Management Accounting: Systems, Reports & Tools at STG Ltd

This report provides a detailed analysis of management accounting systems and practices at Super Toughened Glass Ltd, a glass manufacturer in London. It explores various management accounting systems, including cost accounting, job costing, price optimization, and inventory management, highlighting their essential requirements and benefits. The report also discusses the importance of management accounting reports such as budget reports, accounts receivables aging reports, departmental reports, and performance reports. Furthermore, it delves into cost calculation techniques like marginal costing and absorption costing, evaluating their advantages and disadvantages. The report also touches upon the advantages and disadvantages of planning tools and compares different organizational responses to financial problems. This comprehensive analysis aims to provide insights into how effective management accounting can aid in decision-making and improve overall organizational efficiency.

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management Accounting Systems........................................................................................1
P2: Management Accounting Reports.........................................................................................3
M1: Evaluation of benefits of Management Accounting Systems..............................................4
D1: Critical evaluation of Management Accounting Systems and Management Accounting
Reporting......................................................................................................................................4
TASK 2............................................................................................................................................4
P3: Calculation of costs...............................................................................................................4
M2: Accurate application of the techniques................................................................................9
D2: Producing of financial reports...............................................................................................9
TASK 3............................................................................................................................................9
P4: Advantages and Disadvantages of Planning Tools................................................................9
M3: Analysis of planning tools..................................................................................................11
TASK 4..........................................................................................................................................11
P5: Comparison of organizations...............................................................................................11
M4: Analysis of response to financial problems........................................................................13
D3: Evaluation of planning tools...............................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Management Accounting refers to the use of the available financial facts and information
which can be derived from the financial statements so that the analysis and interpretation can be
carried out in detail and therefore the decisions can be taken which will help in ensuring the
proper management of funds within the organization (Ajam, 2021). It is thus required from the
management of a firm that it is able to make its use so that the conclusions and recommendations
which can be useful can be derived. Thus, it is quite important for the managers of a firm to
make sure that it is being used and thus is helping in improving the overall level of efficiency
and effectiveness. This report is based on Super Toughened Glass Ltd. It is a Glass manufacturer
in London, England. In this report, a detailed and specific focus will be made on the way in
which the use of Management Accounting can be made so that the right and appropriate
decisions can be taken which will therefore help in the attainment of the goals and objectives in
the future.
MAIN BODY
TASK 1
P1: Management Accounting Systems
It is the process of making provisions of economical data for development of business
and making its functioning more effective as well as accurate (Al-Dmour, Zaidan and Al Natour,
2021). Managers of Super Toughened Glass Ltd. use management accounting system to make
better business decisions. There are several types of management accounting system and some of
them are listed below in context to Super Toughened Glass Ltd.:
Cost accounting system: An accounting system in which cost of a product is determined
and analysed by cost accountant refers to cost accounting system. Managers of Super Toughened
Glass Ltd. use this accounting system to identify cost of glass manufactured so that they can
judge company's viability.
Essential requirements of Cost accounting system of Super Toughened Glass Ltd.
are described below:
 This system is essentially required in company to find out profitable and unprofitable
operations of business so that activities which are generating losses can be easily
removed or converted into profitable activities.
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 To evaluate the reasons for losses, this accounting system is required. It helps managers
of company in determining the cause of loss so that they can face the problem by solving
or minimizing the losses.
Job costing system: It is an accounting system in which cost of a particular job or project
is tracked according to customer perception (Alam and Hoque, 2021). Administrators of Super
Toughened Glass Ltd. use this system to develop a database for determining cost of a particular
project. This system provides them overall information on direct cost.
Essential requirements of Job costing system:
 This accounting system is required in company to determine performance of human
resources of Super Toughened Glass Ltd. It helps them in assessing data of individual
performance in respect to their efficiency.
 To create a budget of company, this system is required. It helps them in pick out details
of each job so that cost of particular project is determined and hence budget can be
created by analysing cost of each job.
Price optimization system: A system in which price of product is determined by
calculating variations of demand at different price levels is known as price optimisation system
(Bracci and et.al., 2021). Managers of Super Toughened Glass Ltd. use this accounting system to
determine price of toughened glass at different stages of manufacturing.
Essential requirements of Price optimisation system:
 This accounting system is required by managers of Super Toughened Glass Ltd. to make
fast business decisions with the help of its automation process which reduces mistake
caused by workforce of company.
 To regulate and monitor price decision of products, managers of company requires this
accounting system so that they can assign correct price for correct product.
Inventory management system: It is a system in which inventory of company is tracked
through overall supply networks to figure out needs of inventory required by customers (Ciullo,
2020). It help managers of Super Toughened Glass Ltd. in controlling costs by making stock
report analysis of company's inventory.
Essential requirements of Inventory management system:
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 To minimize risk of overselling, managers of Super Toughened Glass Ltd. requires
inventory management system so that they can order the products which are short in their
inventory.
 Managers of Super Toughened Glass Ltd. require this system to enhance profitability by
perfect understanding of demand and availability of products.
P2: Management Accounting Reports
Management Accounting Reports are required within the organization so that the
organizations are able to analyse and interpret the given financial figures, facts and information
so that the decisions can be taken in a right way (Jasim and Raewf, 2020). For an organization
like Super Toughened Glass Ltd. It is quite important that it is able to make the use of these
reports so that it can raise the overall efficiency and effectiveness in a proper manner. The
following reports can be used by the organization-
Budget Reports- These reports are quite important and useful because through making
their use the identification of the useful information which has been provided in the Budgets can
be done so that the attainment of the goals and objectives can be done (Karagiorgos and et.al.,
2020). Through making their use the organizations can easily identify the deviations and
variations and can take the different types of corrective actions so that they can be removed. For
an organization like Super Toughened Glass Ltd it is important that it uses these particular
reports so that it can take appropriate decisions.
Accounts Receivables Ageing Reports- These reports are necessary to be used because
through making their use a detailed list of the different types of Accounts Receivables Ageing
Reports can be framed. For an organization like Super Toughened Glass Ltd it is necessary to
make sure that the use of these reports can be made. This helps in keeping a better track of the
Debtors of the organization so that the collection of the debts can be done on a right time.
Departmental Reports- These reports are useful for keeping a better track record of the
different types of departments of the organization. There are various departments within an
organization like Production, HR, Finance, Marketing etc. Therefore, it becomes quite important
that the right use of these particular reports can be made so that the deviations and variances in
the performance of the departments can be done and the right and appropriate rectifying actions
can be taken to remove them. In Super Toughened Glass Ltd it is necessary that the right use of
these reports can be made.
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Performance Reports- These reports are essential because through them the better
tracking of the performance level of an organization can be carried out. Therefore, it becomes
important that the use of these reports can be made so that the identification of the deviations and
variances in the performance can be done so that the rectifying actions can be taken to remove
them. For Super Toughened Glass Ltd it is therefore important that these reports are used so that
the relevant improvements in the level of performance can be made.
M1: Evaluation of benefits of Management Accounting Systems
Cost Accounting System is helpful in the determination of costs and therefore identifying
the ways of reducing them. Inventory Management System is quite useful in the identification of
the stock items and therefore reducing the excessive inventory costs. Job Costing System is
helpful in keeping a track record of the job orders and ensuring that the excessive job costs can
be reduced. Price Optimization System is helpful for identifying the price to be set and ensuring
the comparison of the prices. Thus, in this way they provide a lot of benefits for Super
Toughened Glass Ltd.
D1: Critical evaluation of Management Accounting Systems and Management Accounting
Reporting
Their critical evaluation is quite important and necessary to be done because through
making their use the different types of decisions can be taken which can be highly helpful for the
organizations. Therefore, it is important that the managers are able to ensure that their proper and
right use is made so that the better decisions can be taken. In this way, the required level of
improvements can be made which will therefore help the firm a lot. Therefore, in this way this
can be helpful for a company like Super Toughened Glass Ltd.
TASK 2
P3: Calculation of costs
The proper and detailed assessment of the different types of costs can be done through
making the use of different types of techniques. It is therefore quite important and essential that
the calculation of these particular costs can be done in quite a proper and appropriate manner.
The techniques which can be used are as follows-
Marginal Costing-
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It is a technique through which the determination of the profits can be carried out and
also the calculation of Break-Even Point can be done (Li, Haohao and Ming, 2020). For Super
Toughened Glass Ltd it is therefore quite important and essential that its use should be made so
that the management of the particular level of needs and requirements can be done.
Advantages-
 This technique is very simple to use and understand. Therefore, in this way it is highly
useful for the different types of organizations.
 The use of this technique helps the firms in calculation of the Break-Even Point.
Therefore, this helps the different types of firms.
Disadvantages-
 Through making the use of this technique the proper treatment of the various overheads
incurring within the organization can be carried out.
 The organizations can find it difficult to cover up costs and earn a fair return on capital
employed when they make its use.
Absorption Costing-
It refers to a technique through which a proper and detailed assessment of the costs within the
organization can be carried out (Nandisa, 2021). Also, through making its use the treatment of
the overheads within the company can be done. For an organization like Super Toughened Glass
Ltd it is quite necessary that this technique can be used so that the deriving of the appropriate
conclusions and recommendations can be carried out.
Advantages-
 Through making the use of this particular technique the calculation of the prices can be
done fairly within the organization. Therefore, in this manner it can be stated that this can
be quite helpful for the management of the organizations.
 When the use of this method is made the determination of profits can be done quite
accurately. Thus, this can be highly helpful for the management of the different types of
organizations.
Disadvantages-
 The use of this particular technique is not very suitable for the purpose of taking of
important decisions. Thus, this creates a problem for the various types of organizations.
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 The use of this method is not helpful for the purpose of preparation of a Flexible Budget.
Therefore, this impacts a lot of organizations.
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M2: Accurate application of the techniques
It is important to ensure this because in this way the determination of the profits can be
done quite appropriately. In Super Toughened Glass Ltd it is therefore quite necessary that this
can be done so that the management of the different types of needs and requirements can be
carried out in a proper way. This will help the company to be able to enhance the overall level of
profitability in a right manner. Therefore, it can be stated that it is necessary that the managers of
the company are able to identify the particular way in which the accurate application of the
techniques can be carried out.
D2: Producing of financial reports
Financial reports are quite important to be prepared because through making their use the
analysis and interpretation of the given financial figures, facts and information can be done in
quite a proper and appropriate way. In Super Toughened Glass Ltd it is therefore quite important
that they should be used so that the decisions can be taken in a better way in the organization so
that the enhancement in the overall level of profitability can be carried out in a right manner.
TASK 3
P4: Advantages and Disadvantages of Planning Tools
Budget refers to a statement in which the detailed account of the different types of
receipts and expenditures can be made which will therefore help a lot in ensuring that the
appropriate decisions can be taken quite effectively and efficiently in a proper manner (Ozili,
2021). For Super Toughened Glass Ltd it becomes necessary to ensure that their right use can be
made. The Planning Tools which can be used by the organization are explained as follows-
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Fixed Budget-
A Fixed Budget is a Budget in which the different types of facts, figures and information
which are taken are constant in nature and therefore are quite useful and helpful for the
organizations (Samansiri and Madhusanka, 2020). Super Toughened Glass Ltd can therefore
make the use of this budget for attaining higher-level of efficiency and effectiveness.
Advantages-
 The use of this particular budget can be made so that the better stability can be ensured
within the organizations. This can be helpful for Super Toughened Glass Ltd.
 This budget is helpful for the purpose of ensuring better savings in the organizations. For
Super Toughened Glass Ltd it can be quite useful.
Disadvantages-
 The use of this particular budget does not allows scope for making the necessary
adjustments. This can create problems for Super Toughened Glass Ltd.
 The adjustment according to the changes cannot be made within the organizations when
the use of this Budget is made. For Super Toughened Glass Ltd this can lead towards a
disadvantage.
Flexible Budget-
A Flexible Budget is a Budget in which the changes are witnessed with a change in the
activity level (Semenyshena, Khorunzhak and Zadorozhnyi, 2020). Therefore, for Super
Toughened Glass Ltd. It is important that the right use of this budget can be made.
Advantages-
 In this budget the calculations can be made according to the different activity levels. This
can be helpful for Super Toughened Glass Ltd.
 This budget can be adjusted according to a change in the activity level. It is not rigid.
This can be quite useful for Super Toughened Glass Ltd.
Disadvantages-
 There is a requirement of skilled workers for creating this budget. This can create a
disadvantage for Super Toughened Glass Ltd.
 Making this budget is an expensive affair. For the mangers of Super Toughened Glass
Ltd. This can create a disadvantage.
Master Budget-
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This is a Budget which includes the different types of Budgets which are prepared in the
organization. For Super Toughened Glass Ltd. It is necessary to make its correct use so that it
can be helpful for the company.
Advantages-
 A proper idea of the financial status of the company can be made when its use is made.
This can help Super Toughened Glass Ltd.
 It is helpful in the measurement of performance and therefore can help in bringing the
required improvement in it. This can be useful for Super Toughened Glass Ltd.
Disadvantages-
 The Master Budget cannot be changed over the course of time. This can therefore create a
disadvantage for Super Toughened Glass Ltd.
 It is difficult to find out the mistakes when this Budget is prepared. Therefore, this can
create a disadvantage for Super Toughened Glass Ltd.
M3: Analysis of planning tools
It is important to make sure that the use of planning tools can be made in the
organizations. Super Toughened Glass Ltd therefore has to make sure that by making their use
better planning can be done by it which will therefore help in ensuring that the appropriate steps
can be taken for managing the funds in a better way.
TASK 4
P5: Comparison of organizations
Financial Problem- It refers to a particular situation in which the organizations face
difficulties in managing their funds (Tran, Dinh and Nguyen, 2020). Super Toughened Glass Ltd.
Therefore needs to ensure that they find out the appropriate solutions for them. The problems
which are being faced by the company are-
 Mismanagement of job orders- The job orders in the company are being mismanaged
and therefore this is increasing the overall job costs. Thus, it can be stated that this is
creating a lot of impact on the company.
 Lack of setting of proper prices- The prices are not being set in a proper manner and
therefore this is creating an impact on the level of operations of the company. Thus, it can
be stated that it can affect the company a lot.
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Techniques to solve financial problems-
 Financial Governance- Financial Governance refers to the way in which the company is
able to collect, manage, monitor and control the financial information (Yekimov and
et.al., 2021). Therefore, it can be stated that through making its use the company will be
able to solve the problem of job orders as it will help in ensuring a better management of
the job orders.
 Balanced Scorecard- Balanced Scorecard is a tool which is used to prepare an overall
report of the performance level of the staff members so that the identification of the scope
of improvement can be made which will be useful in bringing out these particular
improvements (Yu, 2021). Thus, through its use the problem of prices can be solved
because this technique will be useful to assess the problem and finding out solutions to
solve it.
Comparison of organizations
Basis Asda Aldi
Financial Problem The company is facing a
problem of excessive costs
which is impacting its
profitability level.
The company is facing a
problem of mismanagement of
inventory items which is
increasing its inventory costs
and reducing the profits.
Management Accounting
System Used
Cost Accounting System Inventory Management System
Application of the system The use of this particular
system can be made so that the
ascertainment of the costs can
be made in quite a proper
manner.
The use of this particular
system can be made so that the
management of the stock items
can be made which will help in
bringing relevant
improvements.
From the above discussion, it can be stated that learning from Asda and Aldi, the
managers of Super Toughened Glass Ltd should be able to make use of Management Accounting
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System so that the financial problems can be solved. The use of Job Costing System can be made
to solve the problem of job orders. The use of Price Optimization System can be made to solve
the problem of prices.
M4: Analysis of response to financial problems
It is necessary to make sure that the necessary response to the financial problems can be
provided in the organizations. Super Toughened Glass Ltd therefore is required to ensure that it
is able to take the appropriate actions through which it will be able to solve its problems in a
right manner. This will help the company to be able to make sure that it is able to properly
manage its funds.
D3: Evaluation of planning tools
The use of the appropriate planning tools is necessary in the organization so that it is able
to make sure that it can plan accordingly. In Super Toughened Glass Ltd it is therefore quite
important and necessary that the company is able to make sure that through making the use of
the right plans the decision-making can be facilitated in a proper manner.
CONCLUSION
From the above report, it can be concluded that Management Accounting refers to the use
of methods and techniques through which the better decisions can be taken. It is therefore
necessary that its right use is made so that the financial plan are implemented and thus the
enhancement in the efficiency and effectiveness level can be done. It is thus quite important and
necessary that the appropriate decision-making can be done through making its use. The
managers are required to identify the way in which its proper and right use can be made so that
the Analysis and Interpretation can be done which will lead towards deriving of the necessary
conclusions and recommendations. Thus, the organizations should be able to implement it in
their planning.
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