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Unit 9 Management Accounting Assignment Regent College


Management accounting is identify as an effective process of identification, accumulation, measurement, preparation, analysis, communication and interpretation of information that supports managers in particular decision making within the framework of completing the organisational goals and objectives. It is also define as a process of preparing management accounts and reports that render proper and timely statistical and financial data which is require by administrators in order to make short as well as day-to-day decisions in accurate manner (Baldvinsdottir, Mitchell and Nørreklit, 2010). Management accounting is more essential and important for the company in different terms like; determine of aim, better service to audience, assist in the plan preparation, measurement of performance, large number of profits can be obtained, security and safety from trade cycle etc. In present assignment, chosen organisation is Unicorn Grocery which is a retail business that deals in dried, processed and fresh drink and food. They also renders, body care, household and grocery products to the customers. Annual turnover of the organisation is less than £500,000 and workers are employing approx 50. This report based in different tasks which cover various points like, importance of management accounting, range of management accounting tools and many other. Use of planning tools and techniques which is also determined in this project. There are different ways in which an enterprise apply management accounting in order to solve financial problems in an effective and efficient manner.


P1. Management accounting and essential requirements of management accounting systems

Management accounting: It is the provision of non-financial and financial decision-making data or information to managers (Bodie, 2013). Management accounting is also identify as the cost and managerial accounting, it the process and activity of evaluating business operations and costs in order to prepare internal financial account, report and records to assist administrators' decision making process in accomplishing long term goals of business. In simple word, it is an effective act of making sense of costing and financial information and translating that content into valuable data for officer and management within an enterprise. All these in formations are assist the administrator of Unicorn Grocery to recognise their market position and design such plan of action which support in effectively preparation of their activities and functions (Cinquini and Tenucci, 2010). Management accounting report give different information and data about sales revenue, cash, outstanding debts, variance analysis, raw material and so on. These type of data assist in allocation of optimum and various resources to organisational departments.

Management accounting system: There are different systems of management accounting which is used by the Unicorn Grocery with motive to maintain their financial as well as non-financial record, report and account information (What are the Different Types of Management Accounting Systems? 2017). Certain management accounting systems are determine as below:

Managerial accounting: It is the main type of management accounting which is identify as a process. It is essential and important for the manager of Unicorn Grocery in order to make an effective decision about achievement of long term growth and success. This type of system renders a chance to administrator in order to plan, manage and control business functions and take an effective judgement which assist to enhance their performance and profitability.

Inventory accounting: It is another beneficial part of the management accounting system which is prepare by each and every organisation with motive to track the inventory level in enterprise. This assist in finding that how much inventory is needed to yield their goods effectively (DRURY, 2013). It also help the business manager to satisfy basic needs and demands of the customers by providing quality and healthy products to them at reasonable price. This also support in ordering fresh stock and assign to the department of production in a proper manner.

Job costing: It is another approach that assist in determination of product cost which is obtain by an enterprise in case of revenue and job generated. For this motive, there is the requirement to allot jobs to various items of revenues as well as expenses also.

Cost accounting system: It is another important system of management accounting which help Unicorn Grocery in monitoring cost which are get on the effectiveness of various functions of enterprise. This approach includes cost determination process with purpose of improving profitability and analysing inventory valuation.

Requirements and Importance of management accounting systems: Above discussed all management accounting systems are needed by the Unicorn Grocery in different terms which are shown as below:

Determine of Aim: System of management accounting is highly needed by the organisation because with the help of financial and non-financial information, Unicorn Grocery easily determine their long term goals and objectives in allotted time period (Garrison and et. al., 2010).

Better services to customers: In this cost accounting system is highly support the business manager to reduce their product price. Thus, it can result is large number of the customers are attracted towards grocery products. Entire workforce in the organisation are assemble cost conious effectively. In this product quality is become better because standards of quality are predetermined.

Provide effective management control: Above all systems of management accounting help the business manager in order to control all process and activities of the business organisation (Giovannoni, Maraghini and Riccaboni, 2011). It also support to the administration in planning of coordinating and monitoring activities of company.

M1:Benefits of management accounting systems

Management accounting system is one of the best approach which is used by the each and every organisation in order to accomplish their predetermined objectives and goals. There are different benefits of management accounting system in Unicorn grocery which are identify as below:

  • Identifying the Aim
  • Assist in the preparation of better plan.
  • Better Services to Customers
  • Measurements of performance
  • Easy to take judgement:
  • Its Increase Efficiency of the business

All these provides are highly support the organisation to achieve long term success and development. With the help of these they can easily measure employees performance in an effective and efficient manner (Herzig and et. al., 2012). It assist the manager is to take an effective decision about attracting large number of clients towards business products and services.

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D1 Process of the management accounting systems

Management accounting system process assist the business organisation in order to maintain their financial record in an effective and efficient manner. Further, it help organisation to accomplish long term objectives and targets in limited time duration. With the help of this process, Unicorn grocery can easily deal with customers and gain competitive advantages in easy manner.

P2. Different methods of management accounting reporting

There are different approach of management accounting reporting which assist the business manager in order manage the financial records. This approaches is apply by the accounting manager of the Unicorn Grocery with motive to prepare management report in an accurate manner. This reporting includes job cost report, budget reports, accounts receivable report, inventory and manufacturing reports. All these are highly beneficial for the retail sector to accomplish their predetermined objectives and targets. In this manager play vital and essential role in making an effective decision about increasing performance and profitability of company in given time duration (Li and et. al., 2012). These type of report mainly prepared weekly, quarterly, monthly and yearly basis. Some management accounting reports are defined as below:

Budget reports: This type of report is highly required by the each and every organisation to prepare budgets of organisation as per its expenditure which are obtain in previous years. It support the management level of the enterprise in order to analysis business and different department of the organisation performance. These kind of report works as monitoring device which support in handling the risks as well as render solutions about various problems.

Account receivable report: It is another part of the management accounting report which is prepared by the accountant for the motive of handling their debtors easily. It is an effective method which is applied by business with purpose to manage cash flows and take an accurate decisions about increase the credit period time in which cash payment is cured from business debtors. This method also support the company to identify problems related in collection process. This render chance about plan of better strategies and resolve from such issue. This will also support in enhancing entire system in an effective manner.

Job cost report: It is another part of the management accounting report which is prepared by the cost manager of the Unicorn Grocery in order to determine revenue which are get on formulation of particular project. This will also support in linking the outgoing with the anticipated revenue. It also render chance about evaluation of profitability and effectiveness of the project or plan which is started by organisation for achievement of their long term targets and objectives (Luft and Shields, 2010). Job cost report is also support in generating maximum number of profit and advantages in a proper manner. This also involves on saving the cost and time of the organisation to decrease their business operations and functions on such ground which is not better for them.

Manufacturing and Inventory report: It is the role and responsibility of manager is to prepare a report regarding manufacturing and inventory goods of Unicorn Grocery. Such kind of report support the administration of the finished products and raw materiel in a proper manner. This methods involves in preparation and designing of the grocery products as per the market demands as well as allocation of optimum resources. These type of report consider regarding overhead cost, labour cost and wastage of stock.


P3 Calculation of cost by using marginal costing and absorption costing

Unicorn Grocery is a retail organisation and has less employees and turnover. In order to increase their sales and maintain employees performance, company use two types of costing approach which support business to prepare their income statement and calculate cost (Lukka and Modell,2010). Absorption and marginal both are essential and useful approach which is used by the organisation. These are identified as below:

Marginal costing: This type of approach support in finding of opportunity cost obtained by business on the manufacture of one and more unit of grocery items. It is also define as, variation in the total manufacture due to maximise and minimise of single unit. With the use of this methods, business can get only break even point. It means variable cost is accounted and fixed cost is engrossed. This approach is also essential in allocation of resources because it support in accomplishment of optimum outputs. It is also important for the organisation to maintain their performance and profitability in an effective and proper manner.

Absorption costing: It is depict as an essential and foremost approach of costing which is applied by the administration of Unicorn grocery company. This tool assist the business organisation in measurement of cost which is obtained on the process of product production considering indirect and direct expanses (Macintosh and Quattrone, 2010). In case of direct cost which is directly linked to the product production like, labour cost, raw material and son on. In case of indirect coast that cover different expanses which are find supportively and indirectly on the measurement of products such as factory rend and many other.

Difference between Absorption and marginal costing: There are some points which are easily identify differences in between both costing. These are determine as below:

Basis for comparison

Marginal costing

Absorption Costing

Meaning and definition

It is a decision making concept for finding the entire cost of production is called marginal costing (Otley and Emmanuel, 2013).

Apportionment of entire values to the cost center with aim to identifying total production cost is called absorption costing.

Classification of Overheads

Variable and fixed

Administration, production, selling and distribution.


Profit is calculated with the help of profit volume ratio.

Due to fixed cost inclusion is highly affected on business profitability.


This type of cost is highlight on contribution per unit.

This kind of cost is highlight on net profit per unit.

Cost recognition

In this variable cost includes as per the product cost and fixed cost calculated as per the period cost.

In this both variable and fixed cost are included as per the product cost.

M2 Techniques and reconcile the profit

Above disused both technique's such as absorption and marginal costing help the organisation to identify their net profit and sales. This tools are highly support retail organisation to keep employees performance easily. In this profit and information are accurately proper which support to maximise their profitability and productivity ratio in given time duration (Scapens and Bromwich, 2010). All these technique's give accurate information to the company so that they are capable to accomplish their long term and pre-determine objectives in given time duration.

D2 Data of the business activities.

Balance sheet, income statement and cash flow are important tool for the each and every organisation. All these are known as a financial report of the company which turn to get accurate data regarding business performance and profitability. These technique's are provide accurate and proper information to the organisation. With the help of these they are capable to do their all activities and functions in proper manner. These support to increase their reputation and goodwill in marketplace.


P4. Benefits and limitation of using planning tools

Budget is an effective technique which is prepared by the accounting manager on the basis of figuring expenses and cost which will obtained in future. It is assemble with the aim of ignoring the situation of lack of fund by which entire employees of the enterprise perform better with motive to accomplish long term goals and objectives of the company. Accurate budget also support them to maximise customers and employees base in the organisation. Thus, budget is necessary for the each and every company to maintain their regular basis transaction easily. Mainly it is prepared for 5 years for handling future operations and activities of Unicorn grocery.

Budgetary control: It is a role and duty of manager is to apply different tools and techniques for control process of budget in an effective and efficient manner (Simons, 2013). This tool guide and direct the workforce to utilise optimum resources in proper manner. It support an enterprise in order to perform business operations and functions without facing any issue related to lack of fund.

Process of budgetary control: It is another important and beneficial for the each and every organisation to control all activities and functions of the company easily. With the help of this process Unicorn grocery can easily identify needs and wants of the customers as well as employees towards business products, services and process. This process includes different steps which are determined as below:

Discuss with administrator to make an effective strategy: It is a fist step which is essential for the company to maximise their sales and revenues. In order to make an effective budget process, manager is responsible to make better decision which assist to accomplish long term objectives and targets easily (Soin and Collier, 2013).

Record the real performance: It is also essential process which is follow by the Unicorn grocery in order to maintain entire record and information related to employee performance. It assist the enterprise to retail entire activities and functions of the organisation in limited time period.

Comparison of existent with the planned: At this level, budgetary-control activity support the manager in order to compare actual performance with desired effectiveness which assist in measuring budgeted and variable cost of sales effectively.

Determine different or other variance: This stage mainly connected with reviewing differences in between desired and real performance of company. For this administrator of the Unicorn grocery require to recruit a best people who is liable to analysis the intellect of variation and taking effective actions with motive to accomplish predetermined goals and objectives effectively.

Respond immediately: It is a last phase which is needed by the manager in order to analysis business performance according to the necessary data and information which is collected by the manager of the Unicorn grocery (Van der Steen, 2011).

Planing tool: It is one of the best and essential tool which is used by the each and every organisation to prepare an effective budget. This tool includes different budget which is determine as below:

Forecasting Tools: It is essential techniques which is applied by the administrator in forecasting the happenings and trends of the company that happen in the competitive marketplace like labour, prices, demands and many other. For this the administrator has to conduct an investigation programme where they analysis chances of possibility which support them in accomplishing predetermined objectives and targets. There are different advantages and disadvantages of the forecasting tool which are determined as below:



It support administrator is to prepare and design for future situation via implementing and formulating effective strategies to organisation.

Information and data regarding this tool is not appropriate which can cause as a losses in the company.

Scenario Analysis techniques: It is another technique which support Unicorn grocery and its manager in order to identify risk and uncertainties that will highly impacts on the business development and growth (Ward, 2012). There are some advantages and weakness of this methods which are identify as below:



This tool support in handling risk and uncertainty via implementing proper contingency strategies and plan to accomplish desired objectives and targets.

The quality data and information which is highly impacts the dependability of model. In this quality is very poor which can case as negative outcomes.

Contingency planning tool: It is another essential and beneficial techniques which is apply by Unicorn grocery. Today's business environment is more complex or analysable, it is required by the organisation in order to control business activities via formulating contingency plan (Zimmerman and Yahya-Zadeh, 2011). Some disadvantage and advantages of Contingency planning tool are determine as below:



This tool assist in managing and handling excessive burden and load though decreasing cost.

In nature, business environment is dynamic or complex by which administrator analysis difficulties and issues to forecast.

Types of budget: There are different kind of budget which are follow by the Unicorn grocery. These are determined as below:

Master Budget: It is an aggregate of an organisation's individual budgets planned to show a complete image of its financial health and activity. It is combination of operating expense, sales, income streams, assets to allow business in order to establish long term goals and analysis their entire performance.



  • Master budget show the entire earning and spending of the organisation
  • This budget yield the summary of the organization budget to the business manager and company executives.
  • The main disadvantage of master budget is difficult to inform the detail.
  • In this budget various categories are enclosed that is why it is hard to perform.

Operating budget: With the help of this budget business entity analysis and forecast their projected expanses and income over the study of a particular time period. This type of budget includes production, labour cost, sales, overhead, material cost, administrative expenses, manufacturing cost and many other.



  • This type of budget render the elaborated investigation of future and actual planned expense pattern control.
  • It change unnecessary costs and concentration on worth adding activities.
  • This type of budget is time consuming due to different transactions.
  • In nature operating budget is inaccurate.

Financial budget: This kind of budget shows business strategy for handling its income, cash flow, expenses and assets. It is used by the Unicorn grocery to determine their financial budget value in the part of a public stock offering.



  • This budget show the financial position and situation of the company at market place.
  • With the use of this budget an enterprise easily analysis their performance.
  • This budget is more costly and time consuming for the small and medium organisation.
  • This type of budget is only used in order to record financial information.

M3 Preparing and forecasting budgets

Above disused all tools are highly essential and beneficial for the organisation to maintain their performance. Name of this tools are forecasting, Contingency planning and Scenario Analysis technique's. All these are highly support to maximise sales and revenues of the organisation. These technique's also support to analysis risk and uncertainties, it is the role of manager is to use different effective concepts which support to overcome this in an appropriate manner.

D3 Planning tools of the accounting in financial problem

Planning tool also support the business organisation in order to overcome all issues and problems in the organisation. Contingency planning, Scenario Analysis and forecasting tool support the business enterprise to reduce manage employees performance and improve effectiveness and profitability of the organisation (Zimmerman and Yahya-Zadeh, 2011). It is also beneficial for the Unicorn grocery to easily record important and financial information. This information and data assist to accomplish long term objectives and targets in given time duration.


P5. Various measures to resolve financial problems

In Unicorn grocery, there are different issues which are face by the company and its employees. These are highly effects on the business performance and profitability. Some issues which is observe by the managers are determine as below:

Profitability: It is a main issue which is face by the organisation due to lack of fund and misunderstanding which is rises among the workforce (Cinquini and Tenucci, 2010). This issues mainly effects on the company and its productivity ratio which can cause in negative outputs.

Cost effectiveness: It is another main issue which is face by the Unicorn grocery. This problem mainly related with the production process of organisation. So it is a main problem in the enterprise which effects on its performance and effectiveness.

In order to over come above both type of issues company use different tools and technique's which are determined as below:

Key performance indicators: It is used by the each and every enterprise with a objective of analysing employees performance. Thus, it is the role and duty of administrators to fix desired performance and effectiveness which help to reduce employees turnover in an effective and efficient manner. This tool also assist in enhancing entire performance of workers, thus Unicorn grocery easily achieve long term objectives and targets.

Financial governance: It is another important technique which is mainly related with the standards and guidelines which is made by the legal authority in order to ensure success and development of company. Sometime business entity found few issues in complying with laws and rules of the government in order to attain targets.

Read also:
Unit 3 Management Accounting Level 6 GSM London
How Businesses Operates in United Kingdom

Benchmarking: Large number of the competition in marketplace would which impact the stability and effectiveness of organisation thus it is needed for administrator to emphasis on challengers strategy and policy (Bodie, 2013). Such type of strategy support the company in order to compete their challengers efficiently.

Difference between Unicorn Grocery and Imda Tec

Unicorn Grocery

Imda Tec

Unicorn grocery is a small organisation that deals in different products, so in this they required to apply financial governance tool which help to easily measure business performance.

As the business run at small level due to which business administrator necessity to measure and control issues or problems in appropriate manner. In this they use Key performance indicators.

They also apply KPI which help to easily measure employees performance in an effective and efficie

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