Management Accounting Analysis and Reporting for Unicorn Retail Store

This report analyzes the financial performance of Unicorn Retail, focusing on management accounting principles and techniques. It begins by evaluating different management accounting systems, including cost accounting, activity management, investment management, internal audits, financial accounting, and taxation, and their benefits for the company. The report then examines various reporting methods such as inventory and production reports, job cost reports, accounts receivable aging reports, and budget reports. It also explores the benefits of management accounting systems, emphasizing cost reduction, cash flow management, and improved decision-making. Furthermore, the report critically examines the integration of management accounting reports and systems, highlighting their impact on operational planning and strategic development. Finally, the report includes an income statement for Unicorn Retail using both marginal and absorption costing techniques, providing a comparative analysis of profitability under different costing methods.

UNIT 5 Management
Accounting

TABLE OF CONTENTS

INTRODUCTION
To have the favourable internal strength in terms of business operations as well as
economic condition management of all commercial transaction is necessary. Hence, with the
help of various accounting techniques business will be beneficial in having the better monitoring
and control over the usage of such financial tasks. In the present assessment there will be
discussion based on various costs, budgeting and reporting techniques which helps Unicorn retail
store in analysing business strength and the areas which are needed to be improved. Hence, there
will be calculations based on the various costing techniques such as marginal and absorption
which are relevant with the calculations for evaluating the income and expenses incurred in
producing the units. Further, there will be productive suggestions facilitated to the managers in
the business in context of making adequate efforts in the performances such as benchmarking,
key performance indicator as well as relevant techniques which helps them in motivating
workforce in the attaining such goals.
TASK 1
P1 Evaluation the types of management accounting systems for Unicorn retail store benefits
From: Management accounting Officer
Unicorn retail store
To: GM
Unicorn retail store
Subject: Requirements in implicating the various management accounting tools and techniques
Introduction:
Sir,
This to inform you that, Unicorn Store is consistently making favourable earning as well
as creating a unique brand image in the present rivalry environment where many giant retail
store businesses are existing. Hence, in terms of enhancing the operational performances of the
organisation there is need to adopt various cost control techniques, improvements in the
budgetary systems as well as enhancing work efficiency of the work force. Thus, in accordance
with various types of managements accounting systems which are needed for supporting the
business operations such as:
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Illustration 1: Types and Functions of management accounting system
(Source : Drake, Roulstone and Thornock, 2016)
§
Cost accounting/management: By monitoring the requirements of costs and finances
there is need to monitor the costs requirements in the organisation. Thus, there will be various
functional areas which require improvement by the professional in making adequate
requirements of the costs and finance for Unicorn Retail store. Thus, there will be various
costing techniques such as activity based costing which denotes the expenses incurred when
producing a unit pf product such as salary, remuneration, rewards, bonus over the employees or
labours as well as purchase of material, dealings with suppliers etc are the main operational
areas which required high pricing or costing.
Activity management: This functional area in Unicorn retail store monitors the overall
activities performed by managers or employees in organisation. Hence, there will be various
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kinds of operational tasks which need regular monitoring such as production and purchase of
goods and services. However, with the help of regular execution managers can monitor the
workforce as well as motivate them to make efforts in giving the quality performances. Thus,
with the help of these kinds of assessment the supervisor can monitor the usage of resources in
producing output as well as they can make decisions to lower down the wastage.
Investment management: In order to manage the obtained funds from owner's equity
and the shareholders' investment the responsibility,Unicorn retail store can utilise such funds in
an adequate manner as well as consider the real outputs they have due to such investments
(Agrawal and Cooper, 2017). On the other side, if the firm is making investments in new
operational activities as well as planning to make expansion than they must monitor the actual
requirements of such funds.
Internal Audit:Regularly monitoring the business transaction on the basis of periodical
audit which must be organised twice or thrice in a year will help Unicorn Store to make the
better analysis over the revenue and expenditures of them. Hence, there may be requirements of
various managers, auditors and accounting professionals in performing such tasks (Campbell,
and et.al. 2014). It could be said such techniques will help professionals in making adequate
decisions to carry-on any task or stop investing in non profitable business operations.
Financial accounting:Management accounting is the part of financial accounting
systems. Hence, it can be said that if the internal power of an organisation is better and strong
than the firm be able to meet the external requirements (Henderson and et.al., 2017). Hence,
with the help of management accounting tools there will be increase in performance and
efficiency of firm as well as it will help in improving the productivity of business and
motivating workforce to make the valuable efforts in the context with attaining the objectives.
Taxation:There has been various operational activities that took place during the year
such revenue gathering and spending. Hence, this is the responsibilities of the organisation in
filing the regular tax returns as well as keep up to date with the changing policies and
procedures in such activities (Collier, 2015). Thus, for Unicorn store there will be dealings
related with various products and service and in context with that they all have different tax
rates which are legislated by local or central government in UK. Hence, it will be necessary for
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the accounting managers to make analysis of all the tax charges has been paid by them as well
as monitor such transactions.
Moreover, there has been use of various management accounting techniques such as:
Job costing: This method enables professionals at Unicorn retail store in order to make
records of all the transactions. Moreover, it ascertains the costs incurred in each business
activities mainly production costs such as labour, material and overheads. On the there side, the
records of such transactions will be helpful in analysing funds requirements.
Inventory management: These are the records of all the inventory transactions which
were based on level or demand in market as well as production made by the firm. Thus, unicorn
retail store needed to have records of all the products which were imported and exported from
the store. The data sheet must consists of time, date, quantity, product type and prices over it.
Thus, such records enable the managerial professionals in advanced decision making.
Price Optimisation: This is the most fruitful technique as it ascertains the consumer
reaction over the different prices at various locations. Moreover, such method is based on
observation over the buyers reaction and demonstrating the profitable rates over products. Thus,
to set the prices on goods Unicorn Retailers will be assistive in terms of implicating such
techniques.
P2 Analysing method of management accounting reporting for Unicorn retail store
From: Management accounting Officer
Unicorn retail store
To: GM
Unicorn retail store
Subject: Requirements of implementing various reporting systems
Introduction:
Sir,
In consideration with the various functional performances of the Unicorn Store it can be
said that there are requirements of having regular reporting from all the departments in business
which in turn helpful for business in utilising the effective efforts in business operations such
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as:
Illustration 2: Kinds of various accounting reports
(Source: Hopper and Bui, 2016)
Inventory and Production Reports: Accounting professionals need to record all the
transaction which are relevant to the production and import of raw materials. Hence, it will be
beneficial for Unicorn Retail store to execute the actual requirement of the funds in the
operational activities of the business. It will be fruitful for managing the resources as well as
reducing the wastage. On the other side in context with the requirements and demands in the
stores regarding products and services that there is need to have proper storage of such goods.
Thus, these reports contains all the relevant information related with the quality or goods and
their prices as well as the nature such as perishable or non perishable. Hence, these tasks needs
the recruitment of the qualified inspection teams who look for such requirements of products as
well as record all the transactions of entity.
Job Cost Report: These reports are prepared on the basis of analysing the job or
performance made during the period as well as the utilisation of costs for such operational
activities. Hence, these techniques helps in recording all the transactions which are held to make
the affective business activities. Thus, there will be expenses which are relevant with the
Accounts Receivable Aging Report: There will be various debtors of the organisation
which are increasing the debts in the company's accounts. Hence, these techniques helps the
firm in measuring the short term and long term debts that are to be monitored by the
professionals as well as make the effective solution which in turn helps in gaining the payments
for such debts. Hence, it can be said that these reports benefits Unicorn Store in making the
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adequate records of all the relevant receivables such as distributors, suppliers and various
operational units.
Budget Report: These techniques belongs to the record of the transaction which are to
be made within the decided limits as well as gathering the adequate amount of profit for making
the long term investments in the future. Hence, this technique benefits managers in monitoring
all the operational budgets such as cash, sale, purchase etc. which in turn helps the firm in
making expenditure in the relevant time period.
M1 Benefits and implication of the management accounting systems
In accordance with the various benefits of the management accounting systems which are
helpful in attaining the business objectives. Hence, there can be various usefulness of such
activities which helps entities in gathering favourable amount of revenue (The Advantages of
Management Accounting, 2017). It mainly helps in improving the cash flows of the firm such as
monitoring the inflows and outflows as well as suggesting managers in making fruitful efforts for
to solve such relevant obstacles. It has several advantages such as:
 Helps in reducing the costs and expenses incurred in any tasks or organisational
operations.
 Beneficial in maintaining the cash flow of firm as well as increases the profitability.
 Helps in adequate decision making as well as solutions for overcoming and financial
issue.
 It helps firm in having adequate amount or return which will be based on the investment
made by Unicorn store.
 It can be a favourable technique which contains all the internal informations such as costs
of operations, labour force, material requirements etc. which will help in making the
adequate analysis of fund requirements.
D1 Critically examining the integration of management accounting reports and systems
By considering the management accounting systems there will be influence of various
tools such as cash management, inventory management as well as budgeted controls. Hence, in
te reporting techniques there has been influences of various reporting techniques which in turn
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used to prepare reports of such activities which held in the business. Hence, it can be said that
Unicorn Retail store must focus over measuring the transaction and presenting reports over the
same. Thus, it will be beneficial for professionals to make the necessary changes in such
activities as well as it also improves the work efficiency of employees towards achieving the
business aims.
To meet the targets of the organisation there is need to have better operational planning
and strategic development which will be helpful for the entity in context with performance
improvements and capital stability. The reporting technique will be beneficial for the firm in
terms of allocating the funds in all the tasks and operations of business.
TASK 2
P3 Income statements for Unicorn retail store on different costing techniques
Marginal costing: These techniques helps in measuring the income and expense incurred
over the operational activities of business during assessments year. Hence, it considers the direct
expense such as material costs, labour costs as well as overhead expenses (Marginal and
absorption costing, 2017). Thus, the calculations for the Unicorn store's income statement on the
basis of Marginal Costing techniques such as:
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Interpretation: In accordance with the above listed table that reflects operational
activities of the Unicorn Retail Store which is in turn with analysis the various costs and gains of
the organisation. Hence, the sales revenue of the firm was 17500 on the rate of 35 per unit which
includes the cost of 7000 ate the rate of 13 per units. Hence, the closing inventory of the firm
which was remaining at the end of the year is 100 units valued at the rate of 13 per unit.
However, the gross profit margin/ contribution of the firm is 10500 which includes deduction of
Variable expenses and all the production costs from sales. Moreover, the further calculations for
net profit which indicates that variable overheads and fixed overheads must be reduced from
such contribution ad the final NP margin was at 7500 has been measured.
Absorption Costing: These techniques helps the individual in computing the adequate
costs incurred for such operations. Hence, the analysis will be based over computing the full
production costs which helps in adding the direct costs as well as proportionate of production
overheads (Agrawal and Cooper, 2017). Thus, the production costs will be computed over the
number of overhead rates. Hence, there will be income statement for Unicorn Retail store which
indicates the measurements for net profit.
Interpretation: In accordance with the table listed above which indicates the
calculations for Unicorn retail store with the help of using Absorption costing techniques. Hence,
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such techniques will be beneficial for in having the adequate amount of net profit. However, the
calculation begins from sale of 500 units at 35 selling price which brings the revenue of the
organisation form 17500 and then there will be deductions of cost, closing inventory and fixed
production overheads which brings the total contribution for 10800. After having such
contribution per unit all the expense will be deductible from the remaining amount which brings
the Net profit for 7800 respectively. This is the technique which considers all the costs such as
variable and fixed in measurements. Here the motive of implicating such technique is to analyse
the expenses in all departments which are meant to be financed. Therefore, in this case it is to be
suggested to the managers to implicate this technique as it reflect sufficient amount of net profit.
M2 Application of management accounting systems in producing the financial reports
From: Management accounting Officer
Unicorn retail store
To: GM
Unicorn retail store
Subject: Implementation of financial reports to cure with obstacles
Introduction:
Sir,
This is to inform you that, in order to have the adequate financial growth of Unicorn
Retail Store there is need to implementations reporting techniques which in turn helps the firm
in having better execution over such tasks. Hence, this can be possible with the use of several
reporting techniques such as:
 Operating report
 Cash flow budgets/report
 Sales budgets
 Purchase budgets
However, as per the measurements were made in absorption and marginal cost
statements it will be suggested to the professional to implicate such method in analysing the
expenses and revenue gathering of firm. There will be influence of various transactions which
will be profitable to the entity in terms of rising the capital collection.
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D2 Interpretation of accurately applicable financial report for Unicorn Retail store
The income statement of the Unicorn Store has been calculated with the help of two
difference costing techniques such as marginal and absorption. Hence, marginal concept brings
the end balance for 7500 which was the remaining net profit after deducting all the expenses
from the sales and revenue (Bennett and James, eds., 2017). While computing the net profit from
absorption techniques the net profit can be get by the operational managers such as 7800. Hence,
it can be said that in accordance with having the adequate profit there is need to implement the
Absorption costing techniques. The motive behind implicating the Absorption technique as it
will be helpful for the entity in terms of generating sufficient net profit which will have positive
impacts over business operations.
TASK 3
P4 Merits and demerits of different kinds of budgets and planning techniques
Purchase Budgets: It mainly consists of the amount of money that has been purchased by the
company during at the time financial year (Bennett and James, 2017). Estimated cost of raw
material which is fixed by the enterprise in order to fulfil the requirement clients in the future.
Advantages: It is considered as beneficial for the enterprise as it helps in planning the
business costs, coordinating expenses to meet requirement of asset and also to reduce the
controlling expenses.
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