Management Accounting Systems, Reporting Methods, and Techniques

This report provides an overview of management accounting systems and reporting methods, focusing on their application in a business context. It examines cost accounting, price optimization, and inventory management systems, highlighting their benefits and integration with organizational processes. The report also discusses budgetary control and various planning tools, along with the adoption of management accounting systems to address financial problems. The analysis includes practical examples related to Speedboard, a medium-scale manufacturing company, to illustrate the application of these concepts in real-world scenarios. The overall objective is to provide internal stakeholders with data related to internal business functions for better decision-making and improved working efficiency, ultimately contributing to the attainment of the firm's goals.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management accounting and its various management accounting systems....................1
P2: Justify various method of management accounting reporting.........................................3
TASK 2............................................................................................................................................6
P3: Cost accounting techniques to prepare an income statement...........................................6
TASK 3..........................................................................................................................................11
P4: Advantages and disadvantages of different kind of planning tools of budgetary control.11
TASK 4..........................................................................................................................................13
P5 Adoption of management accounting systems to respond financial problems...............13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting is the most suitable concept which is used in the association in
order to form the daily decision with the help of providing the managers of the business with
proper and appropriate financial information. This uses all the provisions of the accounting to
determine all the financial and statistical data which will further support in controlling the
business operations so that the goal of the firm can be attained within a stipulated duration. The
main objective behind the preparation of the management accounting is to provide the
management, stakeholders with the data which are related to the internal business so that they
can easily align their curiosity with the process of the organisation in order to increase their
working efficiency. The special objective behind the preparation of this writing is to provide data
to the internal stakeholders of the arrangement about the relation and functioning of the internal
departments for better decision making. The report is prepared on the consulting firm that is
Boston consulting which is engaged in resolution of the problems faced by their client is that
Speedboard. For the report, the chosen association is Speedboard Assemble Service which is
well known for it manufacturing at the medium scale.This report covers the various form of the
management accounting system along with their benefits to the business. Apart from this, the
study also focuses on the different costing methods and different tools and techniques for
controlling of the budget so that financial status of the business can be improved.
TASK 1
P1: Management accounting and its various management accounting systems.
Management accounting is coined as the procedure of presenting the accounting as well
as economic data which will assist the business in evaluating their performance of the
management, their strategies to compete with the competitors, budgeting and forecasting.
According to the American accounting association,'' management accounting is the concept
which plays a significant role in planning business activities, policies and strategies so that the
goal of the firms can be attained(Otley, 2016). There are number of accounting management
system that support the business in carrying their operations out in the best way. Below
mentioned are the types of the management accounting systems:
Cost Accounting System: This aspect of the management accounting system is mainly
concerned with the frame work which helps in estimating the cost of the product or services,
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valuation of the stock, profitability analysing for the business so that the vision of the association
can be earned in the best possible manner. Other than this, cost accounting also supports the
business by determining their profits margin as well as ascertaining all the cost either be it fixed
or variable so that the overall productivity of the business can be enhanced. In context of the
company like Speedboard, this system of accounting will provide the manager of the business in
the information regarding how much cost is going to be incurred or how much has incurred in
the process of manufacturing so that all the unnecessary costs can be controlled and maximum
profit can be obtained in trenchant manner. Furthermore this will enable the manager of the
business in comparing their actual performance level to the standard which have been
benchmarked so that the company can determine where they are lacking and how to match that
level of benchmark so that the business of Speedboard can sustain in the market for a longer
period of time(Soin and Collier, 2013).
Price optimisation system : This management accounting system is the core component
which supports the association in determining that how the taste and preferences of the
customers varies at the different level of the prices. This is utilized by the business in controlling
the costs of the items, assets and so on. The matter of the Speedboard Can concentrate on the
utilization of value improvement in their business for choosing the estimating structure of the
products which the clients are prepared to pay. This will likewise empower the business in
distinguishing the responses of the clients towards the various degrees of the costs. speed board
Can use this in their business through sorting out the reviews for collecting the data so as to
contrast it with the expense of activity, inventories and costs of the items which were set
beforehand. This strategy includes the count which are of complex nature for which the
methodology of the price optimisation has been found by the organizations concerning full fill
their needs of business to clients or some other organization manufacturing items in the mass. It
will likewise bolster the business in considering every one of the variables, for example, product
life cycle, competitors pricing strategies so the business can without much of a stretch recognize
what cost of the item should be kept inside the association.
Inventory management system : This system of accounting is considered to be the core
in the firm as it deals within the management of the stock level. This system helps the
organisation in determining how much inventory to manufacture and hold and how much to sale
in the market. The business of Speedboard will focus on this management system as this will
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lead their business to a situation of the growth and development(Contrafatto and Burns, 2013).
This will also enable the management of the Speedboard in allocating their stock at different
places and areas which have been formed for the activity of the production. The business of
Speedboard will also be benefited by the adoption of this system in their organisation as this will
allow them to identify the stock that is needed at they present of time , setting of the quarry and
will also helps them in controlling the task that is associated with the resource management in
regard to maintain the stock in the business. To calculate the cost of the inventory there are
different ways which can be implemented by the business such as LIFO, FIFO and AVCO. In
Current time the organisations have adopted the method of EOQ in order to identify the time
period of preparing a reorder in regard to carry their operations smoothly(Merchant, 2012).
Job costing system- These are the management accounting system which are mainly
preferred by the companies which are into the business of manufacturing a products. This is the
accounting system which is mainly concerned with the allotment of the job to each individual.
This is generally used by the manager of the business to trash the cost and the income which
have been earned through the particular job. Additionally this will also support in identifying the
amount of profit which can be obtained through the effective performance of the job. The same
will be utilised by the business of the Speedboard in determining the cost and revenues that is
incurred through the manufacturing. This will also support the business in tracking the expenses
and cost so that the necessary steps can be taken to enhance the profit margin.
P2: Justify various method of management accounting reporting.
Management accounting reports are those which provides the business with more reliable
and accurate data so that the business can come up with the best decision for the organisations.
These reports are prepared to know in depth about the financial and statistical data of the
association. Preparation of these reports in the business will also allow the association in
forecasting about the future financial position of the business. These reports are as follows:
Budgeting report : These reports are those which prepared by the organisation in order
to see their overall business performance during the financial year. This report helps the business
in contrasting their actual performance with the targeted standards so that all the errors which are
causing deviation can be corrected within the time frame. The business of Speedboard will also
be benefited with the preparation of this report as this will support the business to know the
reason of deviation which arises in the level of the performance and will also assist the business
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in overcoming those deviation so that the exact financial position of the business can be
determined(Tappura and et. al., 2015).
Inventory managerial report : These reports are formed by the business in order to
determine the level of stock that the business is holding. Preparation of the report within the
business is done in order to determine the demands and supply of the stock as per the
requirement which is made by the potential customers. This will also empower the business to
expand their profitability and productivity level. Formulation of this report will also support the
business of SpeedBoard in determining the stock level that is required to for manufacturing the
product so that all the unnecessary costs can be reduced and a control can be established on the
expenditure level of the business.
Account receivables report : This report is prepared on the periodic basis in order to
identify the all those debts and account receivables of the business which has been outstanding
from a long duration of time. This report is prepared by the business of Speedboard in regard to
determine that from how long the payment from the customers and debtor is overdue to the
business and also supports the association in establishing the proper credit policies so that the
organisation can easily overcome the problem of the due amount(Bromwich and Scapens, 2016).
Assessment of benefits of various management accounting systems:
The benefits which the management accounting system provides to the business are as follows:
Types of management
accounting system
Benefits Evaluation of these benefits
in context of the
organisation.
Inventory management
system
 The benefits which the
inventory management
system provides to the
business is that it
allows the business in
determining the level
of the stock to be
produced as per the
customers requirement
so that all the
 The business through
this advantage will lead
to the positive way of
doing operations as
through the business
can determine that how
much stock to be
produced and deliver
rather can producing in
bulk so that the cost can
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unnecessary cost which
are associated with the
production can be
reduced in a systematic
manner.
be controlled and profit
of the association can
be maximised.
Cost accounting system  This allows the
association of the
Speedboard in
estimating the cost
which is going to be
incurred and will also
support in estimating
the cost so that the
business operation can
be carried in the best
possible
manner(Boučková,
2015).
 This benefit of the cost
accounting system will
affect the busines in
positive manner as
through this the
association of the
Speedboard can easily
assess the amount of
the expenditure that the
firm is going to
incurred while
operating the
operations in the
business. This will also
enable the business in
comparing the
performance that is in
actual to the standard
set.
Price optimisation system The business of the
Speedborad will be benefited
from this accounting
management system as this
will assist the business in
reducing the cost which is not
 This will have great
impact on the business
as this will support the
business in setting
plans and strategies
related to the price of
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essential for the business so
that the profit margin of the
firm can be increased.
the items and will also
increase the customer
base of the business by
providing the clients
with better and
affordable pricing
strategy.
Integration of the management accounting system to the management accounting reports.
Type of reporting & Systems Integration with organisational process
Inventory management report: Both the
concept of inventory management system as
well as reports are interlinked to each other
as all the details data regarding the inventory
to prepare the inventory reports are rendered
with the help of inventory management
system.
This reports will enables the business in
identifying the purchase reorder level so that the
required stock of the raw material can be
maintained in order to produced and
manufacturing the products as per the demand of
the customers.
TASK 2
P3: Cost accounting techniques to prepare an income statement.
Cost : Cost is the amount that is being given up In order to get or buy something. It is
the monetary value that a company pays in order to receive something. It includes the monetary
assessment of the resources, material, time and utility consumed and all those opportunities
which have been given up in regard to produce the desired level of the products or services.
Various methods of costing related to this are marginal costing and absorption costing:
Marginal costing: marginal costing is the change in the total cost which has arise when
the quantity produced is increased by the additional one unit. This is also known as the cost of
producing one additional unit of goods and services. This is calculated within the business in
order to determine at what point of time the business can earn the economies of the
scale(Pavlatos and Kostakis, 2015).
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Absorption costing : This method of costing is concerned with the holding of all the
costs which are related to the manufacturing of goods and services. This costing method is the
only one which involves both the type of the cost is that fixed or variable. This is the most
suitable method of the costing that will be used by the business firms as it provides more reliable
and accurate data for the stock which is going to end.
Income statement
Cost Cards
November
Sales = 70* 10000 = £ 700000
Direct Materials = £100000
Direct Labour = £ 150000
Fixed Overheads = £ 250000
December
Sales = 70* 8000 = £ 560000
Direct Materials = £100000
Direct Labour = £ 150000
Fixed Overheads = £ 250000
Inventory = £ 2000 units
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