Management Accounting report for Tech (UK) Limited

Assignment title

You have been working as an Apprentice/ Trainee Management Accountant at Tech (UK) Limited, who is

producing special charger for mobile telephone and other carry-on gadgets for retail outlets in the UK.

During the last senior management meeting, some department managers have complained about the lack

of financial information to improve their decision making.

Your Line Manager who is the Director of Finance in Tech (UK) Limited has asked you to produce a written

report as part of your learning which will also be circulated to all the department managers.

At the planned meeting, you have been asked to prepare a well-researched written report on the functions

of Management Accounting systems.

Task 1

Your report should be in two parts covering;

a) Explanation of management accounting and the essential requirements of management accounting

system which entails:

I. Distinguishing Management Accounting from Financial Accounting.

II. The importance of management accounting information as a decision making tool for

department managers.

III. Cost accounting systems (actual, normal and standard costing)

IV. Inventory management systems

V. Job costing systems

b) Presenting financial information.

I. Different types of managerial accounting reports

II. Why it is important for the information to be presented in manner that must be

understandable.

[This will enable you to achieve P1 and P2]

Merit & Distinction: This task provides you with the opportunity to achieve Merit (M1) and Distinction (D1).

To achieve M1 you will need to evaluate the benefits of management accounting systems and their

application within the context of Tech (UK) Limited.

To achieve D1 you will need to critically evaluate how management accounting systems and management

accounting reporting is integrated within organisational processes.

Task 2

Tech (UK) Limited commenced business on 1 September 2010 producing special charger for mobile

telephone and other carry-on gadgets, the cost card of which is as follows:

£ Direct labour 5.00 Direct material 8.00 Variable production overhead 2.00 Fixed Production Overhead 5.00

Standard Production cost = £20.00

The fixed production overhead figure has been calculated on the basis of a budgeted normal output of

36,000 units per annum. The fixed production overhead incurred in September was £15,000 each month.

Selling, distribution and administration expenses are:

Fixed £10,000 per month Variable 15% of the sales value

The selling price per unit is £35 and the number of units produced and sold were:

September (Units) Production 2,000 Sales 1,500

You are required to prepare income statements for the month of September using;

I. absorption costing and II. marginal costing methods

[This will enable you to achieve P3]

Merit & Distinction: This task provides you with the opportunity to achieve Merit (M2) and Distinction (D2).

To achieve M2 you will need to accurately apply the techniques and reconcile the profits to produce

appropriate financial reporting document.

To achieve D2 you will need to accurate apply and interpret the data for the business activities.

Task 3

In the senior management meeting it was discussed and agreed that department managers should have

more involvement and take responsibility for their department budgets. This news was greeted with a

welcome response, yet managers have requested for more information and training on using budgets for

planning and control purposes.

Your line manager has requested you to provide a management report explaining the use of budgets for

planning and control purposes.

In your report you should cover;

a) Different kinds of budgets and their advantages and disadvantages

b) The budget preparation process including determination of pricing and different costing

systems that can be used.

c) The importance of budget as a tool for planning and control purposes.

[This will enable you to achieve P4]

Merit & Distinction: This task provides you with the opportunity to achieve Merit (M3) and Distinction (D3).

To achieve M3 you will need to analyse the use of the different planning tools and their application for

preparing and forecasting budgets

To achieve D3 you will need to evaluate how planning tools for accounting respond appropriately to

solving financial problems to lead to sustainable success.

Task 4

Tech (UK) Limited has recently published their accounts for the last financial year showed a loss of £1.5

million. The company is evaluating ways in which the organisation could use management accounting to

respond to financial problems. The auditors in their recent report has suggested the use of a Balanced

Scorecard approach.

Required:

Referring to Tech’s current financial situation, explain ways by which the Balanced Scorecard approach

suggested by the auditors can be used to respond its financial problem and compare this approach to

another management accounting approach used in another organisation of your choice. You must provide

relevant financial information about the other organisation you have selected for comparison.

[This will enable you to achieve P5]

Merit & Distinction: This task provides you with the opportunity to achieve Merit (M4) and Distinction (D3).

To achieve M4 you will need to analyse how, in responding to financial problems, management accounting

can lead organisations to sustainable success.

To achieve D3 you will need to evaluate how planning tools for accounting respond appropriately to

solving financial problems to lead to sustainable success.

THE END

Academic Misconduct’ Statement:

‘Academic Misconduct’ is a term used to describe a deliberate attempt by a student to take unfair

advantage over other students to undermine the quality, standards and credibility of the programmes and

qualifications offer by UKCBC. Academic Misconduct includes: plagiarism; collusion; falsification;

replication; cheating; bribery; and impersonation. A student suspected of Academic Misconduct will be

investigated by the College and appropriate action will be taken.

‘Contract Cheating’ Statement:

‘Contract Cheating’ is defined by the Quality Assurance Agency (QAA) as occurring when, “a third party

completes work for a student who then submits it to an education provider as their own, where such input

is not permitted.” Such third party companies have become known as ‘essay mills’, and it is the

responsibility of students to avoid contact and association with such third party companies throughout

their entire period of study. A student suspected of Contract Cheating will be investigated by the College

and appropriate action will be taken.

Glossary of commonly used academic words

Account for Give reasons for: explain why something happens.

Analyse Examine something in very close detail and from a number of

angles. Identify the important points and chief features, and

understand their relationships.

Argue Present a case for and against a proposal or statement and

present your own opinion at the end.

Compare Show how two or more things are similar.

Contrast Look at two or more things and draw out differences. State

whether the differences are significant.

Critically evaluate Weigh arguments for and against something, assess the strength

of evidence on both sides.

Define Give the exact meaning of.

Describe Give a detailed account of the main features or characteristics …

Discuss Write about the most important characteristics of something.

Give arguments for and against, look at it from a variety of

perspectives.

Distinguish Identify the differences between two items.

Evaluate Assess the worth or usefulness of something. Use evidence to

support your opinion.

Examine Look at something in detail. You may be expected to ‘critically

evaluate’ it as well.

Explain Make it clear why something happens or why it is the way it is.

Identify Recognise name and briefly describe something.

Illustrate Use examples to further explain or justify something. Could be

visual or verbal.

Interpret Explain the meaning or significance of information or data that

you are presenting.

Justify Provide evidence that supports an argument or idea.

Outline Give only the main points, show only the main structure.

Prove Present evidence in a logical structure to support an argument for

a point of view.

Relate (Two

meanings) 1. Show how ideas / theories/ events etc are linked or connected.

2. Tell a story. Explain something in a narrative fashion.

Review Survey and comment on the key aspects of something or a range

of things.

State Give the main features clearly and simply.

Summarise Draw out the main points, omitting detail and examples.

To what extent… How far is something true, or contributes to a final outcome. Also

how far is it not true? In academic writing the answer is usually

somewhere in the middle.

Trace Describe the development of something; follow the order of

different stages in an event or process.

Adapted from Cottrell.S.(2003) The Study Skills Handbook. Basingstoke. Palgrave.

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