H/508/0489 - Management Accounting of Essentra

Scenario

Select a company of your choice operating in manufacturing industries assume that company is undergoing in major reconstruction. This reconstruction create position of junior accountant for supervision of finance director.

You are appointed as a junior management accountant of company. The Board of directors not understand the role of junior management accountants. On appointment you realise that the existing management accounting systems do not meet the present day global competitive market and cannot help the company compete with its competitors.

You are required a report to Board of Directors in which:

• Explain the role of management accounting for reorganization such as theirs, the different management accounting systems used for reporting, show why management accounting systems is important for their company and how these management accounting systems can help to compete with competitors,
• Use management accounting methods to show how management accounting can help in improving costing techniques,
• Show how the company can use different budgetary methods as planning and control tools
• Determine how management accounting can provide management with information to help resolve financial issues.

In your report, using own data provide examples of income statements using both absorption costing and marginal costing methods. Your data may be attached as appendices and if attached they must be appropriately referenced within the body of your report. In the case of any major calculations, these calculations must be attached as appendices.

Report structure

• An introductory section includes what your report will cover and a brief background discussion of your chosen company.
• The main section of the report, which may be divided on the basis of the four themes listed above corresponding to the tasks. The main body is for analysis of the main issues and is supported by referenced academic literature
• A conclusion that briefly summaries your work, findings and recommendations to the Board of Directors.

Learning Outcomes

LO1 Demonstrate an understanding of management accounting systems.

Explain the role of management accounting, the different management accounting systems and their importance. Explain different methods used in management accounting reporting.

LO2 Apply arranges of management accounting techniques.

Using your own data from selected organisations, prepare income statements using absorption and marginal costing. Apply various management accounting techniques to produce different management accounting reports relevant to the organisation. Attach all financial data you use as an Appendix.

LO3 Evaluate the use of planning tools used in management accounting

The budget is an important control tool. Discuss the advantages and disadvantages of types of planning tools used in budgetary control (calculation is not necessary). Analyse the use of different planning tools and their implementation off or casting budgets.

LO4 Compare ways in which organisations could use management accounting in context to financial problems.

Using your chosen organisation, compare how organisations are using the following management accounting methods to respond to financial problems:

• Bench-marking
• Key performance indicators (financial and non-financial KPIs)
• Balance scorecard
• Activity based costing (ABC)
• Financial governance

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