Management Accounting

Solution

Introduction

This report is about management accounting systems that are used in the organisations for the management of business operations. It has been recorded that most of the leading accountancy firms are using promotional activities for promoting the products and services in the market. The main purpose of the utility of promotional activities is to retain the attention of the customers. In the report, a draft has been prepared for the leading accountancy firm in which the management accounting systems and its purposes are discussed in a detailed manner. In the report, the difference between management accounting and financing accounting has been analysed effectively. With the use of management accounting organisation would be able to present and provide accounting information so that the organisation would be able to perform itsmanagement operations effectively which will sustain long in the market. While, financial accounting is used by the company for the purpose of measuring the business activities, reports, communication results of the company.

Page 1 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing HND Business Assignment Brief RQF Unit 5 Management Accounting Unit Level 4 Unit Code H/508/0489 Term Start Date 16 th September 2019 Hand Out Date 16th September 2019 Submission Deadline 25th November 2019 , 11 :59am (Mid -Day) Lectures & Formative Assessments 10 Weeks Guided Learning Hours 60 Module Leader Dean Awoyejo Copyright © - All rights reserved - UK College of Business and Computing This document is the product and property of the UK College of Business and Computing and therefore may not be: shared with any external third party; reproduced in full or in part; or used in any other related manner whatsoever, without prior expressed written permission. This statement is for the attention of students, staff and external parties. In the case of copyright infringement, legal action will be exercised. Page 2 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing Assignment title Management Accounting report for Excite Entertainment Ltd Scenario 1 – (LO1) You have been working as An Intern at a leading Accountancy Firm. One of the clients called Excite Entertainment Ltd operates in leisure and entertainment industry in the UK. One of their major activities is the promotion of concerts and festivals at locations throughout the United Kingdom (UK). They are consulting your firm on writing a Reference Manual for their Management Accounting Department. Your Manager has asked that you prepa re the first draft of the Manual for the client under the following heading s: Section A: Title -Understanding Management Accounting Systems a. Differences between Management Accounting and Financial Accounting. b. Cost accounting systems (Direct Costs and Standard Costing) c. Inventory Management Systems d. Job Costing Systems e. Evaluate the benefits of the above management accounting systems to your client. Section B: Methods used for Management Accounting Reporting a. Describe d ifferent types of managerial acco unting reports b. Explain w hy information presented should be accurate, relevant to the user, reliable up to date and timely. c. Critically evaluate how management accounting systems and management accounting reporting shou ld be integrated within Excite Entertainment Ltd Operational processes. Scenario 2 – (LO2) Excite Entertainment Ltd is reviewing its Management Accounting Systems, especially how costs are allocated. The company has been allocating overhead costs arbitrarily but is considering using either Absorption Costing or Marginal Costing Method to calculate the profitability of every operations with effect from September 2019. The following information is available from different cost centres of the organisation: Selling price per Unit £15 Prime Cost per unit £4 Variable Production costs per unit £2 Page 3 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing Budgeted fixed production overheads per month £40,000 Budgeted production per month 10,000 units Budgeted Sales per month 8,000 uni ts Opening inventory for September 500 units Required: Produce a financial report for the month of September 2019 comparing profit or loss using Marginal Costing and Absorption Costing techniques. Interpret the results and advi se management on your critical evaluation of the benefits and limitations of each method used referring to the results. Scenario 3 – (LO3) As a newly -qualified Management Accountant, you have been asked by your line manager to produce a report which analyses the organisation’s use of planning tools to ensure financial stability and performance as well as ways in which management accounting has played a key role in preventing and solving financial problems. This section is in the form of a two -part individual management report: Part A : Compare and contrast three planning tools used in management accounting, indicating how effective you judge each to be and why. Your judgements should be supported with evidence. (LO4) Part B : Us ing the information provided below, compare ways in which management accounting is applied in dealing with financial problems and preventing financial problems in an organisation. The following information is provided for the calculations of cost, volume and profit analysis: Estimated fixed costs £120,000.00 Variable costs per unit £10.00 Proposed selling price per unit £40.00 Additionally, the Finance Manager has indicated the estimated profit that can be generated from the above figures is not adequate for long term plans and therefore want to see profits increased to £90 ,000. Advi se the sales team how many units needs to be sold to attain this profit level, and management of any other measures that can be put in place for the team. Critical evaluation of assumptions made must be provided . Page 4 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing Assessment criteria Pass Merit Distinction LO1 Demonstrate an understanding of management accounting systems LO1 & 2 D1 Critically evaluate how Management accounting systems and Management Accounting Reporting is integrated within organisational process. P1 Explain management accounting and give the essential requirements of different types of management accounting systems. P2 Explain different methods used for management accounting reporting. M1 Evaluate the benefits of management accounting systems and their application within an organisation al context. LO2 Apply a range of management accounting techniques D2 Produce financial reports that accurately apply and interpret data for a range of business activities. P3 Calculate costs using appropriate techniques of cost analysis to prepare an income statement using marginal and absorption costs. M2 Accurately apply a range of management accounting techniques and produce appropriate financial reporting documents. LO3 Explain the use of planning tools used in management accounting LO3 & 4 D3 Evaluate how planning tools for accounting respond appropriately to solving financial problems to lead organisations to sustainable success. P4 Explain the advantages and disadvantages of different types of planning tools used for budgetary control M3 Analyse the use of different planning tools and their application for preparing and forecasting budgets. LO4 Compare ways in which organisations could use management accounting to respond to financial problems P5 Compare how organisations are adapting management accounting systems to respond to financial problems. M4 Analyse how, in responding to financial problems, management accounting can lead organisations to sustainable success. Page 5 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing Submitting your assignment You will submit your assignment to the appropriate submission link on Ulearn before midday on the submission date. The assignment should be in a word document and preferably using Arial font size 12 and 1.5 spacing. Your assignm ent should be uploaded on the Turnitin Assignment submission section. It is advisable to use the Turnitin Plagiarism checker before uploading the final piece of work. Academic Misconduct’ Statement: ‘Academic Misconduct’ is a term used to describe a deliberate attempt by a student to take unfair advantage over other students to undermine the quality, standards and credibility of the programmes and qualifications offer by UKCBC. Academic Misconduct includes: plagiarism; collusion; falsificat ion; replication; cheating; bribery; and impersonation. A student suspected of Academic Misconduct will be investigated by the College and appropriate action will be taken. ‘Contract Cheating’ Statement: ‘Contract Cheating’ is defined by the Quality Assurance Agency (QAA) as occurring when, “a third party completes work for a student who then submits it to an education provider as their own, where such input is not permitted.” Such third -party companies have become known as ‘essay mills’, and it is the responsibility of students to avoid contact and association with such third -party companies throughout their entire period of study. A student suspected of Contract Cheating will be investigated by the College and appropriate action will be taken . Page 6 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing Glossary of commonly used academic words Account for Give reasons for: explain why something happens. Analyse Examine something in very close detail and from a number of angles. Identify the important points and chief features and understand their relationships. Argue Present a case for and against a proposal or statement and present your own opinion at the end. Compare Show how two or more things are similar. Contrast Look at two or more things and draw out differences. State whether the differences are significant. Critically evaluate Weigh arguments for and against something, assess the strength of evidence on both sides. Define Give the exact meaning of. Describe Give a detailed account of the main features or characteristics ... Page 7 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing Discuss Write about the most important characteristics of something. Give arguments for and against, look at it from a variety of perspectives. Distinguish Identify the differences between two items. Evaluate Assess the worth or usefulness of something. Use evidence to support your opinion. Examine Look at something in detail. You may be expected to 'critically evaluate' it as well. Explain Make it clear why something happens or why it is the way it is. Identify Recognise name and briefly describe something. Illustrate Use examples to further explain or justify something. Could be visual or verbal. Interpret Explain the meaning or significance of information or data that you are presenting. Justify Provide evidence that supports an argument or idea. Outline Give only the main points, show only the main structure. Page 8 of 8 Issue 2: September 2019 Copyright © - All rights reserved - UK College of Business and Computing Prove Present evidence in a logical structure to support an argument for a point of view. Relate (Two meanings) 1. Show how ideas / theories/ events etc are linked or connected. 2. Tell a story. Explain something in a narrative fashion. Review Survey and comment on the key aspects of something or a range of things. State Give the main features clearly and simply. Summarise Draw out the main points, omitting detail and examples. To what extent… How far is something true or contributes to a final outcome. Also, how far is it not true? In academic writing the answer is usually somewhere in the middle. Trace Describe the development of something; follow the order of different stages in an event or process. Adapted from Cottrell. S.(2003) The Study Skills Handbook. Basingstoke. Palgrave.