Reference no: EM131450028 , Length: word count:4000

Scenario for the said purpose towards addressing:

You work as a Management Accounting officer in a small and medium organization operating in either a Manufacturing, Retail, Hospitality or Construction sector with not more than fifty (50) employees and an annual net turnover not exceeding £500,000.

Management accounting plays a key role in organizations today and therefore decision makers in the organization must understand how to create and use good management accounting information. In today's business environment, business wants to track performance information that goes beyond just the cost-based information of historic general ledger systems provided by traditional financial accounting information.  Good management accounting involves a responsibility to manage a wide variety of critical management accounting information using management accounting system and management accounting techniques such as cost-volume- profit analysis, marginal costing and absorption costing to produce relevant management report for informed decision making.

This was the summary of the speech delivered by a conference speaker about the role of management accounting and management accounting system in an organization.  The General Manager of your organization sees management accounting function as very crucial in providing management information well informed decision making within the organization. Knowing that you are studying management accounting at the HND level, the organization sponsored you to attend this conference. After this conference the General management has asked you (Management Accounting Officer) to write a report to him covering management accounting and management accounting system together with different costing techniques and reporting to enable the organization implement them. You should also support your report towards addressing P3 with the preparation of income statement using costing techniques such as marginal and absorption from the data provided.

This should be presented as a report to the General Manager (GM) and should include the following:

Task 1   

Using the above scenario and acting as a Management Accounting Officer, you are required to present a report in a word format for P1, P2 to the General Manager choosing one organisation you are familiar with in the sectors stated in the scenario and following the instructions as specified. You are required to carry out an extensive research by using various supportive materials such as the magazine, text books, websites, journals, newspapers, lecture materials, and other relevant resources.

Demonstrate an understanding of management accounting systems

Explain management accounting and give the essential requirements of different types of management accounting systems to the chosen scenario giving examples.

P2 Explain different methods used for management accounting reporting that can also be used for the chosen scenario

Task 2 Please refer to the information as specified below and do as instructed:

Apply a range of management accounting techniques.

Calculate costs using appropriate techniques of cost analysis to prepare an income statement of marginal and absorption costing using the data provided below and explain the differences between them. To address M2 and D2, Please follow the instructions as specified below using the above scenario chosen for the purpose.

To get a merit, continue your answer by further using the same scenario as specified above and accurately apply a range of management accounting techniques and produce appropriate financial reporting documents for the chosen scenario.

To get a Distinction, Produce financial reports that accurately apply and interpret data for a range of business activities for the chosen scenario.

Your organisation produces/sells a single product. Details on the product are given below.

                                                                            £

Selling price                                                         £35

Unit costs

Direct materials                                                    £6

Direct Labour                                                        £5

Variable Production overhead                                 £2

Variable sales overhead                                         £1

Budgeted production for the period                    600 units

Fixed costs for the month are given below

                                                Budgeted cost       Actual cost

Production overhead                     £1,800                   £2,000

Administration cost                       £800                      £700

Selling cost                                  £400                      £600

Budgeted sales for the period were 450 units but the actual sales were 600 units. There was no opening stock and actual production for the month was 700 units

Calculate the net profit using absorption costing. Calculate the net profit using marginal costing

Explain the difference between the two management accounting techniques.

To get a merit, continue your answer by further using the same scenario as specified above and accurately apply a range of management accounting techniques and produce appropriate financial reporting documents for the chosen scenario.

To get a Distinction, Produce financial reports that accurately apply and interpret data for a range of business activities for your chosen organisation.

Task 3: Using the above scenario and in your capacity as Management Accounting Officer in your organisation, continue the word report to the General Manager addressing other issues in management accounting function such as budgeting and budgetary control, performance indicators and variances to bolster his/her interest to make the management accounting function in your organisation a full department rather than a unit. The fact that management accounting system could enable organisations identify financial problems to enable them adopt a strategy to investigate and address them made the General Manager determined to place much importance to establish the department. As Management Accounting Officer, using various relevant management accounting materials such as news bulletin, stakeholder reports, the YouTube, twitter, academic articles, magazine, text books, websites, journals, newspapers, and other relevant resources, your report to the General Manager should be convincing and compelling supported with relevant illustrations that would generate and preserve value for the organisation.

Explain the use of planning tools used in management accounting.

Explain the advantages and disadvantages of different types of planning tools that can be used for budgetary control for the chosen scenario. This should be supported with examples and illustrations (P4)

Compare ways in which organisations could use management accounting to respond to financial problems

Compare how organisations (Scenario chosen for the purpose) such as yours should adapt management accounting systems to respond to financial problems. This should be supported with examples and illustrations (P5)

Note: To address the merit and distinction please refer to the assessment guidelines as specified below.

Attachment:- Assignment File.rar