Management Accounting Report: System Essentials & Benefits, Wahaca

This report provides a detailed analysis of management accounting practices at Wahaca restaurant. It begins with an introduction to management accounting, emphasizing its role in providing financial and statistical information for managerial decision-making. The report covers essential requirements of different management accounting systems, including job costing, price optimization, cost management, and inventory management systems. It then explores various methods used in management accounting reports, such as budget reports, account receivable ageing reports, job cost reports, and performance reports. The evaluation of benefits of an accounting system, including increased efficiency, profitability, and simplified decision-making, is also discussed. Furthermore, the report evaluates accounting systems and reporting integration within organizational processes, focusing on job costing, cost reports, trend analyses, budget reports, price optimization, and performance reports. The report also includes an examination of marginal costing techniques used by the restaurant. The report highlights how Wahaca utilizes these systems to manage costs, optimize pricing, and improve overall business performance, providing insights into how these tools support sustainable success.

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
Essential requirements of different management accounting systems........................................1
Methods used in management accounting reports......................................................................3
Evaluation of benefits of an accounting system..........................................................................4
Evaluation of accounting systems and reporting in integration in organisational process.........5
TASK 2............................................................................................................................................5
TASK 3............................................................................................................................................7
The advantage and disadvantages of different types of planning tools used in budgetary
control.........................................................................................................................................7
Analyse the use of different planning tools and their application for preparing and forecasting
budgets........................................................................................................................................8
Tools used in accounting for solving problems for leading sustainable success........................8
TASK 4............................................................................................................................................9
Adapting management system in respond to future problems....................................................9
Tools for accounting responding on financial issues for sustainable success...........................10
CONCLUSION..............................................................................................................................10

INTRODUCTION
Management accounting is the process of preparing accounts and reports by providing
accurate financial and statistical information required by managers on making day to day
decisions. In this weekly and monthly reports are made by the department managers. The reports
are made on the basis of available cash, sales revenue, outstanding debts, raw material, inventory
etc(Abdelmoneim Mohamed and Jones, 2014). This report is based on Wahaca restaurant
founded on 2007 by Thomasina Miers. They are leading with Mexican-style street food. This
report is based on system essentials and benefits with reporting methods. It is made for
evaluating system with an integration. The uses of planning tools which are used for controlling
and for forecasting budgets in order to resolve financial problems for an achievement of
sustainable success. Their based a preparation of accounting systems by leading organisation for
success by solving appropriately.
TASK 1
Essential requirements of different management accounting systems
Management accounting is a process of analysing cost and operations in order to prepare
reports, records for achieving goals and objectives. They are leading by translating data or
information in useful form. Wahaca restaurant is preparing this records on day to day operations.
These analysis are prepared by creating and evaluating financial statements from external
sources. Their includes margins, constraints, capital budgeting, valuation and costing of products
by Wahaca Restaurant. The systems of accounting define by making decisions in identifying
different ways with a confidential use by managers. These are prepare by having information
such as budgeting, product cost analysis, break even charts, trend charts and forecasting. Their
are different accounting system are consider as under.
Job costing system: This system involves information of associated costs in production. The
data is required in order to make useful in determining company's estimation. Cost data is
determined for products and services of Wahaca restaurant for end results in production
processes(Ax and Greve, 2017). Here the estimation is made on the basis on customer
specifications and receipt of customer order. Their having different features are stated below.
 Here job differs from requirements of various types of materials, methods, skills and
treatment.
 This system is preparing separate cost sheet in order to certain cost and profit.

 Wahaca restaurant is establishing procedure for controlling and reducing costs in a
period of time.
 They are determining overhead recovery rates for absorbing overhead fully.
 Their provide complete value of work in progress in a prescribed time and duration.
 Wahaca using this system for controlling production.
Price Optimization: In this, demand varies with different price levels in form of combining data
of information of costs and level of prices for improving profits. Company is determining on
various prices and channels in responding to products and services(Bennett and James, 2017).
Wahaca restaurant is relating with the prices of customer segment by examining targets on
changing prices from demanding market. Organisation opt this system in order to make growth
and achievements by optimise prices on food products. Development of food is consider by
controlling level and improving customer satisfaction. For example: to make customer attraction
towards a restaurant, it is a vital form to make utilisation of resources. Their requirements are
consider below.
 They are considering by selecting solution via price planning and optimization.
 The requirement of optimization is used with the help of technology in making pricing
decision.
 Their used helps in reducing fears and barriers while making solutions.
 With the help of precise data it is helpful in using easily.
Cost management system: This system consists of formal methods in developing planning and
controlling by managing activities in either short term and long term. Their providing two
challenges for gaining profits in short-term and improving competition in long term(Fullerton,
Kennedy and Widener, 2014). For Wahaca restaurant uses it for managing core of competencies
for an exploit of opportunities and threats. They are linking with the plans and strategies in a
form for achieving organisational performance. Their need or requirements are consider as
under.
 It is vital for the growth of technology.
 Wahaca restaurant is running for domestic competition.
 They takes place in improving services and manufacturing sectors.
Inventory management system: It is an ongoing process used for movable goods. Their
includes placing new order of products and shipping their orders to customers. Here essential

goods are supply to customers by having daily operations. Their are many of the techniques in
evaluating turnover ratios and EOQ(Gibassierand Schaltegger, 2015). In making preparation the
methods opt are LIFO( Last in first out), weighteage average cost method and FIFO( Firstin first
out for evaluation) for analysing. Problems occur by Wahaca restaurant in this system by
replenishing rates in between overstock and stock-out. The needs and requirements of this
system are defined below.
 It is required by company's in manufacturing purpose of parts and components.
 Here services provide by Wahaca restaurant in order to maintain supplies by cleaning,
replacing parts and other different items of food for serving customers.
 Restaurant is using expenses in serving large number of customers.
 Their is an essential requirement of this system by tracking assets with bar codes, serial
number, RFID, wireless tracking etc.
Methods used in management accounting reports
It is a crucial part in making complete picture of business performance. This report is
produced in view of financing business. It is especially dealing with the owners of small
businesses. Wahaca restaurant is running strategically insights with the crucial development. It is
also known as management or cost accounting. Here many of the critical decision is depending
on reports which is carefully crafted by experts. Restaurant reports on daily basis prepared for
food with certain patterns and leading with converting it for a company(Jamil, 2015). Their are
four different budgets are explained as under.
Budget report: This report is managing fundamentally in order to help business owners by
understanding and controlling costs for an enterprise. It is unified with leading with several
departments by evaluating expenses. The estimations are made by Wahaca restaurant relating to
budgets for following year. Here company creates budget by understanding business scheme.
The listed company uses all source of earnings and expenditures. Restaurant tries to enhance
goals and objectives for staying in a budgeted amount. Here the circumstances might be arise due
to overseen of great plan.
Account receivable ageing reports: this report offers credit to consumers which is crucial for a
business of restaurant. Wahaca is overviewing its balances by making ageing group of
customers(Kaplan and Atkinson, 2015). This overview is measured by separating categories of
ageing groups for aligning policies. Here mentioned breaking down of balances of customers

into a specific period of time for finding issues in collection process. There are many defaulters
in restaurant with a complete transformation of policies of cash flows by operating business.
Company has bad debts which are needed to be written off.
Job cost report: in this, reports are provided by viewing total cost incurred during project
preparation by yielding expected revenues. Wahaca restaurant is evaluating profits by optimizing
operations by focusing on overall profits. The customers are focusing on making overall
profitable. Manager of restaurant is to make offer in summary of information required from
customers. The profits margin are estimated and monitor in a clear picture form of costs that
occur in production of articles. Customers of Wahaca restaurant preparing reports including
labour hours and overhead costs.
Performance reports: this report is base on the reviewing of performances as a whole of each
employee at the end of term. This performance are measured in departments. The execution of
work is made on the basis of reports of an accounting terms. Their is an insight of work
mentioned by Wahaca by certain happenings of reports towards flaws. It is vital role which every
organisation is measuring accurately towards their mission.
Evaluation of benefits of an accounting system
Their are various benefits used though an effective management system. They are
enhancing overall performance of company. Their benefits are described below.
Increasing efficiency: company opt improving performance operation in order to
increasing efficiency. Wahaca restaurant is contributing in striving by evaluating and comparing
of better performance(Lavia López and Hiebl, 2014). It is their in making various results which
is easily to be achieve. Restaurant is provided rewards to their employees in form of promotions.
This is helpful in making efficiency in the organisational context.
Increases the bar of profitability: Management accounting includes controlling and
capital of budgeting. Their operating vital operations by making extra expenses for uses easily. It
is profitable in increasing bar of profits for restaurant. This is a useful benefit opt by Wahaca by
reducing prices of products.
Simplifies in making decisions in financial statements: in this decisions and activities
are made in simplified form while preparing financial statements. Restaurant create detailed
technical report in order to make simpler interpretations. Here enables managing decisions with
the betterment of restaurant. The accountant is their in making statements with the key facts.

Enable fluctuations of business monetary fund: The company enables in controlling
functions in monetary fund with an essential factors. Accounting is made in details with the flow
of funds. Here is an emergency fund which is used in urgency when there is a need for an
organisation. Their is an essential source which h is eliminated by misusing of funds.
Flexibility and freedom: The reports are not required in preparing yearly, monthly or
weekly. It is used in terms of getting enough time in preparation of reports. Wahaca restaurant is
their in support with making flexibility report mentioned or prepared in monthly and yearly basis
with an organisational context.
Evaluation of accounting systems and reporting in integration in organisational process
The reports are prepared by using system approaches. Company used to provide reports
in order with the use of informations and data. Restaurant is maintaining cost records in order by
summarising company earnings(McLaney and Atrill, 2014). The accounting shows which is
useful in maintaining fluctuations occur in time by making profits and losses. Wahaca is leading
with liquid cash by net worth making with available resources.
Job costing system and cost reports: in preparing costing reports their incurred cost
during project. This report is measured by making cost estimation with the help of system. In
preparation of reports their mentioned revenues and capital with the formulation. Wahaca
restaurant is preparing reports relating with the costs incurred.
Trends analyses and budget report: Integration takes place in both terms by forward
looking on which decisions are made. It is focusing on forecast of sales and in preparation of
reports. The company uses trends by analysing for preparing budgets. From this analysis reports
generated for future sales in capital expenditure, profit planning, research and development by
opting reporting of budgets by using best method for financing.
Price optimisation and performance reports: The reports are made on the basis by
optimising prices of product. Performance reports mentioned various kinds transaction with
making optimisation on that pricing of products. Wahaca restaurant is preparing reports on the
basis of first integrating by making optimum utilisation of raw materials.

TASK 2
Marginal costing
It is a technique used by relating with variable and fixed costs in order to charged cost
units(Mokhtar, Jusoh and Zulkifli, 2016). This costing is against with the contribution and
written off in related to period. It lies in relation with variable and fixed cost.
Calculation of net profit by using marginal costing method
Particulars Amount
Sales revenue = ( No. of goods sold * selling price = 50 * 16000) 800000
Marginal Cost of goods sold: 560000
Production = ( Marginal cost per unit * Produced units= 35*18000) 630000
closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 2000) 70000
Contribution 240000
Fixed cost 100000
Net profit 140000
Interpretation: From this calculation, net profit 140000 is earned by marginal costing. Revenue,
contribution and fixed cost are incurred.
Absorption costing
It is applied on manufacturing costs which are en-wrapped on the units produced. It includes
finished goods including with inventory and direct materials, labour which are divided in
variable and fixed costs. As per end product generated absorption is refer as full costing.
Computation of net income by using absorption costing method
Particulars Amount
Sales = (Price of selling * no. of units sold = 16000 * 50) 800000
Cost of goods sold- 560000
Production = ( Marginal cost per unit * Produced units= 35*18000) 630000
closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 2000) 70000
Gross profit 240000
Less – under absorb fixed production cost 10000
Net profit/ operating income 230000

Interpretation: From this calculation the amount of which computation achieve net
profit 230000 in absorption costing.
b)The end of September actual production is made per unit is 19000 and closing stock is 3000.
Calculation of net profit by using marginal costing method
Particulars Amount
Sales revenue = ( No. of goods sold * selling price = 50 * 16000) 800000
Marginal Cost of goods sold: 560000
Production = ( Marginal cost per unit * Produced units= 35*19000) 665000
closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 3000) 105000
Contribution 240000
Fixed cost 100000
Net profit 140000
Interpretation: In calculation of net profit marginal costing is methods is prescribed
with the use of revenue and profits generated(MOUSAVI and Shakeri, 2014). From this, net
profit earned is 140000.
Computation of net income by using absorption costing method
Particulars Amount
Sales = (Price of selling * no. of units sold = 16000 * 50) 800000
Cost of goods sold- 560000
Production = ( Marginal cost per unit * Produced units= 35*19000) 665000
closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 3000) 105000
Gross profit 240000
Less – under absorb fixed production cost 5000
Net profit/ operating income 235000
Interpretation: By this calculation the budget is measure from marginal and absorption cost
from which profits and loss account make earnings. Profit from absorption costing is measured
as coming charge of 500.

TASK 3
The advantage and disadvantages of different types of planning tools used in budgetary control.
Budget is estimation of revenues and expenditures for specified period. Budgetory
control is the methods of preparing budgets and compared it with actual income and
expenditures(Pavlatos and Kostakis, 2015). Senior accountant of Wahaca restaurant use
budgetary control to control cost. Some different types of planning tools used by organisation are
mentioned below:
Forecasting tools:
Forecasting tools is used to determine the future trends of company. Wahaca restaurant
used this tools to forecast what is going to be happen in future so it helps them to grow business
effectively and efficiently.
Advantage: This tool is used to predict future fiscal information which helps company
make efficaciously decisions.
Disadvantage: This tool considered qualitative date which changes accordingly so future
can't be predict accurately.
Contingency tool:
It is a planning tools which is used to evaluate sudden changes occurred. Contingency
tools explain those factors which are helpful and effectual for humanistic(Schaltegger and
Burritt, 2017). Wahaca restaurant used this tool move various risk from performance.
Advantages: This tool reduce problems which are suddenly occur in marketplace. So, this
help to make plans according to risk and issues that may happen in future.
Disadvantages: In this tool, drawback occur on the causes of management in
overestimating of costs in budgetary slack. The slack occur when the differences in between
believing budget and on project report. The consideration is made on hopes in making budgets
easier.
Scenario tools:
Scenario planning tools are made for the purpose of future and on the transformation
occur in need for strategy. Wahaca restaurant is planning for corporate managers in analysing
with tools in making decisions while facing uncertainty. The idea of establishing behind thinking
for future aspects by making evaluated scenario regarding point to point.

Advantages: It helps in emerging designs and thinking. Their allows insights and
unlocking activity which is outside business approach(Zaleha Abdul Rasid, Ruhana Isa and
Khairuzzaman Wan Ismail, 2014).
Disadvantages: It not well known approach. They are not making scenario for making
profits. Their is and unlikely possibilities.
Analyse the use of different planning tools and their application for preparing and forecasting
budgets.
Planning tools are consider for controlling made by manager on budget. The tools are
refer to which a company is first identifying contingency used for controlling risks. Their use is
identify by costs and expenses occur. Scenario tools are measured on the enhancing activities
made on future risks. Forecasting is made on budget process in internal and external factors
according to future trends. For effective budget prepare by Wahaca restaurant using various
equipments by examining. By making specific planning by using these tools are helpful for
growing business opportunities. Wahaca restaurant is using this approach in for increasing
business of restaurant by reducing risks on food products.
Tools used in accounting for solving problems for leading sustainable success
Wahaca restaurant is facing lots of problem in accounting and financials. The errors made
in transactions of food items. The problems faced by company on day to day basis on enhancing
growth. Errors occur in tools of contingency in future risks(Mokhtar, Jusoh and Zulkifli, 2016).
Here tools issues are solved by enhancing activities by making accurate measurements in the
preparation. Restaurant is leading with many of the opportunities in growing business. The uses
of this approach is identified controlling risks occurred by manager of restaurant. Scenario
planning tools are measured for future basis in helping for business opportunities. This tool
prediction on such future trends in having sudden changes while conducting use of activities uses
KPI. These resolving is made on the basis of key performance indicators who solved many on
the problems during risks.
TASK 4
Adapting management system in respond to future problems
By preparing management accounting with having critical situations the problems simply
found in financial measurement. Wahaca restaurant is managing resources in time to time basis.

Their includes many of the issues including enhancements of customers towards food product,
reducing income, customer satisfaction by completing their needs and wants(Zaleha Abdul
Rasid, Ruhana Isa and Khairuzzaman Wan Ismail, 2014). Their are many of the tools made in
according to the issues to be resolved are consider as under.
KPI( Key performance indicator): It is a tool used for measuring value s by
establishing effectively business objectives. Wahaca restaurant is evaluating success in targets by
verifying in various groups. Indicators are defined in two levels first is relating to measure
overall performance of individuals and low level indicated by focusing in relating with various
departments. From this, restaurant makes an effective decisions in regarding with food products.
This is maintained by approach in identifying causes and errors for resolving. This reduction is
made by increasing performance of company.
Benchmarking: Wahaca restaurant is considering use of performance of food products,
their services provided and processes which are used. Their having use by identifying internally
with a possibility in making improvements. The objectives refer to company improvement,
analysing performance etc.
Comparison between Wahaca restaurant and Cafe Pacifico
Issues Wahaca Restaurant Cafe Pacifico Solution
Cash flow problems Problems is occurred
by company in
financial trouble with
negative impacts.
Here problems are
incurred by having too
much debt.
The issues are
resolved by decreasing
revenues and
increasing expenses.
Paying too much tax This company is
incurred by borrowing
to pay such bills.
Company spend less
with restrictions.
The issues will resolve
by dealing with new
aspects and making
investing activities in
new technology.
Declining profitability Company is using
wasteful activities and
resources.
Company opted poor
an in-updated
technology.
It is resolved by
identifying profitable
and non profitable
products.

Charities and non
profit organisation
There motive is to
believe in welfare by
charity.
They are leading with
facing economic
donations and not in
specific profit
generating.
Solutions are made in
regarding with this by
identifying problems
of nature, scale and
shape.
Key variables are identified by three basic techniques are sensitivity analysis, scenario
analysis and simulation.
Sensitivity Analysis: This technique is described by determining variables with an
impact dependent on assumptions with a defined analysis. Wahaca restaurant is depending on
one or more input variables in specific boundaries which effects came on changing rates.
Scenario analysis: This is dependent on future events with considerable possible
outcomes. This analysis is made by different forms like projection shows by exact picture.
Wahaca restaurant is using this analysis by extension making with past trends.
Simulation: This analysis is based on real world process which first requires model for
development. Here required key characteristics, behaviour and functions. Wahaca restaurant is
using for performance optimisation, testing, training, safety engineering etc.
Tools for accounting responding on financial issues for sustainable success
For conducting evaluation activities facing uncertainties in order to financial issues. The
system opt by company in order by conducting properly. The way in which maintaining
performance by constantly judging(McLaney and Atrill, 2014). Department of Wahaca
restaurant for having sustainable growth in market by practical division in human resource and
finance. The success is by having proper decision directly made by making reports in equipped
by analyses. In making reports of management accounting makes regular analysis made on
business activities. In management accounting the decisions are made on the basis on evaluating
needs on food products by customers.
CONCLUSION
From the above mention report accounting is measured by Wahaca restaurant has
improve its financial position by effective dealing with customers and employees. They are
providing analysis in order to make overall performance with having proper information in
costing technique prepare for budgets. The reports are concluded by maintaining and comparing

organisation and identifying by resolving problems and issues occur. It is not mandatory in
dealing by providing analysis for maintaining overall performance of company. Their analysis
are made in responding to the problems of management accounting is compile in sustaining
success.