Management Accounting

Assignment Context and Business Scenario

Select a company of your own choice and assume you have been appointed the Assistant Management Accountant of that company which has been operating in the industry for a number of years, which has undergone a number of changes over some time, and has expanded into new markets through acquisitions.

The Finance Director considers that the existing management accounting system needs to be revamped to make it more relevant to the changes that have occurred.

You are required to review the existing system, and conduct a research on developments in management accounting, with the view to recommending comprehensive changes to the company’s management accounting system, and preparing a report of same to the Finance Director for review and onward submission to the Board of Directors.

Your report must consider a number of themes in management accounting. Specifically it must recommend changes that cover the following:

1. Management accounting and management accounting systems,

2. Management accounting techniques for determining costs,

3. Management accounting planning tools, and

4. Response to financial problems using management accounting.

Your report must also provide examples of income statements prepared on the basis of absorption costing and marginal costing. In order to do this, you may use the data attached to this assignment brief, or you may collect your own data for that purpose.

These may be presented as appendices appropriately referenced in the body of your report. Your report must be appropriately structured. The following is suggested as a guide of how a good report should be:

An introductory section with brief a description of your selected company and what the report is about. The main section (body) of the report, which may be subdivided on the basis of the four themes listed above corresponding to the tasks on the next page.

A concluding section that briefly summarises your work.

All calculations must be disclosed in the appendix

LO1: Demonstrate an understanding of management accounting systems

LO2: Apply a range of management accounting techniques.

LO3: Explain the use of planning tools used in management accounting

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

D1 Critically evaluate how management accounting systems and management accounting reporting is integrated within organisational processes.

D2 Produce financial reports that accurately apply and interpret data for a range of business activities

D3 Evaluate how planning tools for accounting respond appropriately to solving financial problems to lead organisations to sustainable success