Comprehensive Management Accounting Report for Swain & Jones

This report provides a comprehensive analysis of management accounting practices within Swain & Jones. It begins with an introduction to management accounting, highlighting its significance in guiding organizational decisions, especially within the context of globalization and increased market competition. The report discusses various management accounting systems, including lean, traditional, throughput, and transfer pricing, explaining their application and relevance to Swain & Jones. It emphasizes the importance of management accounting in financial planning, effective decision-making, performance analysis, cost reduction, and enhancing productivity and profitability. The report also covers different methods of management accounting, such as financial planning, financial statement analysis, standard costing, and budgetary control. It provides insights into how these methods can be applied to improve the financial health and operational efficiency of Swain & Jones. The report aims to provide a detailed overview of how management accounting techniques can be used to improve the performance of an organization and enhance its ability to make informed decisions.

MANAGEMENT ACCOUNTING

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INTRODUCTION
In this study, attempts has been made to illustrate on the various aspect of a management
accountant in Swain & Jones. Efforts have been made in the study to present a detailed
discussion in the form of a report. The report is to be presented to the General Manager of the
organization so that he is able to critically analyze the functions of the management accountant.
In order to provide a precise understanding about the research subject, an organization Swain &
Jones has been selected. This study primarily deals with various management accounting
techniques that are applied in an organization, the cost reporting system that is best suited for the
organization and show a relation between the traditional cost accounting system. In addition to
that, attempts have been made in the study to discuss on the factors that acts as drivers to the
management accounting process of an organization.
TASK 1
INTRODUCTION
It is evident that with the advent of globalization, the complexity in the business process
has tended to increase to a significant level. Subsequently, it has raised the level of competition
in the market. In these regards, organizations especially those catering to the manufacturing
sector faces several challenges in proper maintenance of records related to the production
process. This has necessitated organizations to adopt management accounting process. It not only
helps them, management of Swain & Jones in guiding at each step of the process but also
provide them with facts and evidences based on which, effective decisions are taken. In addition
to that, it enhances the level of efficiency of the management. In this part of the study, efforts
have been made to discuss on the various aspect of management accounting system to an
organization including its significance and importance.
P1 Management accounting system
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The management accounting process unlike the financial accounting system caters to the
internal control of an organization. It is a process of identification of Swain & Jones goals and
objectives, make a critical analysis of the same and communication about the findings to the
management such that they are able to make effective decision. Earliest this branch of
accounting was known as cost accounting method. Usually, it is seen that the management
accounting process tends to involve use of various information related to the cost implications
incurred internally by the organization. The information aids the managers to critically analyze
the key areas of Swain & Jones and accordingly formulate action plan for future operations of
the organization (Bodie, 2013).
Usually, it is noted that, the management accounting process are classified into four different
types. They include Lean accounting system, Traditional accounting system, Throughput
accounting system and Transfer pricing. The explanation of the various types of management
accounting system is given as follows:
 Lean accounting system: It is seen that this accounting method is used in lean
organization and forms an integral part of the managerial system. It helps the managers in
bringing out the full capacity as well as helps in maintaining a consistent level of
performance metrics within Swain & Jones. Usually, this form of accounting is used in
organizations in order to tackle many extreme situations that may include issues related
to market strategies or increasing cost implications in the production process. In context
to Swain & Jones, it can be stated that, this form of accounting is suited and may be
applied in accordance with the convenience of the management (Fullerton et al. 2014).
 Traditional accounting system: Traditional method of accounting or as popularly known
as the cost accounting system is one of the oldest form of accounting system. Notably,
this system of accounting catered to the internal cost incurred by an organization.
However, it is seen that this form of accounting was entirely based on assumptions and
sometimes gave wrong information to the management. In addition to that, it involved
allocation of the indirect cost although it does not reflect any changes in the consumption
of resources. In context to Swain & Jones, it is noted that, the management of the
organization tends to face certain difficulty in adapting to the new managerial system. In
this context, it can be said that the management of the organization may opt for
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traditional cost accounting methods in the initial phases in order to mitigate the identified
issues (DRURY, 2013).
 Throughput accounting system: Notably, this form, of accounting system is used by
organization in order to get a fuller utilization of the allocated resources and put them to
the organizational advantage. It is seen that, this form of accounting helps the
management to get precise information related to the organizational operational and its
corresponding performance. Subsequently, it helps the management to use the findings
and use them to make effective decisions regarding the future operation of the
organization. This form of accounting system is based upon the basic principles of
management accounting system and thus, can be applied to any organizational situations.
In context to Swain & Jones, it can be apprehended that, in case of any organizational
issues, the management may at their own discretion adopt this form of accounting in
order to mitigate them (Cohen et al. 2017).
 Transfer pricing: This form of accounting mainly caters to the taxation aspect of an
organization. In addition to that, a single owner or entity can apply this form of
accounting on organizations that are owned. It helps the management of the organization
to get a clear knowledge about the factors involved in the taxation process, identify any
key issues in the process and accordingly devise policies for rectification of the same. In
context to Swain & Jones, this system of accounting can be applied in order to effectively
deal with the prevalent taxation system within Swain & Jones (Cooper et al. 2017).
Significance of Management accounting system:
 Proper estimation and enhancement of the cash flow system: It is noted that the
management accounting process tends to effectively administer the cash balance of the
organization. In addition to that, it helps the management of the organization to ensure
that a standard level of liquidity is maintained within the organization for setting the
organizational operations (Bebbington et al. 2014). It helps the managers in preparation
of budget and thereby, get a precise estimation of the cash requirements and the
corresponding cash generation of the organization. Subsequently, it helps the managers in
proper allocation of the organizational resources, monitoring the usage of cash in various
activities, identifying any deviations and accordingly in formulation of policies in order
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to avoid any future contingencies of Swain & Jones. Hence, it helps the management of
the organization in effective cash management (Zhou, 2017).
 Helps in making effective managerial decisions: One of the primary aspect of the
management accounting system is that it aids the managers of the organization in making
effective decisions. Usually, it is seen that, unlike financial accounting system,
management accounting system tends to include both qualitative as well as quantitative
aspect and thereby aids the managers in effective and efficient decision-making in Swain
& Jones. It is seen that, the managers of an organization tends to use information that are
based on certain assumptions and there lies a probability of taking wrong decisions. The
management accounting system acts as a bridge in mitigating such gaps and thereby
helps in effective decisions (Bouten and Hoozée, 2013).
 Analysis of the overall performance of the organization: the management accounting
process helps the managers of the organization to identify any kinds of downturn or
shortcomings in the organizational operations and helps to formulate control measures for
mitigating the same. It is evident to hate the management accounting process caters to the
internal operations of Swain & Jones . It helps in proper identification of the issues or any
kind of deviations related to the organizational operations, monitor the allocation of the
organizational resources and accordingly devise control measures for mitigation of the
identified issues. It helps in enhancing the efficiency of the organization and thereby, its
performance in the market (Bouten and Hoozée, 2013).
 Reduction of the cost implications related to the organisational operations: Another major
function of the management accounting system is effective management of the cost
implications. It helps the management of the organization to efficiently monitor the
overall costs implications as well as put control measures in case of excess expenses
(Cohen et al. 2017). Additionally, it helps the management to get a precise estimation of
the costs to be incurred for various activities of Swain & Jones, identify the potential
sources to procure the financial resources and accordingly devise strategies. In addition to
that, the management accounting process helps the managers to make forecasts about
future contingencies and take necessary control measures in order to mitigate them.
Moreover, it helps in effective cash management related to the production process
(Bouten and Hoozée, 2013).
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 Enhancing the productivity as well as the profitability of the organization: It is seen that
management accounting process if applied to an organization facilitates the managers
with several benefits of Swain & Jones. They include reductions in the internal cost
implications, effective decision making, enhancing efficiency in cash flow and thereby, in
enhancing the productivity of the organization. It helps the managers to get a clear
understanding of the market factors and subsequently identify the requisites to deliver
quality returns. In addition to that, it helps the management of the organization to identify
the strategies adopted by the competitors in the market, analyzed their performance and
thereby take decisions for future operations of the organization (Cooper et al. 2017).
Subsequently, it helps the management of the organization to effectively manage the
operations, monitor the level of sales and production and accordingly boosts the
profitability of the organization. In addition to that, it is noted that, the management
accounting process helps to identify the degree of profitability in various business
projects and thereby, make effective investing decisions. In regards to this, it can be
apprehended that the management accounting process helps an organization to get a
competitive edge in the market and in enhancing the level of profitability as well.
Moreover, this process acts as a tool for the management of Swain & Jones to measure
the overall performance, identify any key issues, critically analyze them as well as
formulate policies in order to mitigate. It acts as effective instrument for the management
to enhance the performance metrics of the organization and accordingly increase the level
of profitability (Zhou, 2017).
Different methods of management accounting system and its application in Swain & Jones:
The various methods of management accounting system are listed as below:
 Financial Planning: Usually, it is noted that financial planning by the management tends
to include various activities like identification of the sources of finances, estimating the
financial requisites of Swain & Jones, etc. It helps the management of the organization to
set both short-term as well as long-term organizational goals and objectives (Cohen et al.
2017).
 Analysis of the financial statements of Swain & Jones: The management accounting
system helps the managers in critical analysis of the financial report of van organization.
It provides the managers with an insight into the financial stability of the organization,
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the different costs implications involved and the net earnings of the organization. It helps
to make a comparative analysis with that of the competitor in the market (Bodie, 2013).
 Standard costing: the standard costing method is one of the effective management
accounting system that helps in making a comparative analysis between the actual output
with that of the budgeted figures of Swain & Jones. It helps the management to identify
any kind of deviation from the estimated budget, analyse or evaluate the key areas that
need improvement and accordingly devise strategies in order to control the deviations. It
helps the management to analyze the variances and take relevant measures for the same
(Zhou, 2017).
 Budgetary control:
This is been utilized as a part of request to controller diverse sort of costs that are acquired by the
business association, particularly the Swain & Jones. The different exercises are checked and
controlled so as to dispose of any sort of wastage of the assets of the association and along these
lines the expenses are kept up in such a request, with the goal that the organization can acquire
consistent measure of benefits.
 Marginal costing:
Marginal costing are done in order to gain the analytical results of the accounting valuations. It is
done in order to gain the overall financial information of the firm’s activities and performances
of Swain & Jones. Marginal costing method consists of break even analysis that contains the
financial breakdowns of the year (Van, 2011).
 Decision making process:
The process is essential in order to gain different marketing strategies and plans in order to gain
the market revenues through financial activities (Scapens and Bromwich, 2010).
 Communication of information:
Communication skills are required to develop the financial activities of a firm. As the practices
and requirements of the essential elements of activities are gathered through communications.
Thus, the marketing and financial activities can be smoother and effective with better
communication and information processes in Swain & Jones.
 Graphical and statistical representation:
Management accounting helps in the development of different facts and understanding of the
information that are accessible within the workmanship hands. This assists the association to see
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any essential information and make distinctive sort of strides in light of such sort of data (Renz,
2016).
Conclusion:
This piece of the investigation has been done in view of the terms of clarification of
administration bookkeeping and giving the fundamental necessities of various sorts of
administration bookkeeping framework. Further, this part has additionally managed the
significance of administration Accounting and clarification of various techniques utilized for
administration bookkeeping detailing in Swain & Jones. Distinctive ideas identified with the part
of administration bookkeeping has been perceived and clarified in this investigation. Further, the
centrality and diverse sort of utilized of administration bookkeeping in various sort of business
association have likewise been distinguished and clarified in different parts of this examination.
TASK 2
Introduction:
The study is mainly based on the assumptions and calculations that are required. The
accomplishment of the study depends on the calculations and analysis of the evaluation along
with the impact on the financial activated of Swain & Jones. It is also to be stated the
calculations are done based on financial figures that are researched and the calculation of costing
methods are done according to the given information. In this, the study costing methods are to be
applied in order to accomplish the calculation tasks. Absorption costing and Marginal costing are
to be used in the study. The study also requires the further extension of the calculation results ads
the researcher have to analyse and identify the deviations and other factors for costing
valuations.
P 3 Calculation Absorption costing method for income statement of Swain & Jones:
Particulars Details Details Amount
revenue 500*35 17500
Less: Cost of goods sold 600*16 9600
Closing stock 100*16 (1600) (8000)
Cost of Production 9500
Fixed Administrative cost 800
Fixed selling cost 400
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Variable cost of overheads 500
1700
Net profit 7800
Marginal Costing method for Swain & Jones:
Explanation of two management accounting techniques:
According to the cost calculations tables it is observed that the marginal costing and
absorption costing methods are different regarding to the calculation methods. The cost
overheads are valued at a different method in the convulsions and are also allocated differently.
The calculations also demonstrates that the Absorption costing methods are mainly based on the
fixed cost that are incurred by the firm during the accounting year. Whereas the Marginal costing
methods accounts the variable costs that are incurred by the firm during the accounting year. The
profit calculations are also affected by the change in methods of Swain & Jones. As the tables
shows that the firm has generated an increased amount of profit when the Absorption Costing
method is applied. However, the firm was unable to generate an increased amount of profit after
using the Marginal Costing method, the amount of profit that was generated by the firm during
the accounting year had reduced. The calculations show that the Marginal Costing method had
generated £ 7500 however the absorption costing method had generated £ 7800 as profit
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margins. The marginal costing method was done considering the contribution margins of the
firm. The differences between the costing methods can be observed by the observation of value
donations among the methods of calculations (Pipan and Czarniawska, 2010). While, on account
of the ingestion costing strategies, one might say that the gross edge is utilized while making the
estimation under assimilation costing system. In peripheral costing strategy, the overhead
expenses are accused of the predetermined day and age while, if there should arise an occurrence
of assimilation costing, the overheads are charged as conceded costs and they are charged a short
time later or charged a short time later on a yearly premise. Therefore, there are many purposes
of distinction between the systems of peripheral costing and ingestion costing which has been
expounded, clarified and related with the research (Parker, 2012).
Conclusion:
The study consists of several calculations according to the requirements as it can be
observed that the firm had obtained Managerial Costing methods and Absorption costing method
in order to calculate their cost valuations regarding to their production activities during the year.
It is also observed that the firm had generated different margins of profit after applying the
costing methods. As per the absorption costing method the firm had increased the net profit
during the year, however the firm had suffered losses during the implications of managerial
costing methods of Swain & Jones. These observations have been defended by uncovering the
contrasts amongst marginal and absorption costing systems. Promote different purposes of
contrasts between the two-administration bookkeeping systems have additionally been
expounded in this piece of the examination.
TASK 3
Introduction:
In this study the detailed observation and analysis of the accounting talks are to be done
in order to accomplish the study requirements. It is to be stated that the advantages and
disadvantages of the accounting tools are to be analysed. The implications and effects of the
accounting tools are to discussed along with the section or aspects in which they are applied in
order to gain financial stability of Swain & Jones. The boundaries of the applications of the
accounting tools are a part of this a study as the study is to be done in order to gain information
regarding the accounting tools limitations and loopholes.
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P4 planning tools used in management accounting and their overall advantages and
disadvantages:
The accounting tools are basically used in order to accomplish several financial or organisational
purposes.
The purposes for using accounting tools are discussed below-
1. Net profit margin calculation:
The accounting tools are utilized in order to compute the net benefit of an association. This is
been done keeping in mind the end goal to discover and assess over the general execution made
by the business association of Swain & Jones.
2. Strategic planning:
In order to establish strategic planning for the organisational activities it is important to utilise
the accounting tools.
3. Variance analysis:
The accounting tools are beneficial in conducting the financial performances of Swain & Jones.
The financial performances of the organisations demonstrate the organisational standards in the
international market. The variances analyses are considered in the calculation process (Nixon and
Burns, 2012).
Advantages of utilizing arranging instruments in Management accounting-
 It helps to expand the productivity of the organization by taking up different examination
works. It is done along with providing the organization with various sort of critical and
applicable data.
 Provides adaptability to the working staffs as the reports in the administration
bookkeeping don't need to be set up on any settled time premise, for example, week after
week, month to month or every year. They can be set up at the time chose by the
organization (Nandan, 2010).
Disadvantages of utilizing arranging apparatuses in Management accounting-
 Not much adaptable for presentation of changes as the entire field of administration
bookkeeping is much backward (Van Helden et al. 2010).
 Records are kept up on a manual; premise. So there remain odds of blunders and
distinctive sort of errors and loss of information of the records.
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In addition to this, there are several other tools which can be used by the Swain & Jones for
planning purpose such as:
Cash budget: Such budgeting tool contains information regarding cash inflow and
outflow pertaining to the specified time frame. By preparing cash budget, Swain & Jones can
assess their cash position and would become able to assess how much money it needs to raise
from different sources.
Advantages:
 Assists management in concentrating on highly significant matters
 Helps in co-ordinating the activities of all the departments
 Enables management to formulate competent and effective plan which contr
Disadvantages:
 Cash budget is built on subjective estimates which in turn limits its significance
 Takes longer time to achieve goals
 Affects employee productivity when it is unrealistic in nature
Zero base budgeting (ZBB): Swain & Jones can set appropriate financial plan by taking
into account zero base budgeting tool. Moreover, under ZBB, manager allocates financial
resources by evaluating or assessing each possible way of doing activities. This technique of
financial planning is highly significant because it focuses on analyzing need and cost of every
function.
Advantages:
 Facilitates efficient allocation of financial resources
 Decline in unproductive and redundant business activities
 Helps in setting accurate plan by relooking each and every aspect
Disadvantages:
 Time-consuming activity
 Demand for high manpower Business unit has to organize training for managers in relation to developing ability
pertaining to explain every line of item.
Variance analysis: It is the process which helps in assessing the extent to which business
unit has met goals and objectives. Considering deviations and relative causes business
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organization would become able to set competent financial plan or framework for the near
future.
Advantages:
 Helps in controlling performance
 Gives indication in relation to taking suitable measure on time for performance
improvement Assists in assigning responsibility
Disadvantages:
 High deviations negatively impacts employee motivation
 Time consuming exercise
P5 Comparing ways of management accounting to respond to financial problems:
Associations can make the best possible utilization of Management accounting in order to
identify and rectify various sort of issues. Management accounting helps in perceiving the
general execution of the organization and on such basis, the difference or the deviations can be
recognized, the reason can be dealt with because of which the organization has neglected to
perform in the required way (Macintosh and Quattrone, 2010). Further, on the premise of such
acknowledgement of deviations, Swain & Jones can make and strategic diverse sort of plans with
a specific end goal to acquire change its execution and increment its level of benefits. It is
likewise to keep up various sort of adaptability in association and accordingly, because of this
much innovative environment can be kept up in the general business association. If there should
exists an occurrence of fall in benefits of the organizations (Lukka and Modell, 2010). As
example, Swain & Jones and different associations, the administration body can acquire pertinent
data with the assistance of administration bookkeeping and on premise of such assembled data,
the whole of the administration body can make up various sort of strides keeping in mind the end
goal to illuminate out the issues and get a lift its general benefit level.
In addition to this, there are several other tools which can be used by the business unit for
coping up with monetary problems such as: Key performance indicators: Swain & Jones management team can deal with the
financial problems by setting down key performance indicators regarding sales, profit
margin etc. Hence, evaluating performance in against to the KPI’s business unit would
become able to assess the areas for improvement.
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 Benchmarking: In the recent times, for making optimum use of financial resources
companies prefer to set benchmarks in relation to income, expenses etc. Hence, setting
standards regarding financial aspects and comparing actual performance in against to this
Swain & Jones can assess deviations. Hence, by taking corrective actions within the
suitable time on the basis of deviations assessed business unit can improve performance
in monetary terms. However, on the critical note it can be presented that high or
unrealistic standards may result into more deviations. This in turn negatively impacts
employee morale and motivation.
 Balance scorecard: Swain & Jones can deal with financial problems prominently by
employing the tool of balance scorecard. The rationale behind this, balance scorecard tool
offers opportunity in relation to measuring and evaluating performance from mainly four
perspectives such as monetary, customers, internal process, learning & growth. Hence,
through evaluating performance on the basis of such elements Swain & Jones would
become able to assess the areas for improvement.
Conclusion:
The aspects of the entire task has been done in view of some investigation and
examination with respect to different parts of administration bookkeeping. Here, clarification of
the utilization of arranging devices utilized as a part of administration bookkeeping and their
general points of interest and weaknesses has been considered and expounded so as to go ahead
with the examination in a productive way. Further, this piece of the examination or this
assignment has given the chances to bear on through the demonstration of contrasting routes in
which associations could utilize administration bookkeeping to react to money related issues.
Along these lines, one might say that all aspects of the examination have been conveyed in an
exhaustive way.
CONCLUSION
On the basis of above study, it can be said that there are various operational challenges
which in turn will be effective and helpful as to meet the financial requirements as well as
manage the internal system, of the business. The report comprises with all the management
accounting tools and techniques as well as reporting methods which will be better for internal
information. It has been suggested to the managers of Swain & Jones as to make necessary
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changes into operational activities such as reducing costs in operations which will improve their
financial health. The implication of budgetary and planing tool will be indicative as to have the
appropriate development of the work.
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REFERENCE
Books and Journals
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