Management Accounting: Analysis and Reporting for Unicorn Grocery

This report provides a comprehensive analysis of management accounting practices within the context of Unicorn Grocery, a co-operative grocery store located in Chorlton-cum-Hardy, Manchester, England. The report begins with an introduction to management accounting, emphasizing its importance in business operations, planning, and control, and then delves into various types of management accounting and their significance in achieving organizational goals. Task 1 explores different types of management accounting and the reporting systems used, focusing on the importance of accurate financial data for decision-making. Task 2 examines costing methods and their role in evaluating profitability, with a critical analysis of income statements. Task 3 focuses on planning methods, outlining their advantages and limitations. The report concludes with a comparison to another company regarding financial problems. The report also covers the advantages of management accounting and the benefits of effective reporting systems. The report uses different sources for analysing operating expenses that includes production budgets, sales budgets and many more.

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various types of management accounting and its importance use........................................1
P2 Different reporting systems used in management accounting...............................................3
M1 Benefits of management accounting.....................................................................................5
D1 Critical analysis of reporting system.....................................................................................6
TASK 2............................................................................................................................................6
P3 Evaluate costing methods determined in management accounting.......................................6
M2 Analysing accounting methods.............................................................................................8
D2 Critically examine the income statements.............................................................................8
TASK 3............................................................................................................................................9
P4 Advantages and limitations of planing methods....................................................................9
M3 Analysis of planning techniques.........................................................................................11
TASK 4..........................................................................................................................................12
P5 Comparison with another company's about financial problems..........................................12
M4 Evaluate some financial problems......................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Management is that procedure by which each business operation that can be managed in
proper manner. This is related to accounting and various other factors. Management accounting
is one of the essential part of any business enterprise which is smoothly run by small or large
organisation in effective way. This will assist firm for gaining suitable future development and
make sustainability in the forthcoming time period. Generally, it is that method which give
correct accounting information in order to perform different activities that includes motivating,
organising, planning and controlling functions within an enterprise. There are several financial
dealings that are recorded on daily basis which required a system that can record these for
making effective format (Macintosh and Quattrone, 2010). The project is based on unicorn
grocery which is co-operative grocery store and it is situated in Choriton-cum-Hardy,
Manchester, England. Various factors of accounting reporting and costing techniques are used
for the major motive of evaluating profitability of the firm which is described. This report also
covers different advantages and disadvantage for using planning methods that are linked with
budgetary control.
TASK 1
P1 Various types of management accounting and its importance use
Management accounting look at that event which provides effective business operations
and functions while considering the major businesses. With the help of this, specific data and
information should be emerged. This refers to analyse and examine entire business operations
and various other functions for use of internal for maximise the productivity and efficiency of an
organisation. As accounting manager use that provision for maintaining accounting information
for inform better towards reaching with desired goals and objectives in proper manner.
Management accounting is the process of making and preparing different financial
accounting systems and reports which can provide correct and accurate financial or statistical
data that are needed by company manager for making effective decisions (Otley and Emmanuel,
2013). It assist manager for gaining long and short term targets and major goals for better
improvement. This will also take accurate information about any kind of accounting which
enables Unicorn firm for operating in more efficient manner in regular activities. It gives
essential information to the company in order to take top position in the large market area. This
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includes some data regarding ledgers, entries and budgets in proper way. Such things are taken
into consideration while developing financial statements. This is also known as primary factor of
making accurate accounting system which can guide their managers and give required data for
determining total sales volume, account payables and receivable etc. The need of accountancy
for such information while evaluating the performance so that important decision making should
be done in proper manner (Parker, 2012). For investors, such information of accounting are
essential so they are capable for making effective ideas regarding financial position of unicorn
firm and take necessary steps.
This can affect the profitability, if the correct data or information does not described in
proper manner. With the assistance of effective accounting system, these issues mainly
associated with making new plans and policies and try to resolve such factors in easy manner.
The major problem should be find out in fast time so this will get bad impact on company
productivity and profitability. It can be occurs for every business enterprise so it is related to
private and public in nature.
The efficiency of unicorn company should be increase at one cost which is used for
perfect method that can provide them great opportunities of getting growth. On the other hand,
decision making can be made for keeping future for particular side. In the mentioned firm they
required for having system which are more effective in analysing and examining each transaction
that are performed by the company. Also the net growth and profitability can provide correct
result that are gathered for using accounting system.
Significance of management accounting:
 Assist in gaining group goals- The use of appropriate accounting system, it manages the
production factors, organised and assembling the resources for gaining desired targets
and goals.
 Optimal usage of resources- These are physical and human resources which are used for
production process can be utilised in better manner for gaining best possible outcome at
reasonable price (Van der Stede, 2011).
Types of accounting systems:
An accounting system enables a business to keep track of all financial activities like
expenses, invoices, findings, etc. that help accounting experts to deliver well informed decisions.
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Records can be maintained both manually or in computerized manner. Various types of
accounting systems are as follows: Single entry system- This system uses basic approach and was used by small
organizations. As there are no journal entries made it result in errors, that are unnoticed
and frequent,. Double entry system- This is more precise, accurate and error-free system as every credit
has equal debit but is more complex to use (Vasile and Man, 2012). Manual system- Here role of accountant like making journal entries, filing tax forms,
preparing financial statements, doing calculations are all made into use which makes this
system more time consuming and error-prone. But is economic in nature as it prevents
cost of computers and hiring of accounting programmers.
 Computerized system- This system requires accounting expert that have specialization in
management of accounting software and applications as here computer programs are used
for financial activities. Modifications can be quickly implemented and result in more
customized business solution.
While selecting an accounting system, business needs and available features must be
properly analysed.
P2 Different reporting systems used in management accounting
The management reporting is a systematic procedure of interpreting information for
respective stages of administration so they can change in analysing the potentiality of their
accountable centre in proper way. It can became correct base for taking right actions, required
effective for an organisation.
Professional and development accounting practices is play essential role for making
growth in the business. Accounting management differ from financial accounting so this can
develop report for unicorn firms internal stakeholders against to external stakeholders (Ward,
2012). In an enterprise, it is important for managers for doing work to attain positive results for
the firm. Another is growth and profitability is the primary part of such accounting managers. By
using this, they make organised reporting system which used for recording and maintaining the
daily transactions. This will be useful for accounting manager is take appropriate decision for the
welfare of the company. Such report can be made by getting all information which are required
from every departments such as human resource, finance, marketing, operations etc. the whole
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information or data is transfer into correct business statements in proper manner. The investors
of Unicorn firm is used for analysing and examining all such reports for making appropriate
decision for the betterment of the organisation.
The future growth and stableness mainly relies on such statements that is make by using
different data or information from each section. It has been shown that data gathered for making
actual report with the help of financial and non-financial sources in effective manner. This is
necessary for unicorn company is to evaluating each accounting data for getting positive
outcome (Albelda, 2011). So correct data should be collected from different financial details
after analysing actual performance of firm by the assistance of stakeholders. There are several
statements are used by company such as balance sheet, income statements and cash flow
statements. They mainly used to make investment plans for analysing situations.
The main motive of firm is to get large amount of return by their investment within the
company project department. Also report is essential for enhancing growth and opportunities for
gaining maximum profit. This is linked with different activities and maintain transaction by
unicorn company at the time of accounting year. On the other side, appropriate strategy can be
develop in that manner which increasing their reputation and make good image in front of large
number of customers. Some factors which help in gaining maximum benefits from various rivals
that are doing same type of businesses in the marketplace. It is show as it is one of the crucial
method for unicorn company where proper result can be created within the limited resources.
The main motive of these reporting system is to considers the current position for gaining
attention of large number of customers. Company targets is to achieve the long and short term
goals with the help of good reporting system.
Importance of reporting system: Role of controlling system- In this, unicorn can set their target goals in advance. It is the
major duty and responsibility of the company is pay attention towards employees works
and maintain their standards (Arroyo, 2012). This report can be designed for measuring
and examining actual performance while targetting budgetary system. Useful in business operations- Such report will indicates the right direction and path for
maintaining the business operations in proper manner. Administration can provides
different data or information so they can gain accurate profitability by their employees.
Types of reporting system:
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 Account receivable report- In this reporting, each information should be related with lists
of unpaid buyers and bills according to the mentioned date. The major aim of this method
is to analyse total payback time for outstanding obligation price. Performance reporting system- As per this system, financial statements can be analyse in
that way so it can present actual performance of the firm (Bennett, Schaltegger and
Zvezdov, 2013). By taking effective decisions which is used for gaining maximum
profitability and productivity and also its performance should be increasing at regular
basis. This includes analysing of accounting details of unicorn company and their
employees who work in an organisation. For taking correct information related to past
and current year data must be evaluated in proper manner. Job costing report- This is related with total cost which help in maintaining total
production unit manufactured at the same time. This involves information along with
materiality, expenses and labour are used. The main motive of using this strategy is to
recognise the total cost that occurs by firm for analyse the size of each products in better
manner. Inventory management report- This is necessary for reporting system that are used
managing and controlling stocks of an organisation. There are different techniques and
methods that should be affecting in performing such functions that includes inventory
turnover ratios, ABC costing and EOQ.
 Operating budgets- The report system is connected with cost of production that can
directly related with revenue and expenses of unicorn company. The main goal of using
these type of report for determining actual cost that are going to arising by firm while
manufacturing one units (Bodie, 2013). There are different sources for analysing
operating expenses that includes production budgets, sales budgets and many more.
M1 Benefits of management accounting
By increasing in profitability and efficiency of unicorn company, they are use
management accounting system. This assist them in recording daily transaction in better manner.
They can help in gaining high results or outcome. The main advantage of this company is to
increasing the employees performance.
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D1 Critical analysis of reporting system
In unicorn firm, each employees and department are perform their roles for reaching
common objectives and goals. The use of accounting reporting system can assist them in making
maximum profit and build positive image of the company (Boyns and Edwards, 2013). The main
aim of this is to determine organisation performance and each person who works in this.
TASK 2
P3 Evaluate costing methods determined in management accounting
Cost is called as that amount which occurs by firm for manufacturing goods and services
in effective manner. This is mainly identify valuation efforts, materials, resources, utility
consumed and risk factors for deliver the actual products for their customers. Costing is that
prediction of total costs that are connected with specific projects and ventures. It will consist of
variable amount that are known as variable costs which are defined to be cost or gain some
opportunities in making different activities. This can be main parts which is linked with direct or
indirect costing. Usually it is connected with that cost which can be analysed and examined the
financial terms that includes different resources are used by managers while delivery of goods to
their buyers. These cost are more effective at the time for taking accurate decisions and its main
motive is to make good future plans. There are certain costing techniques which is associated
with unicorn firm for determining actual profitability. Certain costing tools are as follows: Absorption costing- This cane be said that those cost which is directly connected with
production of effective goods and services in proper manner. It involves variable cost and
fixed cost at some time (DRURY, 2013). These type of techniques and methods is used
for measuring amount of production by taking correct decisions.
 Marginal costing- It defines as those cost which is ensures by firm along with production
of one extra costing unit. If company will charge higher rate other than marginal costing
of production units, so it effective for an organisation is to make desired goods and
services for its customers and also analyse their needs and wants in desired manner.
Comparison Absorption costing and Marginal costing
Absorption costing Marginal costing
In this costing, the cost create by unicorn
company can be analyse as total cost that is
In this, only marginal costs are valuable during
manufacturing procedure.
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used at the time manufacture.
The main advantage of using this is that per
unit cost can be decrease with extra units.
Share per units will not that much transformed
with excess units.
This is accompanying with organisation long
term designing and costing.
It is connected with short-term planning
developed by upper management.
This is not that much effective method used for
making decision.
Most of the administration uses this method for
taking precious determination for their
organisation.
Sustainability is depend on extrinsic feature of
reporting method.
It is connected with intrinsic reporting system
for forthcoming development and earnings.
Computation of Net profit by using absorption costing
Income statements
Particulars Amount
Sales 35*500 17500
Less:
Production cost 6+5+2+3 = 16*500
8000 8000
Gross profit 9500
Less:
Variable sales overhead 500*1 500
Selling and administrative cost expenses (800+400) 1200 -1700
Total Profit / Loss 7800
Calculation through marginal costing using
Income statements
Particulars Amount
Sales 35*500 17500
Less:
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Production cost 6+5+2 - 7800
Closing stock: 100*13 - 1300 -6500
Contribution 11000
Less:
Variable sales overhead 500*1 500
Fixed overhead -1800
Selling and administrative cost expenses (800+400) -1200 -3500
Total Profit / Loss 7500
M2 Analysing accounting methods
It has been analysed that perfect planning and organising is useful for an organisation.
Unicorn firm can generate maximum profits by using correct techniques and methods. This will
gain profitability for future time period.
D2 Critically examine the income statements
If company are using absorption costing profits generated is about 7800. So, with
marginal costing they are acquisition a profit of 7500. The difference of 300 is grow because of
fixed expenses which are not considered in marginal costing (Herzig and et. al. 2012). The whole
analysis is positive. For taking required decision company must select that alternative which is
more dependable.
TASK 3
P4 Advantages and limitations of planing methods
Budget- This is called as well organised detailed and planning all information for specific
time period towards firm business operations and functions. It can be consider the expenses and
cost where company can invest in order to make production of goods and services. This can be
termed as effective designing of business operations and planning relates to accounting for
particular gap. Usually, it should be prepared for more than one years but still this should be
followed if results or outcome are not in favour of an organisation.
Budgetary control- It is important method and techniques which directly affect the
management for carry out their business operations such as coordinating, planning and
evaluating all activities. It can be linked with different parts of the business which is mainly
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divided into several sections that are called as budget centre. Also it will provide managers good
and effective ideas for knowing how to make proper resources at lower rate.
Process of budgetary control: Refer with concern managers- This is necessary for company manager is to make
accurate analysing for taking data from each person in proper manner (Kotas, 2014).
They need any budgets for managing and maintaining their expenses and cost. This will
assist them in interacting and communicating better regarding gaining correct information
to unicorn company. Done effective prediction- After gathering feedbacks from concern company managers
they required to prepare assumption for protect from extra losses. The main motive of
budget planning is to control the future activities and functions. It consist different
expenses which incurred by firm. This is necessary for company is estimate and predict
all changes which create issues or problems within an organisation. Fixed organisational data for budget for gaining objectives- In this procedure, the
proper list of detailed data should be prepared by taking into accounting information that
is assembled from all department (Kotas, 2014). This will help company managers for
make correct planning according to the set standards. Calculating data along with budgeted- The performance of Unicorn company has been
measured by using expected information in order for comparing with budgetary system.
This will assist in predicting possible growth and success with desired resources. Also
they can gain attention of all desired customers and provide them specific goods and
services. Review analysis- It is the final stage of budgetary control process, company managers
analyse the above mentioned stages which are provide proper or right guidance. So it is
also important for managers is to analyse employees views and reviews regarding their
working system in effective manner. If everything perform good then it is transferred to
top management for other approval.
 Planning methods- In an enterprise, planning is that tool which help in managing
techniques that are related to analysing and examining various motives of firm for the
future time period and determination of mission. For achieving desired goals and
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objectives, company managers required for formulating plans and policies for
considering other planning tools (Lukka and Vinnari, 2014). These are as follows:
Forecasting methods- This tool is effective for managing and maintaining all business
operations in proper manner. The company need to analyse all desired goals and targets for
gaining attention of large number of customers. There are some particular assumption that can be
based on on administration attainment, effective judgements and knowledge or abilities of an
individual. This is also known as use of past data for determining the right direction of getting
correct results or outcomes. This tool is useful for unicorn for analysing whole market situations
in better manner.
Advantages:
It is necessary for company is to determining various goals and objectives that can be set
by manager. For this, they can also estimate the total cost and sales for improvement of company
profitability.
Disadvantage:
This does not make and create accurate prediction of company that will occurs by firm in
the future time period. This will directly affect on major targets if the cost of expenditure is
higher than actual cost.
Scenario methods- In this specific tools, company managers use this technique for easily
evaluating alternative options according to the requirements and need of different situations. This
help in financing, planning and operating management of unicorn firm. It can determine the
actual demand and needs which occur at the time of making specific plans and policies.
Advantages:
With the help of this, company managers can gain proper ideas and thoughts regarding
selection, implementation and opportunities in uncertain way.
Disadvantage:
This can not be correct and right for an organisation. This will take more time for making
accurate decisions to the betterment of the firm.
Contingency planning methods- This will define the planning methods and tools which
as been formulated or developed for communicating in effective manner while performing
critical situations. At the time of emerging a contingency planning, it consist for making analysis
in advance towards human resource administration and financial resources within an
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