co.
Income Statement
for the year ended 30th September 20X7

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Formula View:
Manufacturing Statement:
Particulars Amount Amount
($) =B6
Direct Materials:
Raw Materials 1/10/X6 11000
Raw Materials Purchased 842000
Inward Charges on Raw Material 25340
=SUM(B8:B10)
Less: Raw Materials 30/09/X7 26000
Raw Materials to Production =B11-B12
Add: Work in Process 1/10/X6 23000
=B13+B14
Less: Work in Process 30/09/X7 15000
Raw Materials in Goods Manufactured =B15-B16
Direct Labor:
Direct Labor 456780
Add: Work in Process 1/10/X6 17000
=B20+B21
Less: Work in Process 30/09/X7 11000
Direct Labor in Goods Manufactured =B22-B23
Prime Cost =C17+C24
Manufacturing Overhead:
Manufactring Expense 370000
Salaries (Factory) =367800+12600
Insurance =(16000-3700)*75%
Rates =12567*75%
Depreciation on Machinery 12900
=SUM(B27:B31)
Add: Work in Process 1/10/X6 26000
=B32+B33
Less: Work in Process 30/09/X7 8000
Manufacturing Overhead in Goods Manufactured =B34-B35
Cost of Goods Manufactured =C25+C36
Tendulkar Manufacturing Co.
Manufacturing Statement
for the year ended 30th September 20X7

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Income Statement:
Particulars Amount Amount Amount
($) =G6 =H6
Sale of Finished Goods 3856000
Cost of Goods Sold:
Finished Goods 1/10/X6 50000
Cost of Goods Manufactured =C38
Cost of Goods Available for Sale =H9+H10
Less: Finished Goods 30/09/X7 32000
Cost of Goods Sold =H11-H12
Gross Profit =I7-I13
Add: Other Operating Revenue
Discount Revenue 5320
=I14+I16
Selling Expenses:
Advertising 24000
Freight outwards 6543
Sales Commission 47600 =SUM(G19:G21)
Administrative Expenses:
Salaries (Offi ce) 35000
General Expenses 54320
Light & Power (Offi ce) 23000
Rates =B30*(25/75)
Insurance =B29*(25/75)
Audit Fee 12000 =SUM(G24:G29)
Financial Expense:
Discount Expense 3450 =SUM(H19:H32)
=IF(I33>0,"Net Profit","Net Loss") =I17-I32
Tax Expense 56740
=IF(I35>0,"Net Profit after Tax","Net Loss after Tax") =I33-I34
Tendulkar Manufacturing Co.
Income Statement
for the year ended 30th September 20X7

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Answer to Question No 5
(a) If a perpetual inventory system is utilised for the recording of the movement of the raw
materials, there is no need to undertake a physical stock take because of the fact that
perpetual system upgrades the records of the inventory as the organization makes use of
the raw materials or sell the products to their consumers (Messner, 2016). For instance, in
a store, when the consumers buys a product, the cash register deducts automatically the
product from the records of the inventory but in case of a manufacturing company, the
work order process deducts the raw materials from the records of the inventory when the
manufacturing department initiates the order. The perpetual system subtracts the finished
product from the system when the customers order the product from the facility.
(b) Overtime is the value or the amount that is paid for the extra hours worked over the
normal wage rate. Overtime amount is treated as an indirect labour cost and therefore is
treated in the manufacturing overhead. This is due to the fact that the overtime that is
worked in not within the actual working hour of the employee and the worker is working
additionally over their actual working hour (Chiwamit et al., 2017). This payment is an
overhead for the company as this is an additional payment over the direct labour cost that
is estimated by the company. This amount has to be paid by cutting down any other
expense source and thereby it is treated as an overhead.
Answer to Question No 6:
Dr. Cr.
Date Particulars Amount Date Particulars Amount
01-Apr To, Balance b/d 60000 30-Apr By,Work-in-Process A/c. 60000
30-Apr Accounts Payable A/c. 80000 30-Apr By, Manufacturing Overhead A/c. 30000
30-Apr By,Balance c/d. 50000
140000 140000
Material Control A/c.

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Journal Entry:
Dr. Cr.
Date Particulars Amount Amount
30-Apr Manufacturing Overhead A/c……Dr. 30000
To, Material Control A/c. 30000
Answer to Question No 7:
Dr. Cr.
Date Particulars Amount Date Particulars Amount
01-Jul To, Bank A/c. 40000 01-Jul By, Balance b/d. 18000
31-Jul By, WIP Control A/c. 50000
31-Jul To, Balance c/d. 50000 By, Overhead Control A/c. 22000
90000 90000
Accrued Payroll A/c.
Answer to Question No 8:
Requirement a:
Period
Nos. of
Days
Gross Payroll
per day
Accrued
Payroll
1/09 to 3/09 3 $8,000 $24,000
4/09 to 10/09 5 $8,000 $40,000
11/09 to 17/09 5 $8,000 $40,000
18/09 to 24/09 5 $8,000 $40,000
25/09 to 30/09 4 $8,000 $32,000
Total Amount credited
to Accrued Payroll 22 $1,76,000
Requirement b:
Period
Accrued
Payroll Payment Balance
1/09 to 3/09 $24,000 $24,000 $0
4/09 to 10/09 $40,000 $40,000 $0
11/09 to 17/09 $40,000 $40,000 $0
18/09 to 24/09 $40,000 $40,000 $0
25/09 to 30/09 $32,000 $0 $32,000
Month End Balance in
Accrued Payroll $32,000

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Requirement c:
i) Journal Entries:
Dr. Cr.
Date Amount Amount
03-Sep Payroll A/c. Dr. $24,000
To, Accrued Payroll A/c. $24,000
05-Sep Accrued Payroll A/c. Dr. $40,000
To, PAYG Withholding A/c. $12,000
To, Bank A/c. $28,000
10-Sep Payroll A/c. Dr. $40,000
To, Accrued Payroll A/c. $40,000
12-Sep Accrued Payroll A/c. Dr. $40,000
To, PAYG Withholding A/c. $12,000
To, Bank A/c. $28,000
17-Jul Payroll A/c. Dr. $40,000
To, Accrued Payroll A/c. $40,000
19-Sep Accrued Payroll A/c. Dr. $40,000
To, PAYG Withholding A/c. $12,000
To, Bank A/c. $28,000
24-Sep Payroll A/c. Dr. $40,000
To, Accrued Payroll A/c. $40,000
26-Sep Accrued Payroll A/c. Dr. $40,000
To, PAYG Withholding A/c. $12,000
To, Bank A/c. $28,000
30-Sep Payroll A/c. Dr. $32,000
To, Accrued Payroll A/c. $32,000
Direct Labor A/c. Dr. $1,05,600
Indirect Labor A/c. Dr. $35,200
Selling Expense A/c. Dr. $24,640
General & Administration
Expense A/c. Dr. $10,560
To, Payroll A/c. $1,76,000
PAYG Withholding Payable A/c. Dr. $48,000
To, Bank A/c. $48,000
Particulars
Journal Entries

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ii) Ledger Posting:
Dr. Cr.
Date Particulars Amount Date Particulars Amount
03-Sep To, Accrued Payroll A/c. $24,000 30-Sep By. Direct Labor A/c. 105600
10-Sep To, Accrued Payroll A/c. 40000 By, Indirect Labor A/c. 35200
17-Sep To, Accrued Payroll A/c. 40000 By. Selling Expenses A/c. 24640
24-Sep To, Accrued Payroll A/c. 40000
By, Geneal &
Administrative Expense
A/c. 10560
30-Sep To, Accrued Payroll A/c. 32000
$1,76,000 $1,76,000
Dr. Cr.
Date Particulars Amount Date Particulars Amount
30-Sep To, Payroll A/c. $1,05,600 03-Sep By, Work-in-Progress A/c. $14,400
10-Sep By, Work-in-Progress A/c. $24,000
17-Sep By, Work-in-Progress A/c. $24,000
24-Sep By, Work-in-Progress A/c. $24,000
30-Sep By, Work-in-Progress A/c. $19,200
$1,05,600 $1,05,600
Dr. Cr.
Date Particulars Amount Date Particulars Amount
30-Sep To, Payroll A/c. $35,200 03-Sep By, Factory Overhead A/c. $4,800
10-Sep By, Factory Overhead A/c. $8,000
17-Sep By, Factory Overhead A/c. $8,000
24-Sep By, Factory Overhead A/c. $8,000
30-Sep By, Factory Overhead A/c. $6,400
$35,200 $35,200
Indirect Labor Cost A/c.
Payroll A/c.
Direct Labor Cost A/c.

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Reference List
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accounting innovations: The case of economic value added in Thai state-owned
enterprises. Management Accounting Research, 37, 30-48.
Cooper, D. J., Ezzamel, M., & Qu, S. Q. (2017). Popularizing a management accounting idea:
The case of the balanced scorecard. Contemporary Accounting Research, 34(2), 991-
1025.
Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean manufacturing and firm
performance: The incremental contribution of lean management accounting
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Maas, K., Schaltegger, S., & Crutzen, N. (2016). Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production, 136,
237-248.
Messner, M. (2016). Does industry matter? How industry context shapes management
accounting practice. Management Accounting Research, 31, 103-111.
Otley, D. (2016). The contingency theory of management accounting and control: 1980–
2014. Management accounting research, 31, 45-62.

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Soltani, S., Nayebzadeh, S., & Moeinaddin, M. (2014). The Impact Examination of the
Techniques of Management Accounting on the Performance of Tile Companies of
Yazd. International Journal of Academic Research in Accounting, Finance and
Management Sciences, 4(1), 382-389.