conclusion for management accounting assignment

ESSAY SAUCE

FOR STUDENTS : ALL THE INGREDIENTS OF A GOOD ESSAY

Essay: Management accounting

Essay details and download:.

Subject area(s): Management essays
Reading time: 6 minutes
Price: Free download
Published: 9 March 2021*
File format: Text
Words: 1,711 (approx)
Number of pages: 7 (approx)

Text preview of this essay:

This page of the essay has 1,711 words. Download the full version above.

Management accounting is those areas of accounting concerned with financial planning, principally through the interpretation and use of financial data for important management of the business. The role of accounting is to provide relevant information, which will assist management with decision-making, planning economic performance, controlling costs and improving profitability. However, note that the information generated by the management accounting function is just one component part of the decision-making process. It is not the ‘be all and end all’; it must be used in conjunction with other data. The purpose of this essay is outline the objectives of and the main stages in, a managerial planning, decision making and control process and describe the role served by managerial accounting in this process.

The aim of management accounting is to provide management with information, which will help them to:

Achieve their objectives/goals.
Formulate policy.
Monitor and assess performance.
Appreciate the financial implications of changes in the internal and external environment in which the organization operates.
Plan for the future.
Make comparisons between alternative scenarios.
Manage more efficiently the scarce resources, which are at their disposal.
Control the day-to-day operations.
Focus their attention on specific issues, which really need their consideration.
Solve a variety of problems, e.g. investment decisions.
Take account of behavioural factors.

Understanding the nature of measurement and communication, the characteristics of economics information, the theories and practices of the decision making process and the identification of accounting information users are crucial to the understanding of accounting in general.

The major users in accounting information can be divided into three groups:

Internal managers who use the information for short run planning and controlling everyday operation.
Internal managers who use the information for making non-routine decisions and formulating overall policies and long run plans.
External parties, such as investor and shareholders, who use the information for making decisions about the company in general.

An accounting system is a formal mechanism for collecting, arranging and communicating information about an organization’s activities. This will only be develops if the benefits from its use, in term of improved decisions, are expected to exceed the costs of establishing and operating it.

Differing from financial accounting, the focus of management accounting is usually on the information at a more details level, on results for any products and on costs for particular productive operations. Understanding the role of management accounting requires an appreciation of what is involved in management and the kinds of decision that management is faced with.

Information is important in management decision making. The objective of the management accounting system is to provide the best information for assessments of the amounts, timing and uncertainty of cash flows to the business from each alternative course of action available to the business.

The purpose of management accounting involves identifying the types of decision needed in management accounting in order to provide useful information for managers.

The main types of decision include:

Output decision-These are decisions on what types of goods or services should be supplied, at what prices and in what quantities.
Input decision-These are decisions on how the outputs should be produced, i.e. the allocation of quantities used in raw materials, labour etc.

I think that these two types of decisions are inter-connected, because the cost of resources to produce goods and provide services is relevant to decisions on the best production output and best pricing strategy required.

The framework for managerial planning, decision-making and control process incorporates seven stages, and this is illustrated by a flow chart.

Stage 1 Identify goals of organization

Stage 2 Collect and analyse data about Alternative courses of action

Stage 3 Choose decision rules

Stage 4 Rank alternative courses of action

Stage 5 Make a decision and state expected outcome

Stage 6 Report actual outcome of decision

Stage 7 Monitor actual outcome to ensure actions under control

Stage 1 : The identification of goals

The management process consists of a series of activities in a cycle of planning and control. Planning can be specified as the choice of company objectives and the methods of their attainment.

The most obvious goal of any organization is to maximize shareholders’ wealth, i.e. profit. This is normally assumed in a traditional microeconomics analysis. Maximizing owners’ wealth also implies maximizing market share and long growth. Management must devise realistic goals for it’s firm, achievable in the short term preferably, otherwise there will be no benchmark for comparison between a firm’s progress now and say, a year later. Having said that, it’s often difficult for a firm to follow realistic goals as different participants within the organization may have their own disparate interests.

However, the first and foremost objective in organizational planning is the maximization of the present value of the organization’s future cash flows. This is adapted for a number of reasons:

It is quantitative and therefore provides a clear guide for future comparisons.
Unlike conventional profit calculations, which are based on arbitrary accounting measurements therefore doesn’t have the problem of imprecision.
It deals directly with cash available to individuals for them to acquire satisfactory products or services.
It gives some leeway to the distribution of cash among all members concerned in the firm.

Stage 2 : The collection and analysis of data about alternative courses of action

The decisions made by management can be classified into long-term decisions, such as those involving significant changed with an organization’s operation, or short-term decisions such as those, which only affects its running for a short time like the production of a certain product.

Management has the responsibility to draw up and evaluate the relative costs and benefits to the organization whichever of the decisions they are undertaking.

Sometimes, a decision which appears to be easily quantified and clear cut on paper may not be so straight forward when put into practice, thus management must contemplate carefully as these decisions will ultimately determine whether a decision is correct or not.

For example, managers should not only take into accounts the costs, revenues, incomes, etc. But also the less obvious factors such as the competition environment, interest rates imposed by the government, future operating conditions and any other uncertainty associated with the costs and benefits contribution.

Stage 3 and 4 : The choice of decision rules and ranking of alternative courses of action

Making competent decisions depends on two indispensable criteria selected by managers:

The appropriate basis for decision making
The types of data to use in decision-making and, by implication, the types of data not to use.

Decision means choices, thus decision-making implies making choices between alternatives, competing course of action. If there is no available alternative, then decision-making is not necessary. Management has to assess whether choosing a particular product X has the overall benefits or choosing an alternative, Y i.e. compare the two products, and weight up any differences between choosing on and not the other.

Management accounting is a key part in an iterative decision making process:

Alternative courses of actions are identified.
Estimating is made of the results of each alternative.
Preferred courses of actions are chosen in terms of business objectives.
Actual results are compared with corresponding estimates.
New course of action are identified.

This is a continuous process.

The fundamental question for consideration here is, “How is management to choose from among these so many possible alternatives so as to maximize the present value of the expected future cash flows?” The answer to this question is indirect. Each potential alternative will have different cash consequences and change continuously with time. Therefore, analyzing the differences between available alternatives is essential to good decision-making. This analysis is called ‘differential’ or ‘incremental’ cash analysis. This basically gives managers an overlook of the advantages and disadvantages of the choice of alternatives. The final decision is to accept the alternative with the greatest net present value or cash flow, i.e. NPV

Stage 5, 6 and 7 : The decision making and control processes

Stage 5 is the forecasting stage in which it predicts the most likely outcome of a decision, expressed in a budget form. The budget is prepared on estimates of differential costs and revenues in the chosen course of action with some valid assumptions.

Meeting budget targets can be implemented by monitoring the actual performance, this is known as the control process. This is illustrated in stage 6 and 7. Regular control reports provide a useful feedback for management to assess the progress so far.

A management control system may be used here. It is a logical integration of management accounting tools to gather and report data and to evaluate performance.

Management accounting has a role in all stages of the management process.

It evaluates capital expenditures, identifies and measures information on products and markets and is especially critical in short term planning through budgets.

Implementation

It develops accounting standards for operations, provides an internal reporting system for a particular business structure and this is known as “responsibility accounting”.

This is broken down further into three aspects:

Monitoring performance and results

Here, management accounting identifies any alterations from plans, gives prompt news on any unforeseen problems and explains the nature of results published with the organization.

It encourages staff to work at their best by rewards and incentives, and the budget and performance reports can influence outcome.

Communicating

It serves as a language tool for most business organization and provides a useful link to information system.

In conclusion, management accounting ensures the transformation process from inputs, through the production process to output is viable, and it plays a principal role in management decision-making. Management accounting is the process of identifying, measuring, accumulating, analyzing, preparing, interpreting and communicating information that helps managers fulfill organization objectives. Accounting responds to the need for quantitative financial information. It is interpreted as a language of economic activity. The purpose of accounting is ultimately to assist someone to make decisions by the accumulation of all accounting information. The information to be provided by the accounting system depends on who is making the decisions and for what purpose.

BIBLIOGRAPHY

Arnord and Turley, Accounting for Management Decision , 3 rd Edition, Prentice Hall
Arnord, Carsberg and Scapens, Topics in Management Accounting , 1 st Edition, Philip Allan
Chadwick, Management Accounting , 1 st Edition, Routledge
Horngren and Sundem, Introduction to Management Accounting , 9 th Edition, Prentice Hall
R. Hussey, A Dictionary of Accounting , Oxford University Press

...(download the rest of the essay above)

About this essay:

If you use part of this page in your own work, you need to provide a citation, as follows:

Essay Sauce, Management accounting . Available from:<https://www.essaysauce.com/management-essays/management-accounting/> [Accessed 25-06-24].

These Management essays have been submitted to us by students in order to help you with your studies.

* This essay may have been previously published on Essay.uk.com at an earlier date.

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

We're Hiring!
Help Center

Assignment on Management Accounting

Loading Preview

Sorry, preview is currently unavailable. You can download the paper by clicking the button above.

We're Hiring!
Help Center
Find new research papers in:
Health Sciences
Earth Sciences
Cognitive Science
Mathematics
Computer Science
Academia ©2024

What is Managerial Accounting?

Managerial accounting techniques, 1. margin analysis, 2. constraint analysis, 3. capital budgeting, 4. inventory valuation and product costing, 5. trend analysis and forecasting, additional resources, managerial accounting.

The identification, measurement, analysis, and interpretation of accounting information for internal decision-making

Managerial accounting (also known as cost accounting or management accounting) is a branch of accounting that is concerned with the identification, measurement, analysis, and interpretation of accounting information so that it can be used to help managers make informed operational decisions.

Managerial Accounting - Image of a business executive looking a financial report projected to an LCD wall

Unlike financial accounting, which is primarily concentrated on the coordination and reporting of the company’s financial transactions to outsiders (e.g., investors, lenders ), managerial accounting is focused on internal reporting to aid decision-making.

Managerial accountants need to analyze various events and operational metrics in order to translate data into useful information that can be leveraged by the company’s management in their decision-making process. They aim to provide detailed information regarding the company’s operations by analyzing each individual line of products, operating activity, facility, etc.

In order to achieve its goals, managerial accounting relies on a variety of different techniques, including the following:

Margin analysis is primarily concerned with the incremental benefits of optimizing production. Margin analysis is one of the most fundamental and essential techniques in managerial accounting. It includes the calculation of the breakeven point that determines the optimal sales mix for the company’s products.

The analysis of the production lines of a business identifies principal bottlenecks, the inefficiencies created by these bottlenecks, and their impact on the company’s ability to generate revenues and profits.

Capital budgeting is concerned with the analysis of information required to make the necessary decisions related to capital expenditures. In capital budgeting analysis, managerial accountants calculate the net present value (NPV) and the internal rate of return (IRR) to help managers to decide on new capital budgeting decisions.

Inventory valuation involves the identification and analysis of the actual costs associated with the company’s products and inventory. The process generally implies the calculation and allocation of overhead charges, as well as the assessment of the direct costs related to the cost of goods sold (COGS) .

Trend analysis and forecasting are primarily concerned with the identification of patterns and trends of product costs, as well as with the recognition of unusual variances from the forecasted values and the reasons for such variances.

Accounting Cycle

Capital Expenditures

Three Financial Statements

See all accounting resources

Share this article

Create a free account to unlock this Template

Access and download collection of free Templates to help power your productivity and performance.

Already have an account? Log in

Supercharge your skills with Premium Templates

Take your learning and productivity to the next level with our Premium Templates.

Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI's full course catalog and accredited Certification Programs.

Already have a Self-Study or Full-Immersion membership? Log in

Access Exclusive Templates

Gain unlimited access to more than 250 productivity Templates, CFI's full course catalog and accredited Certification Programs, hundreds of resources, expert reviews and support, the chance to work with real-world finance and research tools, and more.

Already have a Full-Immersion membership? Log in

A Comprehensive Guide for Success in Managerial Accounting Assignments

Mastering Managerial Accounting Assignments: A Comprehensive Guide to Success

The realm of managerial accounting can be intricate, demanding a nuanced approach. In this comprehensive guide, we will delve into an in-depth exploration of effective strategies and practical tips to empower you in solving your managerial accounting assignment successfully. From grasping the fundamentals to leveraging advanced tools, we've got you covered every step of the way.

Understand the Basics:

To embark on a journey of managerial accounting mastery, start at the roots. Understand the fundamental concepts that serve as the building blocks of this discipline. Delve into topics such as cost behavior, cost allocation, budgeting, variance analysis, and break-even analysis. A robust foundation in these areas will fortify your ability to unravel the intricacies presented in your assignments.

Begin by familiarizing yourself with various costing methods, such as job order costing and process costing. Recognize the distinctions between variable and fixed costs, as well as direct and indirect costs. The deeper your understanding of these basics, the more confidently you can approach more complex problems in your assignments.

Success in Managerial Accounting Assignment

Here are five fundamental points that one needs to grasp before diving into managerial accounting assignments:

Understanding Cost Classification:

Managerial accounting revolves around the analysis of costs within an organization. It's crucial to comprehend how costs are classified. The two primary classifications are variable costs and fixed costs. Variable costs change proportionally with the level of activity, such as direct materials and direct labor. Fixed costs, on the other hand, remain constant regardless of the level of activity, such as rent and salaries. Understanding these distinctions is essential for accurate cost analysis.

Example: Consider a manufacturing company. Direct materials, like the raw materials used in production, are variable costs, while rent for the factory space is a fixed cost.

Cost Behavior and Analysis:

Building on cost classifications, one must understand how costs behave in response to changes in production or activity levels. Variable costs fluctuate with changes in activity, while fixed costs remain constant. This understanding is crucial for predicting and budgeting, as well as for making decisions that impact costs.

Example: If a company increases its production, variable costs like raw materials and direct labor will increase proportionally. Fixed costs, such as factory rent, will remain unchanged.

Budgeting and Forecasting:

Managerial accountants are often involved in the budgeting process. Budgets are financial plans that outline expected revenues, costs, and expenses over a specific period. Grasping the principles of budgeting, including the creation of master budgets, flexible budgets, and cash budgets, is essential. This skill helps organizations plan and control their financial activities.

Example: A sales budget outlines the expected sales for a period, while a production budget details the units that need to be produced to meet those sales targets.

Variance Analysis:

Variance analysis involves comparing actual financial results to budgeted or expected results. Understanding the reasons behind the differences (variances) is critical for managerial decision-making. Variances can be favorable or unfavorable, and identifying their causes enables management to take corrective actions.

Example: If actual production costs are higher than budgeted, variance analysis helps determine whether the variance is due to increased costs of raw materials or inefficiencies in the production process.

Break-Even Analysis:

Break-even analysis helps determine the level of sales or production at which a company covers all its costs and neither makes a profit nor incurs a loss. This analysis involves understanding fixed and variable costs, contribution margin, and the break-even point. It's a valuable tool for decision-making and assessing the financial feasibility of various options.

Example: Knowing the break-even point is crucial when considering whether to launch a new product, as it helps determine how many units need to be sold to cover all costs.

Stay Organized:

Organizational skills are paramount when navigating the landscape of managerial accounting assignments. Establish a dedicated study schedule that aligns with your strengths and peak concentration periods. Break down the assignment into manageable sections, and set realistic goals for each study session.

Moreover, employ tools like to-do lists, calendars, and project management apps to keep track of deadlines and priorities. Staying organized not only alleviates the stress associated with looming assignments but also enhances your ability to maintain focus and sustained effort throughout the entire process.

Use Relevant Software:

In the digital age, proficiency in accounting software is indispensable. Platforms like Microsoft Excel, QuickBooks, or specialized accounting tools can significantly enhance your efficiency in solving managerial accounting problems. Excel, in particular, is a powerful tool for data analysis, financial modeling, and creating dynamic reports.

Here are some key software tools that can greatly enhance your efficiency and effectiveness in tackling managerial accounting tasks:

Microsoft Excel:

Overview: Microsoft Excel is a versatile spreadsheet software widely used in managerial accounting for data analysis, financial modeling, and creating reports. It provides a robust platform for performing complex calculations, organizing financial data, and generating graphical representations.

Key Features:

Formulas and Functions: Excel offers a vast array of formulas and functions, including SUM, IF, VLOOKUP, and more, facilitating various calculations.
Pivot Tables: Pivot tables are instrumental in summarizing and analyzing large sets of data, enabling you to extract meaningful insights.
Charts and Graphs: Excel's charting capabilities assist in visually representing financial data, making it easier to interpret and present.

Example Use Case:

Creating a budget spreadsheet with income and expense categories, utilizing formulas to calculate totals and variances.

QuickBooks:

Overview: QuickBooks is an accounting software designed for small and medium-sized businesses. It streamlines financial processes, including invoicing, expense tracking, and payroll management, making it an invaluable tool for managerial accountants.

General Ledger: QuickBooks maintains a detailed general ledger, offering a comprehensive view of financial transactions.
Financial Reporting: The software generates customizable financial reports, aiding in the analysis of profitability, cash flow, and other key metrics.
Budgeting: QuickBooks facilitates the creation and tracking of budgets, providing real-time comparisons between actual and planned financials.
Recording and categorizing daily transactions, generating financial statements, and tracking budget performance.

SAP Business One:

Overview: SAP Business One is an enterprise resource planning (ERP) software that integrates various business functions, including accounting and finance. It's suitable for larger organizations with complex financial structures.

Integrated Financial Management : SAP Business One seamlessly integrates financial data with other business processes, ensuring consistency and accuracy.
Cost Tracking: The software allows for detailed cost tracking across different departments and projects.
Advanced Reporting: SAP Business One provides advanced reporting tools for in-depth financial analysis.
Managing financial transactions across departments, tracking costs for specific projects, and generating comprehensive financial reports.

Proficiency in these software tools empowers managerial accountants to efficiently manage financial data, analyze trends, and generate insightful reports. While the specific software used may vary based on organizational needs, developing skills in these tools will undoubtedly enhance your ability to excel in managerial accounting assignments and contribute meaningfully to the financial decision-making process.

Apply the Concepts Practically:

In the realm of managerial accounting, the application of theoretical knowledge to real-world scenarios is the crucible where expertise is forged. Applying concepts practically is more than an academic exercise; it is a dynamic process that hones critical thinking skills and fosters a deeper understanding of how financial principles operate in business contexts.

Scenario-Based Problem Solving:

Practical application involves solving problems that mirror actual business situations. For instance, consider a scenario where a manufacturing company faces fluctuations in production demand. Applying managerial accounting concepts in this context would entail devising a production budget that aligns with sales forecasts, managing variable and fixed costs, and implementing cost-control measures to adapt to the changing environment.

Budget Creation for Real Businesses:

Crafting budgets for real businesses provides a tangible application of managerial accounting. Suppose you're tasked with creating a budget for a startup. This entails forecasting revenues, estimating expenses, and strategically allocating resources. By doing so, you not only grasp the theoretical aspects but also develop the skills needed to navigate the complexities of financial planning in practical business settings.

Performance Metrics in Action:

Explore how performance metrics influence managerial decisions. For example, in a retail setting, analyze how metrics like return on investment (ROI) and gross profit margin impact decisions such as inventory management and pricing strategies. By practically applying these metrics, you gain insights into how financial indicators steer operational choices within a business.

Utilizing Cost-Volume-Profit (CVP) Analysis:

Take on scenarios where Cost-Volume-Profit analysis becomes paramount. Imagine a service-oriented business contemplating expansion. Applying CVP analysis involves assessing how changes in sales volume or pricing might affect profitability. This hands-on application provides a nuanced understanding of the delicate balance between costs, volumes, and profits in practical decision-making.

Seek Additional Resources:

In the dynamic field of managerial accounting, seeking additional resources is a cornerstone for academic and professional success. Beyond textbooks and classroom lectures, diverse resources such as online tutorials, academic journals, and industry publications provide invaluable perspectives and real-world examples. Joining study groups or engaging in online forums fosters a collaborative learning environment, offering opportunities for discussion and exposure to diverse problem-solving approaches. This multifaceted approach not only enriches your understanding of complex topics but also broadens your perspective on how managerial accounting principles are applied in various industries.

Embracing additional resources is akin to unlocking a treasure trove of knowledge, propelling you towards a deeper and more nuanced comprehension of managerial accounting concepts. In a landscape where continuous learning is paramount, the proactive pursuit of diverse resources becomes a strategic tool for mastering the intricacies of managerial accounting assignments.

Stay Updated on Industry Trends:

Managerial accounting is inherently linked to the dynamic business environment. To truly excel in your assignments, stay informed about current industry trends, changes in regulations, and emerging technologies. Follow reputable business publications, attend webinars, and engage with industry professionals to gain insights into the latest developments.

For instance, if your assignment involves cost analysis for a manufacturing company, be aware of advancements in production technologies that could impact costs. Understanding the broader business context not only enriches your assignments but also positions you as a forward-thinking accounting professional.

Time Management is Crucial:

Effective time management is the linchpin of success when tackling managerial accounting assignments. Procrastination can be a formidable adversary, so start early and allocate sufficient time for research, analysis, and revision. Break down the assignment into manageable milestones, and establish a timeline that allows for iterative improvements.

Consider implementing time management techniques, such as the Pomodoro Technique, to enhance your focus and productivity. Additionally, recognize the importance of balancing your workload by prioritizing tasks based on complexity and deadlines. Consistently meeting assignment deadlines not only contributes to your academic success but also hones your ability to manage time efficiently – a skill highly valued in the professional realm.

Review and Revise:

In the intricate landscape of managerial accounting, review and revise stands as a pivotal stage in the journey toward mastery. Beyond the completion of an assignment, this phase is a meticulous examination that demands dedicated attention. Reviewing involves a comprehensive scrutiny of calculations, ensuring accuracy and precision, while revision seeks to refine and optimize the overall presentation. This iterative process is not merely a formality but a commitment to excellence.

Seeking feedback from peers, instructors, or online communities becomes paramount, providing invaluable insights for continuous improvement. In essence, this encapsulates the ethos of managerial accounting—an unwavering dedication to precision, a pursuit of clarity, and an unwavering commitment to delivering work that not only meets standards but surpasses them.

Conclusion:

In the dynamic world of managerial accounting, mastery is not a destination but a continuous journey of learning and refinement. Armed with a solid understanding of the basics, organizational prowess, proficiency in relevant software, practical application of concepts, a thirst for additional resources, awareness of industry trends, effective time management, and a commitment to continuous improvement, you are well-equipped to navigate the challenges of managerial accounting assignments.

By consistently applying these expert tips, you not only enhance your academic performance but also develop a skill set that is highly sought after in the professional realm. So, as you embark on your managerial accounting assignments, approach them not as hurdles but as opportunities to sharpen your analytical acumen and emerge as a proficient and confident accounting professional. Remember, you have the tools; now, it's time to solve your managerial accounting assignments with precision and flair.

Course Resources

Assignments.

The assignments in this course are openly licensed, and are available as-is, or can be modified to suit your students’ needs. Answer keys are available to faculty who adopt Lumen Learning courses with paid support. This approach helps us protect the academic integrity of these materials by ensuring they are shared only with authorized and institution-affiliated faculty and staff.

If you import this course into your learning management system (Blackboard, Canvas, etc.), the assignments will automatically be loaded into the assignment tool.

You can view them below or throughout the course.

Module 0: Personal Accounting— Assignment: Creating a Budget
Module 1: The Role of Accounting in Business— Assignment: Lopez Consulting
Module 2: Accounting Principles— Assignment: Accounting Principles
Module 3: Recording Business Transactions— Assignment: Recording Business Transactions
Module 4: Completing the Accounting Cycle— Assignment: Completing the Accounting Cycle
Module 5: Accounting for Cash— Assignment: Accounting for Cash
Module 6: Receivables and Revenue— Assignment: Manilow Aging Analysis
Module 7: Merchandising Operations— Assignment: Merchandising Operations
Module 8: Inventory Valuation Methods— Assignment: Inventory Valuation Methods
Module 9: Property, Plant, and Equipment— Assignment: Property, Plant, and Equipment
Module 10: Other Assets— Assignment: Other Current and Noncurrent Assets
Module 11: Current Liabilities— Assignment: Calculating Payroll at Kipley Co
Module 12: Non-Current Liabilities— Assignment: Non-Current Liabilities
Module 13: Accounting for Corporations— Assignment: Collins Mfg Stockholders’ Equity
Module 14: Statement of Cash Flows— Assignment: Kachina Sports Company Cash Flows
Module 15: Financial Statement Analysis— Assignment: Coca Cola FSA

Discussions

The following discussion assignments will also be preloaded (into the discussion-board tool) in your learning management system if you import the course. They can be used as is, modified, or removed. You can view them below or throughout the course.

Module 0: Personal Accounting— Discussion: Winning the Lottery
Module 1: The Role of Accounting in Business— Discussion: The Crafty Coffee Crook
Module 2: Accounting Principles— Discussion: SoftSheets
Module 3: Recording Business Transactions— Discussion: Baker’s Breakfast Bars
Module 4: Completing the Accounting Cycle— Discussion: Closing the Books in QuickBooks
Module 5: Accounting for Cash— Discussion: Counter Culture Cafe
Module 6: Receivables and Revenue— Discussion: Maximizing Revenue
Module 7: Merchandising Operations— Discussion: Inventory Controls
Module 8: Inventory Valuation Methods— Discussion: LIFO, FIFO, Specific Identification, and Weighted Average
Module 9: Property, Plant, and Equipment— Discussion: Cooking the Books
Module 10: Other Assets— Discussion: Other Assets
Module 11: Current Liabilities— Discussion: Current Liabilities
Module 12: Non-Current Liabilities— Discussion: Off-Balance Sheet Financing
Module 13: Accounting for Corporations— Discussion: Home Depot
Module 14: Statement of Cash Flows— Discussion: Facebook, Inc.
Module 15: Financial Statement Analysis— Discussion: Financial Statement Analysis

Alternative Excel-Based Assignments

For Modules 3–15, additional excel-based assignments are available below.

Module 3: Recording Business Transactions

Module 3 Excel Assignment A
Module 3 Excel Assignment B

Module 4: The Accounting Cycle

Module 4 Excel Assignment A
Module 4 Excel Assignment B
Module 4 Excel Assignment C
Module 4 Excel Assignment D

Module 5: Accounting for Cash

Module 5 Excel Assignment

Module 6: Receivables and Revenue

Module 6 Excel Assignment A
Module 6 Excel Assignment B

Module 7: Merchandising Operations

Module 7 Excel Assignment

Module 8: Inventory Valuation Methods

Module 8 Excel Assignment A
Module 8 Excel Assignment B
Module 8 Excel Assignment C

Module 9: Property, Plant, and Equipment

Module 9 Excel Assignment A
Module 9 Excel Assignment B

Module 10: Other Assets

Module 10 Excel Assignment

Module 11: Current Liabilities

Module 11 Excel Assignment

Module 12: Non-Current Liabilities

Module 12 Excel Assignment A
Module 12 Excel Assignment B

Module 13: Accounting for Corporations

Module 13 Excel Assignment A
Module 13 Excel Assignment B
Module 13 Excel Assignment C

Module 14: Statement of Cash Flows

Module 14 Excel Assignment A
Module 14 Excel Assignment B

Module 15: Financial Statement Analysis

Module 15 Excel Assignment

Review Problems

There are also three unit review assignments and a final review. These reviews include a document which sets up the problems and an excel worksheet.

Unit 1 Review Problem (After Module 6)

Review Problem Document

Unit 2 Review Problem (After Module 8)

Unit 3 review problem (after module 9), final review (after module 15).

Assignments. Authored by : Cindy Moore and Joe Cooke. Provided by : Lumen Learning. License : CC BY: Attribution

The Open University
Guest user / Sign out
Study with The Open University

My OpenLearn Profile

Personalise your OpenLearn profile, save your favourite content and get recognition for your learning

About this free course

Become an ou student, download this course, share this free course.

Challenges in advanced management accounting

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

There are many challenges facing businesses in dynamic economic environments. In this course we have briefly considered the use of a strategic perspective in management accounting and the application of this approach to pricing and project evaluation.

Customer profitability analysis encourages a focus on strategically evaluating customers and the costs and effort the business puts into engaging with them. It draws on an activity based approach to trace the cost of the activities to specific customers. As with all financial analysis – it should be considered in the light of other factors, for example whether or not the less profitable customer will help to open up a new market.

Project evaluation is fundamental in a strategic perspective as organisations make decisions about where to invest for competitive advantage in the mid to long-term future. A complaint about using discounted cash flow analysis is that it is too difficult to forecast cash flows over five (or even less) years into the future. In this course we provide the technical understanding for the application of discounting and techniques that support the explicit consideration of uncertainty and risks to improve the basis for decision making.

+61 481607654

Management Accounting Case Study

Introduction to management accounting.

In today’s competitive and rapidly changing environment, it is essential for the organizations to decide effective course of action. In order to effectively plan business course of action, the varied range of management accounting information is required. The financial information tends to support effective decision making within the organization. It is through access to wide range of financial information that the business unit is able to decide effective course of action. The report into consideration develops deep understanding of manner in which management accounting information helps in business decision making process. Moreover, the manner in which management accounting techniques helps in supporting strategic management decisions. Moreover, it throws light on manner in which budgeting and forecasting techniques is considered to be effective decision making tool. It also helps in understanding ways through which management accounting techniques can be used in the current competitive era of business.

We Can help!

We can help you in completing your assignment on time. Learn more about our exquisite services and see how we can help!

Be Able To Analyze Cost Information Within The Business Of Buccaneers Ltd.

Direct cost: The cost that results due to production process is termed as direct cost. Direct labor and direct materials are the main part of direct costs. Expenses related to manufacturing activities are called direct costs (Anderson, 2011).

Indirect cost: The cost that is incurred due to administrative and other expenses within the organization is termed as indirect costs. Costs related to depreciation and insurance come under this section. These are the supportive expenditures of the company.

Factory overhead: It is the part of manufacturing costs. It includes expenditures such as electricity, rent etc.

Non manufacturing costs: These types of costs are the expenditures which are not related to the production. It includes administrative expenses, selling and distribution expense (Anderson, 2006).

Cost by element: Element of cost are material, labor and expenses. Hence cost of the company can be classified on the basis of element of expenditures.

Cost by function: The cost incurred by every function of the business such as production, administration, finance, selling, distribution etc, are known as cost by function.

Cost by nature: In this kind of cost, management can divide cost into three parts such as material, labor and other expenses.

Cost by behavior: In this part cost can be classified into fixed cost, variable cost and mixed costs. Buccaneers Ltd is using cost classification by behavior in its business. They are included fixed, variable and mixed costs in business operations.

Multiple costing: The methodology emphasizes on application of minimum of two approaches for calculation of costs for the organization. The methodology is suitable for calculation of costs in automobile sector, telecom industry and so on.

Activity based costing: The activity based costing emphasizes on allocation of costs within the business based on activities for optimum allocation of resources. It is useful for the production industries (Arai, Kitada and Oura, 2013).

Batch costing: In this method, the whole process of production is divided into batches. The expenditures are also distributed on the basis of batches. It is useful for big companies.

Job costing: In this technique cost of the production is calculated as per the expenditure incurred by a specific work or job.

Contract costing: The costing methodology is applicable in businesses that are conducting operations on the basis of contracts such as construction of dams and buildings. Expenditures are calculated on the basis of every contract.

Process costing: Many companies go through different processes to produce the particular goods. Such companies use process costing. Costs are calculated on the basis of the every process (Banks, 2008). In the present case study, Buccaneers Ltd is using process costing because company has ranges of process of production such as forming, machining, finishing etc.

Evaluation of Projects

On the evaluation of case presented herewith, it is seen that Buccaneers plc evaluates the processes of production that includes forming, machining and finishing. They can use process costing method for cost calculation. The raw material is converted into finished goods by entering into different process of production. It can be therefore said that the process costing is one of the best options for the organization because it is the easiest technique and matches with the production style of the company. The company is using process costing technique for its business and operations (Birnberg and Sisaye, 2010). Besides, some tools of costing that can be adopted by the organization are described underneath in detail.

Standard costing: The costing methodology emphasizes on comparison of actual expenditure incurred to that of budgeted expenditure. This in turn helps in estimating variances that can be minimized by taking appropriate measures. It is the most famous classical tool of costing.

Marginal costing: In this method, marginal cost of products is computed by estimating a difference between fixed and variable expenditure incurred on part of the organization. It is therefore considered to be one of the easiest techniques for costing.

Uniform costing: The costing methodology emphasizes on adoption of similar costing techniques and principles by which expenditures can be controlled and regulated in a continuous manner (Budgetary control. 2011).

Buccaneers Ltd. can apply job costing method so as to estimate cost for every department. The below table 3 represents total cost estimated for different departments of the business. It is seen that the highest cost is incurred within forming department. It can be therefore said that the huge amount of money is invested in this department. Direct labor and material costs result in difference between forming department cost and other departments. On the other hand, maintenance cost of the machining department is higher than others. It can be therefore concluded that the cheapest of all the departments is finishing department (Burns, Hopper and Yazdifar, 2004). Company is implementing absorption costing so as to allocate cost appropriate on the basis of labor hour. Henceforth, the organization is suggested to monitor the cost associated with forming department. This in turn results in reducing the total cost of production.

Assignment Prime is an online assignment writing service provider which caters the academic need of students.

Be Able To Propose Method To Reduce Costs And Enhance Value Within The Business

Cost report of Buccaneers ltd shows the money incurred on each element of cost such as production cost, material cost, labor cost etc. By using effective method they can reduce their production cost. The report is prepared by using all the financial information of the business. Information or data should be accurate and correct. It should be collected in an effective manner. After proper collection of data, it should be organized, summarized and arranged according to the use of this information. After compiling of all the data, reports of cost should be developed. There are many problems which may arise during the report formulation (Hopwood, 2007). Issues related to inadequacy, irrelevancy, nu-authenticity and shortage must be avoided by the managers. Moreover, the organization should make appropriate estimation of facts and figures since these decide achievement of goals and objectives of the organization. Managers must find out the all errors of report perfectly.

Generally, there are two types of indicators of performance of the business which are as follows:

Financial statements: There are basically tree types of financial statements which show the financial position and performance of the enterprise such as income statement, balance sheet and cash flow statement. These statements help in evaluating financial performance and position of the business unit. It can be said that the profitability, liquidity and efficiency position of the organization is judged through the analysis of statements. These statements will assist in identifying the growth opportunities that exist for the organization (Kastantin, 2005).

Ratio analysis: It is the scientific way of finding out the exact efficiency, effectiveness, profitability, liquidity etc. of the associates. They can compare their performance with existing years as well as with the other enterprise to find out new development, growth and expansion opportunities for the company.

Non financial indicators: Efficiency of the labor, satisfaction level of consumer etc are included in non financial performance indicators, and these can be found out with the help of effective use of research tools and techniques. Company can conduct market research in order to find out valuable and significant data regarding consumers, employees etc.

Cost incurred, value offered and quality delivered of the product are considered to be interrelated elements. The approach of value enhancement emphasizes on rising level of profits and reducing cost of production. However, the approach ensures maintenance of adequate level of quality (Kate-Riin Kont, 2012). They can use many cost controlling techniques and value enhancement methods so as to develop business activities. Moreover, the list of expenditures which have high value can be prepared. This in turn helps in finding out efficient ways to reduce the expenditure. The organization should pay wages as per the nature and quality of work completed by distinct set of employees. The business unit can employ stock and cash controlling techniques such as just-in-time, economic order quantity and so on. These techniques help in reducing cost of holding, insurance and damages. They also can set the priority of different set of expenditures according to the respective prices. Moreover, the top management is responsible to control the high level of expenditure. The organization can adopt the latest technology so as to produce quality products at reasonable price. Moreover, the implementation of novel and fast machinery and equipment can make the production process faster (Kinney and Raiborn, 2012).

Cost can be reduce with by using just in time, EOQ etc method of inventory control. It is also helpful in improving value of products and services.
Effective and efficient use of human resource is helpful in improving quality or value and reducing expenditures such as wastage etc.
Effective cash management and working capital management is also helpful in improving efficiency of the business and finally it is helpful in value enhancement and cost management.

Be Able To Prepare Forecasts And Budgets For a Business

The process of budgeting initiates with the stage of formulation whereby the future forecast for income and expenses are made. The forecasting is done on the basis of past performance of the organization. Once the forecasting is done and budget is prepared; the actual performance is compared to that of budgeted values. This in turn helps in identifying variances which are removed through adoption of appropriate measures. It can be said that the budgeting process helps in quantifying the future performance of the organization. The key purposes of budgeting process are as follows.

Optimum utilization of financial resources
Implementation of strict control mechanism within the organization
Motivating individuals.
Communicating.
Forecasting income and expenditure.
A tool of decision making.
Monitoring business performance.

Budgeting will help to manage limited resources effectively. It provides an appropriate way of allocation of economic resources in an effective manner. The basic purpose of budgeting is decision making and planning (Lillis, 2008). The main aim behind the process is to efficiently plan financial operations of the organization. Moreover, the adequate level of co-ordination is established in allocation of resources and cost of production. It will help to predict the outcomes of an adjustment before action.

Following are the key methods of budgeting which can be used in the case study.

Incremental budgeting: It is classical and one of very simple methods of budgeting. Moreover, the budget as per incremental budgeting is prepared by continuously increasing financial figures of past years at constant or increasing rate. It will be prepared on consistent basis. The main limitation of this kind of budgets is considered to be its approach to ignore the impact of changes within organization. Moreover, limited amount of efforts are involved in development due to lack of innovation. It can be therefore said that the approach is not considered to be valuable in present dynamic environment (Obura and Bukenya, 2008).

Zero based budgeting: It overcomes the disadvantage of incremental budgeting. This approach says that the managers should start their budgeting with zero bases. They should consider the changes and make a new budget every year by starting with zero level. It is the modern method through which they can allocate resources efficiently. This type of budgeting may be used by the big companies because it requires trained and expert employees.

Top down budgeting: It provides importance on the priority of work done. It says that they should estimate the expenditure of raised level tasks introductory and use this approximation to constrain the calculation for subordinate level. This way takes very fewer time frames than others and appraises upper level loyalty (Standard Costs and Variance Analysis. 2007). This is the method utilized by the company in the present case. Hence, it can be said that it is the best way of controlling and managing variance as it includes less involvement of low level workers of the entity.

Bottom up budgeting: In this technique, budgets are formed by incorporating the input of subordinate level administration. The counsel and procedure are developed by strategic level but budgets are prepared by the individual departments. It is also a good method which can provide full information of activities easily. The company can use this kind of budgets with experienced employees.

Antonio Ltd. can set up their budget with the help of the following procedure.

Preparation of budget: The process outset with the preparation stage where they estimate the income and expenses within the company (Thomas, 2009). It is the first step of the budgeting.
Budget implementation: After formulation of various budgets, it's should be implemented in the work environment for decision making and planning.
Monitoring and evaluation: It is the most important stage of this process. They must monitor their budget’s performance from time to time for modification. The results of budget are evaluated in this step.
Assessment and computation of variances: After finding out the result of the budget, they will find out the variances by analyzing the budgeted amount and actual performance.
Modification for better results: Managers can modify the budgets by calculating the variances for better results in near future (Wildavsky, 2006).

Be Able To Monitor Performance

Variances may be characterized as the deviation between the planned and the existent outcomes of the business. This in turn raised positive variance and higher negative variances show the weak budgeting coming of the institution. Positive discrepancy of cost shows that activities are enforced in the aforesaid manner as they are expected. They are performing very well and the methods of controlling of cost are working in the organization. Positive discrepancy of sales, revenue, profit etc. shows that activities are not implemented effectively (Arai, Kitada and Oura, 2013). Minimum variance shows the effectiveness and efficiency of the business as well as their management team.

As per the accumulation, it can be inferred that there are unfavorable discrepancy for the company in the month of May due to wrong estimation of expenses and incomes for this month. They suffer from the job of proper application of suitable budgeting method which can give them valuable results (Budgetary control. 2011). As per the analysis, it can be said that the work force of the enterprise is not supportive and is not able to achieve the sales target of the business effectively. They should hire efficient employees to achieve the long term objective of the company.

Discrepancy in income is also a huge content. The grounds behind it are that expenditure of labor hours and intermediary are not projected effectively. All the swings show that pricing and costing strategies of the firm are not suited according to the nature of the products and business. They must adopt appropriate pricing schemes for their product. They should accept time series analysis techniques for forecasting because it consider time value of money and can examine the several trends of market. It can also respond to the outlook of the customers in an proper manner (Standard Costs and Variance Analysis. 2007).

The above study is related to application of management accounting in the business environment. In above report it can be reason out that there are various sorts of causes which can fluctuate the result of budgeting. Company should use suitable method for budget preparation to reduce variances. They can control their cost by using cost control models for example just in time, profitable order quantity etc. to cut down the general cost of manufacture. Information collected for budgeting and costing should be accurate and correct to achieve the objective of analysis.

Visit the sample section of our website and enjoy more such informative write-ups written by our Australian assignment help professionals.

Budgetary control. 2011.
Burns, J., Hopper, T. and Yazdifar, H., 2004. Management accounting education and training: putting management in and taking accounting out. Qualitative Research in Accounting & Management.
Hopwood, A.G. 2007. Handbook of management accounting research. Oxford University Press.
Kastantin, T. J., 2005. Beyond earnings management: Using ratios to predict Enron's collapse. Managerial Finance.
Kate-Riin Kont, 2012. New cost accounting models in measuring of library employees' performance. Library Management.

Management Notes

Conclusion for Management – Explanation in Detail | Management Notes

Conclusion for management.

Table of Contents

The management function is the backbone of any organization, guiding and coordinating resources in order to achieve its goals. In a dynamic and complex business environment, effective management is essential for organizations to remain competitive, adapt to change, and drive innovation.

An in-depth analysis of management is presented here, covering its core principles, functions, and theoretical frameworks.

Key Concepts and Functions of Management:

An organization’s success depends on several key concepts and functions within management. As part of planning, goals are set, strategies are defined, and actions are mapped out to reach them. It serves as a roadmap and guides resource allocation.

To optimize efficiency and effectiveness in an organization, it is important to organize its resources, tasks, and responsibilities. Organizational structures are designed, reporting relationships are established, and resources are allocated appropriately.

Effective leadership involves effective communication, motivation, and the development of strong relationships between managers and employees to inspire and influence others to work towards shared goals.

Employee engagement and a positive work environment are fostered by leaders who provide guidance, support, and direction to their teams.

In controlling, performance is monitored, compared, and corrected as necessary based on predetermined standards. Establishing performance metrics, gathering and analyzing data, and ensuring that organizational activities are aligned with objectives are all important components.

By implementing effective control mechanisms, managers can assess progress, identify areas of improvement, and ensure that the organization remains on track.

Management Theories:

Management theories help you understand and practice management by providing frameworks and perspectives. A variety of classical management theories emerged during the early 20th century, including scientific management (Taylorism) and administrative management (Fayolism).

The goal of scientific management was to improve efficiency through systematic analysis of work processes and the application of standard methods.

The concept of administrative management emphasizes the importance of managerial functions, coordination, and management principles.

Employee satisfaction and motivation were recognized as important by humanistic management theories, such as Hawthorne studies and Maslow’s hierarchy of needs.

A conducive work environment, supportive social relationships, and addressing employees’ psychological needs were all emphasized in these theories.

In response to the complexity and interdependence of organizations, modern management theories emerged later, such as the systems theory and contingency theory.

According to systems theory, organizations are interconnected systems, and understanding how their components interact and interact is crucial. In contingency theory, management practices are determined by the organization’s size, industry, and external environment.

Leadership Styles and Approaches:

Leadership styles are defined as the characteristic behaviors and approaches of leaders. In autocratic leadership, decisions are made independently, without input from subordinates.

When dealing with inexperienced employees or situations requiring quick decision-making, this style is effective. However, it may stifle creativity and limit employee autonomy.

Leadership that is democratic encourages employees to participate in decision-making processes. This style fosters collaboration, creativity, and ownership among employees. Laissez-faire management provides employees with a high degree of autonomy and freedom.

Despite its effectiveness when dealing with highly skilled and self-motivated individuals, it can lead to a lack of direction or coordination if not properly managed.

In today’s leadership world, empowerment and fostering positive organizational cultures are at the forefront. In transformational leadership, individuals are motivated and inspired to exceed their own self-interests for the benefit of the organization.

As part of transactional leadership, clear expectations are set, rewards are given based on performance, and accountability is maintained. Leadership as a servant emphasizes serving and supporting employees’ needs, promoting their growth and development.

Effective Management Strategies:

Organizations need effective management strategies to achieve their goals and stay competitive. The strategic planning process involves setting long-term goals, developing strategies, and allocating resources to achieve those goals.

To achieve this, it is necessary to identify opportunities and potential challenges within the organization as well as its internal and external environments.

A change management strategy focuses on successfully navigating organizational changes, such as mergers, acquisitions, and changes in market conditions. A smooth transition and minimal resistance can be achieved by planning, communicating, and engaging stakeholders throughout the change process.

Innovating within an organization fosters creativity, encourages experimentation, and drives continuous improvement. In addition to establishing processes for idea generation and evaluation, innovative ideas must also be implemented and scaled by creating a culture that supports and rewards innovation.

Management of talent involves attracting, developing, and retaining skilled workers. In addition to recruiting and selecting effectively, creating a supportive work environment that recognizes and rewards high performance, it also involves providing opportunities for growth and development.

The Evolving Landscape of Management:

As globalization, technological advancements, and societal shifts continue to influence management, it is constantly evolving. Due to globalization, markets have increased and competition has increased, requiring managers to adapt to diverse cultural contexts and develop a global mindset.

Organizations are forced to adapt to new tools and technologies due to technological advancements, such as digitization, automation, and artificial intelligence.

Corporate social responsibility and ethical management practices have become increasingly important due to changing demographics, increased social consciousness, and evolving consumer preferences.

Additionally, the rise of remote work and virtual teams has necessitated new approaches to communication, collaboration, and employee engagement.

Management Trends for the Future:

Several trends are expected to shape management’s future. Sustainable management focuses on integrating environmental, social, and governance aspects into business operations.

It is becoming increasingly apparent to organizations that addressing environmental challenges, promoting social well-being, and practicing responsible governance can build long-term value.

In response to changing market conditions, agile management emphasizes adaptability, flexibility, and rapid decision-making. The agile methodology was originally developed for software development, but is now being adopted in a variety of industries to improve organizational responsiveness and innovation.

A culture of inclusive leadership emphasizes diversity, equity, and inclusion in order to drive organizational performance. A culture of inclusive leadership fosters a sense of belonging throughout the organization, embracing diverse perspectives, ensuring equal opportunities, and fostering a sense of diversity.

In conclusion, effective management is essential for the success of an organization. Organizations can navigate the complexities of the modern business landscape by adopting appropriate strategies and leadership styles if they understand key management concepts, theories, and functions.

In order to thrive and make a positive impact on society, organizations will need to embrace sustainable practices, agile methodologies, and inclusive leadership as the field of management continues to evolve.

It is imperative that organizations constantly adapt and innovate in order to be successful in a world that is constantly changing.

Coordination is the Essence of Management – POM | Management Notes
Recent Posts

Frito Lay SWOT Analysis – Strengths, Weaknesses, Opportunities & Threats | SWOT Analysis - January 11, 2024
Fox News SWOT Analysis – Strengths, Weaknesses, Opportunities & Threats | SWOT Analysis - January 5, 2024
Freshly SWOT Analysis – Strengths, Weaknesses, Opportunities & Threats | SWOT Analysis - January 4, 2024














	'); document.write(' '); } --> '); document.write(''); } -->