Report on Management Accounting: Zylla Consulting Group Inc. Analysis

This report provides a comprehensive overview of management accounting, focusing on its application within Zylla Consulting Group Inc. It begins by defining management accounting and its importance in business decision-making, emphasizing its role in providing financial and non-financial information to managers. The report then delves into different types of management accounting, including price optimization, cost accounting, inventory management, and job costing systems. It further explores various methods of management accounting reporting, such as inventory control, accounts receivable/payable, performance, budget, and job cost reports. The report also covers the concepts of marginal and absorption costing within a firm and discusses the importance of income statements. Finally, it examines planning tools for budgetary control, comparing their advantages and disadvantages, and analyzes how management accounting systems respond to manage financial problems. The report provides a practical understanding of how management accounting supports financial stability and strategic decision-making.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Different kind of management accounting and its important use..........................................1
Task 2...............................................................................................................................................5
P3 Marginal and Absorption within a firm.................................................................................5
Task 3...............................................................................................................................................8
P4 Various planning tools with advantages and disadvantages which could be use for
budgetary control........................................................................................................................8
P5 Management accounting system response to manage financial problems...........................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting can be defined as profession which includes partnering in
management decision making, performance systems, providing expertise in financial reporting,
control to assess management in formulation, implementation of an organisation's satieties or
policies and devising planning (Armstrong, 2014). Simply, it may refers to provision of
economical and non-economical decision making information for managers. This can be
described as an important part of any business organisation which render support for carrying out
all processes or activities easily to attain growth and success. There are many types of financial
dealings which should be recorded on daily basis for future purpose. Management accountants
have task to look after all kind events that happen in business while considering needs of
organisation. This report is based on Zylla Consulting Group Inc. which deals in national
international deployment for installation and repair of Hughes satellite for government,
commercial as well as industrial customers. Various kind of management accounting and
essential use with several reporting systems will be discussed in given report. There are certain
advantages and disadvantages of various methods which can be included in management
accounting with caparison is also mentioned here.
Task 1
P1 Different kind of management accounting and its important use
From:- Management Accounting officer
To:- General Manager of company
Subject: Essential requirement of management accounting system into business
The term management accounting can be defined as procedure in which all of essential
activities, processes, functions or operations render support for managing and controlling such
components. It helps in assessing various kind of methods of business operations for
organisational perspective to improve productivity as well as profitability. Manager of
accounting in firms have task of getting correct accounting knowledge to report appropriate and
it may facilitate to achieve desired goal or objectives.
An organisation have various kind of important factors which after essential to be
carrying out for smooth running of business. Management accounting may refers to that process
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which helps in preparing and designing of various economical reports and accounts to get right
or appropriate statistical data. This will facilitates for manager to make correct decision for
conducting any type of activity for attaining long and short term goals easily. The financial
information of Zylla company will help to make decisions about investments and making
assumptions of outcomes received from that. By doing this, firm will become able to gather
information for operating its activities or functions to conduct more effectively as well as
efficiently. The record of accounting includes entries, ledgers, journals, budgets and so on
regarding organisational prospects. All these records will facilitate better implementation of
capital to generate appropriate outcomes to gain more profits or benefits for firm. This will
results in improvement of goodwill in market competition in front of clients to attract and retain
them. Moreover, all these records or information of accounting is crucial for organisation
managers which are able to make several ideas in respect of economical status of Zylla
company. This will helps in taking correct actions and allocate tasks or resources to right person
and right place for better investment of capital in organisation.
Regular analysis of accounting records is necessary because there may be huge burden
for managing financial information related to Zylla firm. It is essential due to large scale of
business operations effective way. This may occur on several business organisations which are
related to public as well as private sectors. There are various efficiencies bear by the firm that
needed to be maintained to carrying out appropriate techniques or methods. This will helps to
grab several opportunities for gaining profits and control challenges to reduce threats or issues.
It is clearly described in this assignment that the organisation have to analyse and record
various activities performed on daily basis. At the other hand, net profitability and growth can
majorly relies on achieving appropriate targets or outcomes for accounting systems.
Importance of management accounting Assist to gain group targets:- It is mandatory to arrange sequence of various factors
organised and assemble several resources for carrying out effective procedures of firm
to achieve targets and desired of an organisation more efficiently. The mangers can
allocate tasks or sources to perform more properly to attain better outcomes.
 Optimal usage of resources:- There are various kind of resources which are necessary
to implement in organisation for conducting several procedures. It is more important to
allocate them at right place and make optimum utilisation of them to gain maximum
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output form them. For doing this, it is essential to reduce wastage of resources in firm.
Types of accounting system Price optimisation system:- This system helps to make proper decisions which are
affiliated with cost of manufacturing and price of products to maintain balance between
capital and profitability of an organisation. Zylla company can make assumptions of set
prices to attain maximum profits. Cost accounting system:- It is important to evaluate and control the cost of operational
activities to make sure better profits of firm. This idea refers to reduce wastage of
resources to implement them at desired place of manufacturing to gain better
productivity. Inventory management system:- There are various kind of non-capitalised assets and
stocks which are needed to be assess more effectively supervise them. The Zylla
company render appropriate record or knowledge about new products for their clients to
grab more market shares.
 Job costing system:- It is well known that company recruit and select several candidates
fir desired profiles or designation so that they will fulfil responsibilities of it properly.
The firm have to make sure that overhead cost obtain while manufacturing particular
product in bulk and it affects directly position of product.
Thanks
XYZ
P2 Different methods of management of accounting reporting
From: Management Accounting Officer
To: General Manager of Unicorn Grocery
Subject: Various methods use of management accounting reporting
Management accounting is essential for running of any successful business. For any
business making strategies and taking appropriate decision will help in maintaining financial
stability and position of business market place. Top level manager and senior authority are
responsible for taking appropriate decisions which help the organisation to enhance their
financial resource by increasing their productivity. For having higher profit and and growth in
business place it is biogenic for completing task at required time frame.
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Some of the accounting approaches and system are mentioned below:
Inventory Control Reporting: It is considered as very effectual tool for serving,
monitoring and checking of warehouses, inventory and stocks in an company. If it is not
managed properly organisation cannot audit and survey their productivity which will ultimately
decrease their efficiency in market in terms of productivity and revenue collection. This
reporting method will help Zylla to maintaining prospects of under stocks and overstocks.
Application – It turns out to be adequate method for Zylla. It helps they to check and survey
their stock anytime and make effective planning in managing and and regulation of stocks.
This also aids in minimising wastages and effective use of resources.
Account Receivable Reporting: This reporting method is used in controlling flow of
budget in terms of cash flow and fund flow. This gives the detailed analysis of budgetary
control considering selling practices and receiving of revenue. This also includes detailed report
of transaction activity which includes customers details, time of delivery , type of consignment,
inventory cost and supply chain management . This properly regulates monitory flow as well s
minimise consequences.
Application – This method is beneficial for Zylla to manages their trading practices, calculation
of revenue and keeping record of their transactions.
Account Payable Reporting: It is diametric of receivable reporting system which gives
details about the money which is left to be paid by customers. This helps in making planning in
future business structure and increasing trading and build better relationship between them. It
turns out to be productive as it will, increase their brand image and popularity in market place.
Application- it is very valuable prospect which aid in making strong relationship between a
customer and organisation. Company must focus on increasing availability to every customers
which in different places.
Performance Reporting: It is termed as an crucial aspect for any business organisation.
It used for evaluating performances by examining and monitoring employees capability. This
activity will allow them to have a better survey of potential hence ensure increase in
productivity. Zylla uses this concept to achieve prescribe objectives and goals in effectual
manner. This will make position strong among their competitors in term of financial capability
Application – This is suitable practice which will be productive for the type of business practice
followed by organisation. It is used to analyse performances of employees and make plans for
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getting core competence in business environment.
Budget Reporting: This activity focus on budgetary system of a organisation and helps
in collecting more revenue for the company. This method is also called as expensive
performances where actual cost of company is compared with budgeting which helps in finding
out unnecessary costs, occurrence costs in adequate manner. This technique also helps in
distribution of funds for various activities for effective use of human resources and minimising
wastes and increase higher rate of return for the company.
Application- Company can use their money in funding different activities in an organisation by
appropriate analysis of different aspect, it also used to plan better to increase productivity in
business environment. These activities will increase in demand of their product aid in better
utilisation of resources.
Job cost report : This reporting is used for identification of expenses, cost, profitability
and productivity for every concern job. They can evaluated costing by observing scenario for
earning aspects which will allow a company to implement new and innovative ideas in business
strategy. This will also evaluate cost of projects which will reduce cost hence make the work
profitable and increase productivity.
Application- Analysis of different jobs profile will help in calculating budgets and manpower
required for budgets for an project.
Thanks
XYZ
Task 2
P3 Marginal and Absorption within a firm.
For managing a company it is essential to produce a proper income statement in
accounting system for supporting and management of financial position of an organisation in
market place (Bovens, Goodin and Schillemans, 2014). This includes proper handling of
financial data and documentation for making better decisions and strategies in financial planning.
It is an important aspect for an small organisation like Zylla. The company usually use different
tools for management of their expenses revenues, operating and non operating activities,
business coerces etc. Management of these component will aid in smooth running of the
organisation.
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There are several methodologies which aid in calculation of costs. They are as follows :
Absorption cost: It is about administrating and selling expenses which are essential for an
organisation (Cooper, Ezzamel and Qu, 2017). It also help in making income statements by
observing cash flow and find flow in an organisation. Some other factors like material, money,
fixed and variable cost, labour and other expenses are used for calculation of operating cost in an
organisation. This aids in achieving costing and management idea which improves productivity
by by decreasing expenses and minimising wastes. This method is far more better than
traditional method as other miscellaneous activities can be observed.
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:
Amount
Sales value (35*600) 21000
less:
Cost of Production 9600
Gross Profit 11400
LESS:
Fixed and variable cost:
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Amount
variable sales overheads (600*1) 600
Admin & selling cost (700+600) 1300
Less: over absorbed fixed production overheads -100 -1800
Net profit 9600
This income statement signifies that total sales is 21000 out of which company gross
profit is 11400 which articulate after the deduction of 9600. Moreover, the net profit of
Absorption costing is 9600 which evaluated after including each and every single expenses. It is
essential to include each and every variable or cost of factor while analysing absorption costing
so that appropriate and suitable net profit as well as gross profit get determine.
Marginal costing: It is a change in opportunity cost which arise when the quantity
increase by one unit (Eldenburg and et. al., 2016). Marginal costing define as major differences
which could be carried down in a business when each and every single production activity lead
to take place. Thus, inventory is valued at the variable production cost only. In this technique,
value of inventory usually lower than absorption costing as many expenses are already deducted
from it. Zylla need to analyse marginal costing in an appropriate and suitable manner so that
business lead to analyse their net profit as well as gross profit properly through which better and
appropriate decision and judgement lead to carried down.
Income statement as per marginal costing:
Amount
Sales value (35*600) 21000
less:
Cost of Production (6+5+2) -9100
closing stock (100*13) -1300
variable overheads -7800
Contribution 13200
less:
variable sales overheads (600*1) -600
fixed cost -2000
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Admin & selling cost (700+600) -1300
-3900
Total 9300
This income statement of Zylla company stated that variable overheads of a company is
in negative frame. But their sales value is 21000. business managers need to analyse net profit
for a company by deducting all major expenses into it. It is essential to analyse and interpret all
such values properly so that better and suitable working get promoted. Thus, the net profit or
income statement from marginal costing signified value is 9300 which lower than the profit of
absorption costing.
Although, marginal costing and absorption costing both are differ from each other
(Fullerton, Kennedy and Widener, 2014). It is important to estimates and determine major
differentiation between marginal costing and absorption costing properly so that better and
appropriate decisions lead to carried down. Below is a difference between marginal costing and
absorption costing:
Absorption costing Marginal costing
In this aspect, each and every cost consider as
single cost rather than focus on different
values.
This consideration include only direct cost of
production rather than indirect cost like
absorption costing.
In variable costing only some number of values
are underpin but absorption costing includes
each and every single variable which increases
its overall operational cost.
Cost of manufacturing is not so high as
compared to absorption costing due to
involvement of direct cost only.
Valuation of closing stock is higher in
absorption costing technique.
Value of inventory is lower than the absorption
costing methodology.
Task 3
P4 Various planning tools with advantages and disadvantages which could be use for budgetary
control
For every business it is important to plan each and every consent properly and effectively
(Hiebl, 2014). Budgetary control is an essential factor in which actual income get compared with
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spending one so that a basic comparison leads to get drawn that projects getting implement in an
appropriate and suitable manner or not. Thus, in case of deficiency or loss, suitable modifications
in plan lead to get frame so that better and appropriate judgement could be manage in order to
generate profit.
In this aspect, budgetary control followed which consider as one of a most appropriate
and beneficial tool through which profit get align so that chances of loss could minimise as well
as uncertainties could be deal out effectively (Kihn and Ihantola, 2015). Zylla have to frame
appropriate budgetary control on each and every activity of business through which suitable
profit rate could be maintain in order to generate appropriate aspects. There are various
advantages and drawbacks are articulated with each and every project and terminology which
need to evaluate properly so that suitable strategies get drawn to manage every consent. The
drawbacks and benefits of budgetary control are define as below which need to consider by
Zyalla properly for better and suitable gains:
Advantages of budgetary control Drawbacks of budgetary control
All targets get define properly which enables in
operate things properly. Zyalla have to
concentrate on each and every activity properly
so that all resources get utilise properly.
Completely based on time frame which
enhance option of uncertainty. Thus, it define
as one of a major issue or problem. Zylla have
to underpin this section properly so that such
limitation could be manage in a suitable
manner.
Every division become able to facilitate things
properly with optimum definition of aims and
targets through which better and appropriate
target accomplishment become possible.
All things are based on assumptions regarding
each and every department. Thus, Zylla could
be face this sort of issue while working on
budgetary control process.
All work could be done with support of
centralisation working so that suitable
coordination get maintain as well as target get
accomplish.
Uncertain situation of business are harmful and
impose negative consideration on each and
every business operations.
Support in working on each and every issue
and problem effectively so that better and
This technique is expensive in nature which
increase chances of inappropriate and
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appropriate work and target accomplishment
become possible in frame.
ineffective working.
These all are the major advantages and drawbacks which faces by Zylla and need to
included in their working when they implement budgetary control section into working. As they
need to define each and every target properly on timely basis so that chances of deviation and
differences could be reduce. Budget need to get control by managers so that chances of unusual
situation could be minimise as well as efficiency get maximise (Lavia López and Hiebl, 2014).
This enables in accomplishment of each and every target properly so that better and suitable
gains could be manage and maintain. Various budget techniques for Zylla define as follow
which could be underpin in an appropriate and suitable manner: Cash budget: This budget define inflow and outflow of each cash related activity which
taking place during a specific period of time (Messner, 2016). It is important to manage
and maintain sufficient cash balance while working and managing any organisation so
that immediate responses could be maintain as well as uncertainties get manage. Business
managers have to maintain sufficient amount of consideration in their banks so that all
expenses get underpin effectively when an association need to seek finance properly. One
of a major advantage of using cash budget is to avoid shortage of fund at such course of
time when association facing so much deficiencies.
 Capital expenditure budget: One of a major thing for business and organisations are
capital. It is essential to maintain sufficient capital in hand by an association so that better
and suitable working get promoted (Otley, 2016). Capital expenditure budget basically
concern for all capital related expenses which use by a company in order to maintain
physical assets properly and effectively. It is important to manage and maintain sufficient
amount of capital expenditure so that chances of better and absolute gain could be
maximise. In this aspect, financial consideration get analyse properly at the ending of
each and every financial year and allocate fund in order to used them properly.
P5 Management accounting system response to manage financial problems
Finance is basic and general need of each and every organisation. It is important to
manage and maintain sufficient finance into business operations so that effective and suitable
gain could be underpin (P. Tucker and D. Lowe, 2014). Management accounting system
generally use by many firms in order to maintain their regular records of each and every working
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activity so that long term and short term plan get manage in an absolute manner. Hence, on the
basis of each and every data, suitable actions lead to carried down in order to accomplish aims
and targets properly and effectively for better concerning of operations. It also support to manage
working operations so that financial issues and crises could be manage and maintain.
Hence, to manage each and every financial obstruction, managers or employer need to
underpin several techniques or options which stated as follow:
 Business managers have to take each and every information properly as well as compile
them properly. Although, management need to underpin such aspects properly and
maintain suitable conversation between various employees. This lead to support in order
to evaluate financial problem or issue effectively as well as better working get promoted.
 Data need to disseminate to all kind of stakeholders properly so that an active
participation of employees also get manage. Thus, through gathering information from
each and every individual chances of better and suitable gains get promoted in which all
information get align at one context whether it related with present, past or future.
 Management need to maintain trust between each and every individual properly as it
consider as ultimate reason to manage effectiveness and efficiency at workplace.
Although, all short term and long term aspects have to included in a project properly with
ethical consideration so that a trust get maintain between employer and all stakeholders.
Zylla is one of a consulting group whom provide workers to repair and work on satellites of
government and other related section of similar streamline as well. But from past few years, they
are facing some major financial crises which need to understand in a better and suitable manner.
Although, to manage such issues and problems properly, appropriate and suitable steps lead to
undertake in a beneficial manner so that such issues and problems could be maintain and manage
properly. In this consideration, several techniques in this context are articulated as follow: Key performance indicator: Managers need to evaluate all such factors and elements
which support an association to maintain its competitive nature at keen market area
(Quinn, 2014). Such essentials are helpful to manage business performance properly
which get done only by considering all indicators. Thus, chances to deal with financial
issues and problems become possible by considering all KPI so that effectiveness and
efficiency could be maintain and manage properly.
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 Budget targeting: It is important to frame suitable and appropriate budget targets for a
projects so that each and every objective need to underpin in an appropriate frame (Renz
and Herman, 2016). Budget targets have to accomplish in a definite manner so that
effectiveness and efficiency could be maintain and manage properly. Although, this
factor support in maximising business operations properly so that financial crises lead to
minimise.
These two are the basic approaches which could be use by Zylla so that financial crises could be
maintain and manage as well as effective and efficiency gain could be estimated. Below are the
two major reason behind business facing such kind of consent which stated as follow: Profit level: One of a major reason behind financial issue is profit level. From past few
months, company profit level is getting decline which made negative impact on business
and its operations. Henceforth, profit level need to maintain and manage effectively so
that association get sustain into market world.
 Service quality: Another major reason of financial crises is service quality which
directly made an impact on business profit level. Service quality are getting poor and bad
day after day which need to evaluate effectively so that better and suitable working and
target accomplishment become possible.
Thus, it is important for Zylla managers to evaluate such consents properly as well as minimise
chances of financial risk and issues properly so that suitable working and target accomplishment
become possible. Thus, a keen focus and consideration need to be drawn properly which reflect
and support in order to gain better outcome which further support to long term consideration.
CONCLUSION
The above mentioned report concluded that management accounting is necessary
function of of maintain all kind of record or data related to financial aspects. Previous records
helps in building profitable future of firms by identifying past threats and solve them. It may
provide information about employee performance so that managers can allocate various resource
or procedures as per expertise fields to generate better outcomes. Management accounting helps
in maintain the balance between capital invested and profits to be achieved by firm. It may
support in determination of economical issues which occurs at time of financial year.
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