2G-Management Accounting

Submission Front Sheet
Assignment Code: RQFBM-MA0502051
Programme: BTEC Higher National in Business (RQF)

Unit Title and Number: Management Accounting (Unit 5)
RFQ Level: 4
Unit Code: H/508/0489
Credit value: 15 credits
Module Tutor: Desh Sharma
Email: d.sharma@mrcollege.ac.uk
Date Set: 20.04.2020
Student’s Name: Zbirciog Daniela

Registration Number: 25113
Date: .06.2020
Session
Learner’s statement of authenticity
Student’s Name: ___Zbirciog Daniela____Student’s ID Number: ____25113________

I certify that the work submitted for this assignment is my own. Where the work of others
has been used to support my work then credit has been acknowledged. I have identified and
acknowledged all sources used in this assignment and have referenced according to the
Harvard referencing system. I have read and understood the Plagiarism and Collusion
section provided with the assignment brief and understood the consequences of
plagiarising.
Signature: ___________________ Date: ___/_june_/_2020__
Is this a First Submission or Second Submission ?
Word Count (max.5000)

words
Turnitin Score
%
Management Accounting RQFBM-MA0502051 June 2020
Table of Contents
Introduction......................................................................................................................................2
Main Body.......................................................................................................................................2
Management accounting system..................................................................................................2
Management accounting and requirements of various kinds of management accounting
systems.....................................................................................................................................2
Various techniques for reporting management accounting......................................................4
Advantages of management accounting system.......................................................................4
Assessing the integration of management accounting reporting and management accounting
system.......................................................................................................................................5
Management accounting methods................................................................................................6
Cost analysis techniques for preparing profit and loss statements...........................................6
Application of proper management accounting techniques for creating financial reporting
documents.................................................................................................................................6
Create a financial report...........................................................................................................7
Planning tools used in the management accounting....................................................................7
Benefits and drawbacks of various kinds of planning tools for budgetary control..................7
Planning tools usage and its application for forecasting and making a budget........................9
Ways through which management accounting can be used towards financial issues................10
Compare the ways through which an organisation is adapting the management accounting
systems...................................................................................................................................10
How management accounting can lead to sustainable efficiency by responding the financial
issues......................................................................................................................................11
Planning tools solve the financial issues towards sustainable organisation efficiency..........12
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
Appendix........................................................................................................................................15
1
Zbirciog Daniela 25113
Introduction
The purpose of this report is to portray the importance of the management accounting system.
The management accounting system is mainly applied in the business environment. The study
mainly based on the procedures in which management accounting uses financial data. The
utilization of financial data helps the business to create strategies, planning, monitoring, and
managing the financial position in the business. This study would help the learner to identify the
importance of financial planning. the respective study will also enable the learner to understand
the tools and methods required to implement management accounting systems. The study also
depicts the processes through which the accounting manager will be able to identify, measure,
interpret, and communicate the information concerned with financial data towards reaching the
overall business goals. The report also helps in understanding the significance of management
accounting systems and management accounting reports. The report will also help in making an
effective financial decision in the business. Both short-run and long-run decisions can be created
through the integration of managing accounting systems. The report is mainly prepared for the
position of Assistant Management Account in IKEA.
Main Body
Management accounting system
Management accounting and requirements of various kinds of management accounting

systems
Management accounting is also known as cost accounting. Management accounting is a process
that the organization uses for analyzing the business operations and costs for creating internal
financial records, reports, and accounts. These statements help the manager of the organization to
make decisions for attaining the goals and objectives of the business. This analysis is able to give
insights into costing and financial data. This data is hence translated into valuable information
for the managers and management of the organization. The financial managers are able to make
financial strategies through the utilization of budgets, sales forecasts along with job costing
methods between other tools of managerial accounting. The managers are also able to use the
data of the financial statements of the business in order to develop plans which would develop
2
the overall gross earnings, earnings per share, and net revenue. The financial accountants play
the main role in creating effective financial plans starting from capital equipment purchase, to
minimize the operating expenses so as to ensure that it is viable for the business. The
management of the business adjusts the capital structure of the business. The financial managers
then could be able to explain the consequence of incorporating additional equity or debt
financing. The consequences could be also attained when the business is more likely to merge
with the other businesses or starting off new operating services or dismissing the significant
numbers of the workforce. The managers are also able to analyze the influence of decisions upon
financial reports and budgets. The manager also has the capability to depict the impacts of
adjusting decisions on the company’s income and cost in a specific period of time (Cimaglobal,
2018).
The financial managers are also able to formulate flexible, static, and rolling budgets in addition
to various kinds of reports which enable the senior managers and head of the departments to
evaluate the expenditures. It is very significant since operating costs directly influences the
bottom line of revenue. The management accountant is also able to choose the method of optimal
budgeting which meets the needs and requirements of stakeholders. It also helps the organization
to carry out the operations in a cost-effective way. The managers are also able to formulate ad-
hoc statements that facilitate the stakeholders to comprehend the role of expenses within their
departments. There are a number of tools that could be utilized by the management accountant
in order to maintain profitability. In this particular type of interpretation, the managers evaluate
the sales of the business in opposite to the fixed and variable costs for determining the stage at
which the business is able to attain breakeven which is considered as the stage in which the
company neither attain profit nor incur losses. After determining this particular stage the
management of the business can be able to fix the specific level of production which would help
them to achieve breakeven point. The management is also able to determine the objectives of
sales along with identifying the overhead costs which play an important role in influencing the
profitability of the organization. The accountants of the business could also be able to evaluate
the indirect and direct cost of manufacturing which helps the organisation to optimise the cost
structure (NAP, 2016).
3
Various techniques for reporting management accounting

There are a number of techniques which are required to report the management accounting.
These methods and tools are identified in the following points
Financial planning: the key aim of the business is to develop the overall profitability of their
organisation. The aim of achieving a significant level of profit can be only achieved if the
management is able to create effective financial strategies. Financial planning is said to be one of
the most effective tools for management in order to achieve the aims and objectives of the
business.
Financial statement analysis: it is very important for the management accountant to analyse the
financial statements of the business. The statements which are included in the financial reporting
are identified as the income statement, cash flow statement and balance sheet. The analysis of
these statements is able to portray the financial position of the business to the management. It
also helps the managers of the finance and account department to determine the growth rate of
the organisation. The particular financial statement analysis is mainly conducted through the
common size statements, financial statements and financial ratio analysis (Sullivan, 2019).
Cost accounting: This tool helps in determining the data concerned with the expenses on the
basis of department, product and process. The data of expenses are mainly evaluated in opposite
to the predetermined expenses data. The comparison of current expenses with that of previous
expenses helps the management to determine the reasons behind such a trend and able to analyse
the consequences of such change.
Fund flow interpretation: the interpretation of the flow of funds from one particular period of
time to another is mainly carried out through this tool. The particular analysis is considered as
very important in order to analyse whether the business is able to utilise is funds in a most
effective manner or not during the specific period with comparison to the past years. The
changes in working capital and the proportion of funds are also recognised under this specific
analysis (Deloitte, 2017).
Advantages of management accounting system

The management accounting system mainly measures the real performance of the business. The
actual performance of the business can be analysed and the manager fo the finance and accounts
4
department can also able to compare it with the budget which has been prepared in the past
period. The manager can easily able to determine in which section they have gone beyond the set
budget. The issues of using up additional funds as compared to the anticipated budget can be
easily determined through the help of a management accounting system (Toppr, 2019).
Through effective utilisation of management accounting systems, the business activities of the
organisation could be managed in a most efficient manner through the application of planning as
well as budgeting.
The overall efficiency of the organisation can be also encouraged through the help of the
management accounting system.
The relationship and connection between labour and management are also enhanced through this
particular system.
Assessing the integration of management accounting reporting and management

accounting system
Managerial accounting mainly helps the organisation with qualitative and quantitative
information based on financial and operational performance. The financial accounting mainly put
emphasis upon the external utilisation of the particular information through creditors. The
integration also helps the manager to assess the business performance and decision-making
capability of the manager, employees and management. The managerial accounting system of the
business includes the processes that the business installs in order to plan and control operations
and maintains an effective decision-making process. Managerial accounting report is considered
as a subcategory in which the fund's usage is controlled and planned. It also facilitates the
employees, managers to make decisions by budgeting and then manages the budget by
evaluating the budget towards actual expenses and revenues, monitoring the variances in the
budget. Managerial accounting as the resource planning tool mainly focuses on the future so that
the resources can be monitored (Smith, 2017).
5
Management accounting methods
Cost analysis techniques for preparing profit and loss statements

There are various types of costing systems which are identified as marginal costing system, and
absorption costing system.
The marginal costing system is considered as the cost of a single additional output unit. This
particular concept is mainly used to determine the optimum quantity of production of the
business (Garcia, 2018). The particular concept also used for determining the prices of products
when the consumer requests the lowest cost for specific orders. [Refer to appendix]
In the absorption cost system, the variable costing is considered as the methodology which only
allocates variable expenses to inventory. This approach signifies that every overhead expense has
been changed towards costs within a specific period while the variable cost and direct materials
are assigned towards inventory. [Refer to appendix]
Application of proper management accounting techniques for creating financial reporting

documents
There are various management accounting techniques which are identified as process costing
system, job costing system, ABC costing system and batch costing system that helps the business
towards preparing documents related to financial reporting.
Job costing system mainly involved the process for accumulating the information regarding the
expenses which are associated with the particular product. The specific information might be
needed to creating the cost information for the customers within a particular agreement where
expenses are compensated.
Process costing system mainly accumulates expenses when the significant volumes of similar
units are produced. Within this specific situation, it is very important to accumulate expenses at a
collective level for huge product batch. Then it is allocated to the individual produced units.
ABC costing system is considered as the methodology for allocating overhead towards the items
which mainly utilises it. This particular system could be utilised in order to reduce overhead
costs (Wright, 2020).
6
Create a financial report

[Refer to appendix]
Planning tools used in the management accounting
Benefits and drawbacks of various kinds of planning tools for budgetary control
The capital budget is considered as the process that helps the organisation to determine as well as
evaluate the possible costs and investment which are significant in nature. The particular
expenses and investments mainly incorporate the projects, for example, new plant development,
or the long term investment in the venture. In many instances, the prospective life of the project's
cash outflow and cash inflow is examined so as to determine if the anticipated generated income
is fulfilling the adequate target benchmark or not. It is also known as the investment appraisal
process. This process helps the management to determine whether the particular project would be
productive for the organisation in the long run or it would be not beneficial. This particular
process helps in decision making for the financial manager in order to choose the most suitable
project which would be able to generate higher productivity for the business. The drawback of
the particular method is that it does not consider the current market scenario of the project in
terms of inflation, changes in interest rate.
An operational budget helps the business to determine the anticipated earnings and costs which is
mainly relied on the predicted sales profit within the specific period of time. The particular
procedure is mainly considered of a number of sub-budgets among which the sales budget is
considered as one of the most important sub-budget. This particular sub-budget is needed to be
prepared at the initial period of time. The main advantage is that the operating budget is
identified as one of the short term budgets. In this budget, the limitation is that the capital
expenditures are eliminated since they are identified as the long term expenditures
(Mymoneycoach, 2020).
The master budget is considered as a total budget of the organisation which is mainly prepared in
order to present an overall scenario of the businesses’ financial position and its health. The
particular type of budget mainly integrates various aspects such as operating expenses, sales, and
assets along with earnings. The main benefit of this budget is that it enables the organisation to
establish aims and objectives along with evaluating the business performance in the specific
7
period of time. The main drawback of this budget is that it is applicable only for the large scale
industries so that the organisation is able to align the various individual managers.
A financial budget is another type of budget which portrays the strategy of the business so that
they are able to manage their assets, income, cash flow and expenditures. The financial budget
also helps in establishing a clear picture of the financial performance of the business as well as
helps in depicting a complete overview of the business spending with reference to the profits
from the key operations. For example, the software organisation is able to determine their value
within their public stock merger or offering through the utilisation of financial budget.
Benefits
The budget of the business not only supports the representation of yearly expenditures but also
enable the management of the business to identify the cost beforehand. For instance, averaging
the business insurance premiums on a monthly basis will help the business to set an average goal
of monthly revenue. Therefore, budgeting is an exact proportion of money will help the business
to pay the premiums within the months when the due date arrives. Therefore it is most beneficial
to manage the cash flow in order to make sure that business has enough funds to meet the
payments. The budget also plays an important role in order to anticipate the yearly bottom line
through the utilisation of revenue scenario.
The budget also helps the management to track the performance of the business throughout the
annual period of time. It also enables the business to make essential changes to restraint the cost
or to develop their spending in order to take effective benefits of the prevalent development
opportunities. When the marketing and advertisement of the business are effective then a proper
creation of budget would help in analysing the availability of funds in order to develop the
marketing of the business for encouraging sales volume (Karmakar, 2018).
Drawbacks
The budget is mainly in terms of numeric therefore it mainly focuses on the quantitative factors
of the business rather than the qualitative factors. In other words, it can be stated that the purpose
of the budget is to either develop profitability or to encourage cost-effectiveness. However, the
customer does not bother about the profitability or the cost of the business rather their main
8
concern is to attain maximisation satisfaction. Therefore the budget does not consider the needs
and satisfaction level of the customers.
When the department is not able to achieve its budgeted outcomes then the department is more
likely to put the blame upon various departments which offer services. Since the department
relies on other departments therefore when the particular department does not attain supported
from the other departments then it more likely to bring up divergences among various
departments.
Planning tools usage and its application for forecasting and making a budget
The planning tools help the management to determine the budget. There are a number of tools
which provide a significant level of assistance to the manager of the accounts and finance
department in order to predict the future cash flow of the business. The number of tools is
analysed as the matrix diagram, tree diagram, affinity diagram, the activity network diagram and
process decision program chart (Thepeakperformancecenter, 2019). These planning and
management tools are jointly utilised by the business in order to take an effective decision-
making process. On the other hand, it also helps in adopting new solutions in the most effective
manner. When these tools are used in an individual manner it offers an organised and systematic
way to assess innovative ideas and decision-making processes. If these tools are collectively used
then they are more likely to offer a tremendously effective approach to solve the complicated
problems in a systematic manner which the business has to experience. Through the
incorporation of planning tools, the management of the organisation is able to prepare their
budgets, plan and forecast various aspects which help the business to establish additional
accurate financial analytics and reports. It also potentially directs the organisation towards
precise forecasting and able to generate profitability. When the business embrace analytics and
data in combination with the effective forecasting and planning practices then they are more
likely to encourage strategic creation of decision. The various practices and tools could be able to
save a significant proportion of time, minimise errors and encourage a disciplined culture in
management. It is very necessary to obtain true competitive benefits. The companies are capable
to update forecasts and plans with respect to the opportunities and threats prevalent in the
market. It also helps the management to determine the risk and the process through which they
can be mitigated (IBM, 2020).
9
Ways through which management accounting can be used towards financial issues
Compare the ways through which an organisation is adapting the management accounting
systems
Benchmarking is identified as one of the most important measures that help the management to
determine the performance of the goods and services of the business. The main aim of
benchmarking is to recognise the internal opportunities which the business can use for overall
development. It enables the business to set a specific standard as per which they are required to
create plan and strategies so that they are able to achieve the desired outcomes. The business is
also able to analyse the features of their product and can compare it with that of competitors.
There are mainly two different kinds of development opportunities which are identified as
dramatic and continuous. The continuous development is incremental which mainly involves
small changes to obtain sizeable advances. On the other hand, the dramatic enhancement can
only be obtained through reengineering the total process of internal work. The main advantages
of this approach are that it enhances the understanding of employees towards the internal
processes and structures. It also helps in developing cooperation and teamwork so as to gain
competitive advantages. It also helps the business to encourage its familiarity with desired
performance metrics as well as opportunities for overall enhancement.
Key performance indicators are one of the types of approach that management utilizes in order to
measure their performance. The organisation needs to select successful KPIs which is mainly
based on the proper understanding of the aspects which are vital for the business. The important
aspects need to be identified and understand by the management through the adoption of
different techniques for assessing the current scenario of the organisation along with their key
activities which are linked with the choice of performance indicators. These type of assessments
mainly leads towards the recognition of possible improvements. Therefore the performance
indicators were regularly linked with the initiatives of performance development. Through the
help of a management accounting system, the management is able to select their key
performance indicators. One of the most effective frameworks which could be used is identified
as balanced scorecard (NAP, 2015).
10
How management accounting can lead to sustainable efficiency by responding the financial
issues
The management accounting system is very important for attaining sustainable development
within the organisation. The accounting system can help the business in order to identify an
expense that the business is not able to meet efficiently therefore then the business can replace it
with another expense which can be meet successfully. Through adjusting the expenses within the
business the manager of the organisation can meet their both short term and long term debt
obligations in a more effective way. The management accounting also enables the accounts
manager to determine the costs or overheads which they can mitigate. The manager can easily
identify the expenses which need significant focus as they are rising at increasing rate. The
manager is able to meet those debt obligations by incurring more cash flow or to decline the
spending capability of the business. The business is also able to reduce their costs in such a
manner that the business does have to incur higher expenditure. The manager is also able to
encourage their spending awareness in such a way that it has the ability to determine which
aspects are worth to spend and which factors do not need a significant amount of expenses. the
accounting system also leads the business towards sustainable efficiency through maintaining
budget and cost planning towards solving the financial issues and prevent these issues. This
approach helps the manager to formulate a monthly plan for the spending capability so that the
business is able to meet the financial needs and requirements. The prevalent financial issues can
be mitigated when the business is able to prepare a report in which the business is able to
determine the cash outflow and cash inflow of the business. Through this way, the business is
able to identify the expenses and income in a particular period. Therefore it is easy for the
business to recognise whether they are able to meet their debt obligations through the availability
of earnings. Thus the business can determine the issue of increasing debt with insufficient
income. As a result, the manager can implement strategies either to enhance the income or to
decrease the cost. In such a way, the business would be able to determine its sustainable
efficiency in the long run. The business is more likely to incur stable or increasing revenue in the
long run. Therefore sustainability can be achieved within the organisation through mitigating the
financial issues. There are a number of tools which ensures sustainable efficiency of the
business which are identified as cash flow forecasting (GCFGlobal, 2020),
11
Planning tools solve the financial issues towards sustainable organisation efficiency
There are a significant number of tools which could be applied within the organisation in order to
ensure sustainable management process. One of the most important tools which the business can
utilise in order to meet the financial issues is through the budget creation. Preparing a budget is
one of the best techniques in order to solve financial problems. Budget is considered as the
monthly spending plan of the business funds. The budget helps the business to determine the
financial position of the business in the short term so that they can determine the financial
position of the business in the long run. The short term financial position can be determined
when the business is able to identify the proportion of debt with respect to the proportion of
income. The business is able to find the gap between the incomes that business would generate
through various sources and the liabilities that the business needs to meet in a specific period of
time. The manager of the accounts department would be able to determine the expenditure which
the business will incur within the specific period of time. The business is also able to identify
their financial priorities so that it can guide them towards incurring expenses which the business
is able to meet in the future. The business has to determine whether to go for equity funds or to
borrow funds from debt sources. If the management of the business has prioritized that they
would be borrowing more equity funds than the debt funds then they are more likely to maintain
a balanced proportion. The manager would also be able to put more emphasis on the equity funds
by issuing more shares in the market than borrowing funds from the financial institutions
(Accountlearning, 2016).
Conclusion
The report critically evaluates the management accounting systems along with their advantages
and disadvantages. The study also depicts the planning tools application for the creation of
budgets for the organisation. It has been observed that this management accounting and planning
tools are very important for solving the prevailing financial issues.
12
References
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Accountlearning.com. Available at: <https://accountlearning.com/tools-and-techniques-of-
management-accounting/> [Accessed 30 May 2020].
Cimaglobal, (2018). GLOBAL MANAGEMENT ACCOUNTING PRINCIPLES. [online]

Cimaglobal.com. Available at: <https://www.cimaglobal.com/Documents/Employer
%20docs/web%20pages%202016/global-management-accounting-principles.pdf> [Accessed 30
May 2020].
Deloitte, (2017). Management Accounting And Reporting | Deloitte CIS | Operations | CFO

Services | Performance Management. [online] Deloitte Azerbaijan. Available at:
<https://www2.deloitte.com/az/en/pages/operations/solutions/management-
accountingandreporting.html> [Accessed 30 May 2020].
Garcia, M., (2018). How To Prepare An Income Statement Under Absorption & Marginal
Costing. [online] Small Business - Chron.com. Available at:
<https://smallbusiness.chron.com/prepare-income-statement-under-absorption-marginal-costing-
80708.html> [Accessed 30 May 2020].
GCFGlobal, (2020). Money Basics: Financial Problem Solving Strategies. [online]

GCFGlobal.org. Available at: <https://edu.gcfglobal.org/en/moneybasics/financial-problem-
solving-strategies/1/> [Accessed 30 May 2020].
IBM, (2020). Planning, Budgeting And Forecasting. [online] Ibm.com. Available at:

<https://www.ibm.com/topics/planning-budgeting-and-forecasting> [Accessed 30 May 2020].
Karmakar, R., (2018). Management Accounting: Advantages And Limitations. [online]

yourarticlelibrary.com. Available at: <https://www.yourarticlelibrary.com/management-
accounting-2/advantages/management-accounting-advantages-and-limitations/65343> [Accessed
30 May 2020].
Mymoneycoach, (2020). How To Overcome 8 Kinds Of Financial Problems & Difficulties | My

Money Coach. [online] Mymoneycoach.ca. Available at:
13
<https://www.mymoneycoach.ca/blog/how-to-overcome-financial-problems-difficulties>
[Accessed 30 May 2020].
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[online] nap.edu. Available at: <https://www.nap.edu/read/13152/chapter/6#61> [Accessed 30
May 2020].
NAP, (2016). Applying Sustainability Tools And Methods To Strengthen Environmental

Protection Agency Decision-Making. [online] nap.edu. Available at:
<https://www.nap.edu/read/18949/chapter/9> [Accessed 30 May 2020].
Smith, S., (2017). Integrated Financial Reporting & Management Accounting An Opportunity

For Strategic Leadership. [online] Jbepnet.com. Available at:
<http://jbepnet.com/journals/Vol_4_No_1_March_2017/1.pdf> [Accessed 30 May 2020].
Sullivan, D., (2019). Types Of Managerial Accounting Reports. [online] Small Business -

Chron.com. Available at: <https://smallbusiness.chron.com/types-managerial-accounting-
reports-58384.html> [Accessed 30 May 2020].
Thepeakperformancecenter, (2019). Seven Management And Planning Tools - The Peak

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Toppr, (2019). Management Accounting - Definition, Objectives, Advantages, Limitations.

[online] Toppr-guides. Available at: <https://www.toppr.com/guides/fundamentals-of-
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14
15
Appendix
Marwa year 1
Using Marginal Costing Approach
ITEM Number of units £ P.U. AMOUNT £ AMOUNT £
SALES 3 000 92 276 000
MARGINAL COST OF SALES .. .. .. ..
OPENING STOCK 0 0
ADD: VARIABLE PRODUCTION COST: .. .. .. ..
Direct Material 3600 17 61200
Direct Labour 3600 11 39600
Variable Expenses 3600 7 25200
Total Variable Cost A 126000
Less: Closing stock at end of year 1. [Opening

stock units+units produced - units sold] find £
value. B 0+3600-3000=600 35 21000
Marginal Cost of SALES A-B 105000
Fixed indirect production cost 84000
Gross Profit: sales - MCOS -FIXED

PRODUCTION COST 87000
Selling and Distribution Overheads 5700
Admin Overheads 10500
Profit Before Interest & Tax (PBIT) 70800
16
Interest Expenses 1200
Probit Before Tax [PBIT-interest] 69600
Tax @19% 13224
Net Profit: profit before tax - tax 56376
Income statement for Year 2
SALES 4 000 92 368 000

OPENING STOCK 600 21000

Less: Closing stock at end of year 2.
[Opening stock units+units produced - 600+4100-
units sold] B 4000=700 35 24500

17
Probit Before Tax [PBIT-interest] 124550
Tax @19% 23645,5
Net Profit : profit before tax - tax 100 886
Income statement for Year 3

SALES 3 500 92 322 000
OPENING STOCK 700 35 24500
[Opening stock units+units produced -
units sold] B 600 35 21000
Interest Expenses 1700 96200
Probit Before Tax [PBIT-interest]
Tax @19% 18278
Net Profit : profit before tax - tax 77922
Income statement for Year : 1
18
Using Absorption Costing Approach
Numbe
r of
ITEM units £ P.U. AMOUNT £ AMOUNT £
SALES 3 000 92 276 000
MARGINAL COST OF SALES ,…….. ………. ………..
OPENING STOCK 0 0
ADD: VARIABLE PRODUCTION COST: ………… ……… ………..
Total Production Cost A 210000

[Opening stock units+units produced
- units sold] use formula to calculate
amount. B 35000
Cost of SALES : A-B: 175000

Gross Profit: Sales - Cost of Sales : 101 000
Admin Overheads 10500 16200

Profit from operations Before
Interest & Tax (PBIT) 84 800
Probit Before Tax [PBIT-interest] 83 600
Corporation Tax @ 19% 15884
Net Profit 67 716
19
Numbe
r of
SALES 4 000 92 368 000




amount. B 700 38841,46341
Cost of SALES : A-B: 223658,5366

Corporation Tax @ 19% 23729,37805

Net Profit 101 162
20
Numbe
r of
SALES 3 500 92 322 000
amount. B 600 35823,52941
Cost of SALES : A-B: 206017,4706
Corporation Tax @ 19% 18369,68059
Net Profit 78 313
21

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Submission Front Sheet

Assignment Code: RQFBM-MA0502051

Programme: BTEC Higher National in Business (RQF)

Student’s Name: Zbirciog Daniela

Learner’s statement of authenticity

Student’s Name: ___Zbirciog Daniela____Student’s ID Number: ____25113________

Signature: ___________________ Date: ___/_june_/_2020__

Is this a First Submission or Second Submission ?

Word Count (max.5000)

Management accounting system

Management accounting and requirements of various kinds of management accounting

Various techniques for reporting management accounting

Advantages of management accounting system

Assessing the integration of management accounting reporting and management

Management accounting methods

Cost analysis techniques for preparing profit and loss statements

Application of proper management accounting techniques for creating financial reporting

Create a financial report

Planning tools used in the management accounting

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Using Marginal Costing Approach

ITEM Number of units £ P.U. AMOUNT £ AMOUNT £

SALES 3 000 92 276 000

MARGINAL COST OF SALES .. .. .. ..

ADD: VARIABLE PRODUCTION COST: .. .. .. ..

Direct Material 3600 17 61200

Direct Labour 3600 11 39600

Variable Expenses 3600 7 25200

Total Variable Cost A 126000

Less: Closing stock at end of year 1. [Opening

Marginal Cost of SALES A-B 105000

Fixed indirect production cost 84000

Gross Profit: sales - MCOS -FIXED

Selling and Distribution Overheads 5700

Admin Overheads 10500

Profit Before Interest & Tax (PBIT) 70800

Interest Expenses 1200

Probit Before Tax [PBIT-interest] 69600

Tax @19% 13224

Net Profit: profit before tax - tax 56376

Income statement for Year 2

Using Marginal Costing Approach

ITEM Number of units £ P.U. AMOUNT £ AMOUNT £

SALES 4 000 92 368 000

Direct Material 4100 17 69700

Direct Labour 4100 11 45100

Variable Expenses 4100 7 28700

Total Variable Cost A 164500

Marginal Cost of SALES A-B 140000

Fixed indirect production cost 84000

Selling and Distribution Overheads 7500

Student’s Name: _Zbirciog DanielaStudent’s ID Number: 25113______

Signature: _________________ Date: _/_june_/_2020__