Management Accounting Tools & Techniques for Merlin PLC Decisions

This report examines the significance of management accounting information (MAI) in the travel and tourism industry, highlighting its role in planning, monitoring, and future projections, particularly within Merlin PLC. It identifies various cost classification methods (by nature, function, variability, etc.) and their application in pricing services and determining shareholder dividends. The report emphasizes the importance of financial statements for variance analysis, assessing company position, and guiding investment decisions. It also discusses standard costing for comparing actual and standard costs in production. The document references several sources to support its analysis of strategic information management and financial decision-making.

Finance & Funding
Task 2

2.1
Management accounting is the spinal cord of every organization
which becomes the basis of undertaking several decisions. It is of
utmost importance as the entrepreneur is able to ascertain and
monitor the profits and operations of the firm. Likewise in the
travel and tourism industry, essence of management accounting
information (MAI) can be seen. It provides the users with
various data's that can be used in planning, monitoring and
making future projections (Ismail and King, 2014). There are
several tools and techniques that can be used to make strategic as
well as operational decisions of Merlin PLC. For this purpose the
following mechanisms can be adopted by the firm:

Classification of cost:
• By nature: These include material cost, labour cost and
expenses.
• By functions: Several cost such as production, selling,
distribution, administration, research, development, pre-
production, conversion and product cost.
• By identifiable: Direct and indirect cost of the firms are
included in it.
• By variability: fixed, variable, semi variable and step cost are
included in it.
• By controllability: Controllable and Uncontrollable cost.
• By normality: Normal and abnormal cost of the firm.

2.2
The above illustrated tools and techniques can be successfully
used by the Merlin entertainment PLC in order to make various
decisions. The cost can be used to evaluate and make decisions
regarding the pricing of its services. Likewise, the revenue
information will aid in determining the substantial dividend that
is to be paid to the shareholders. Moreover, the profit can be used
to make varied investment decisions for the firm. The same have
been discussed beneath:

Decision Making
• Forecasting
• Current trends
• Investment Decision
• Raising Capital
• Services
• Profitability
• Meeting Budgets and Objectives

Importance of financial
statements:
• Variance analysis: It is a method used to ascertain a difference between two
figure that is the actual expenditure and budgeted expenditure, accordingly, the
supervisors can formulate various strategies to achieve the goals and targets of
said enterprise by managing its expenses, revenue and inventory cost. If the
actual expenditure is more than the budgeted then the company shall make
efforts and decisions to reduce the same.
• Financial statement: It assist in ascertaining the company's position in the
respective industry and also provides and overview of the profitability of the
concern. It comprises of formation of balance sheet, cash flow and profit and
loss statement of Merlin PLC. It aids in making several decisions regarding
new investment, cost management, lending and corporate governance. If the
profits are low then the company shall reduce its expenditures and start saving
the amount. Moreover, the liquidity of the firm can be maintained by reducing
the amount of expense
• Standard Costing information: This methods is important in comparing and
analysing the standard cost with the actual cost and aids in making decisions in
the area of production.

Thank You!!

References
• Galliers, R. D. and Leidner, D. E., 2014. Strategic information
management: challenges and strategies in managing information
systems. Routledge.
• Hanna, R. W., 2014. The adoption of performance funding in higher
education: A combination of public policy, finance and politics.
• Inderst, G., 2013. Private infrastructure finance and investment in
Europe.
• Ismail, N. A. and King, M., 2014. Factors influencing the alignment of
accounting information systems in small and medium sized Malaysian
manufacturing firms. Journal of Information Systems and Small
Business. 1(1-2). pp.1-20.
• Kaplan, R. S. and Atkinson, A. A., 2015. Advanced management
accounting. PHI Learning.
• Kroenke, D. M. and Boyle, R. J., 2015. Using Mis. Prentice Hall Press.