1.

The nature of management accounting information

According to ICMA (2022), a recently incorporated definition, " The presentation of accounting
data for use by management in decision-making and day-to-day operations of a business is
known as the management accounting."

All management accounting information must be relevant, predictive, and confirmatory to users
in making and evaluating economic decisions (Kenneth, 2018). Information is vital if an
omission or misrepresentation of information could influence decisions. To be useful,
information must be relevant to the user's decision-making needs. Quality information influences
users' economic decisions by assisting them in evaluating past, present, and future events.
Another distinguishing feature is that readability is critical to the quality of financial statements,
which helps readers understand and display the information management seeks (Kayode, 2015).
Furthermore, the notification must be of reliable quality, represent the transaction's honesty, and
be neutral, prudent, and complete. The comparability feature allows users to see and understand
similarities and differences between items. The information is more valuable if the data in one
company's report can be compared with data from other companies or periods within the same
company (Sheila, 2021). Distinctive characteristics make the information in financial statements
applicable to users. Furthermore, the last two features, verifiability, and timeliness allow
financial statement readers to verify accurate information and read it in time to make their own
decisions (IASB, 2006).

Management accounting should be used for accounting practices whose outcomes must be met
before making or implementing any decision (Amara, 2017). Internal and external factors
influence the organization's MAP change. Firms increase the factors that affect management
accounting practices as volume increases (Davilla, 2007).
A. Internal sources:
Accounting records are used to plan for the future by detailing a company's past transactions and
financial events. Accounting records can provide information other than financial data
(Nishimura, 2005). Regular meetings between DAG employees and management will help them
exchange relevant information while working, boost productivity, and make appropriate business
decisions. Viewing a list of all expenses and the manager’s influence on DAG's net income is a
terrific way to cut expenditures and reallocate spending where it is most required. Analysis of
balance sheets, income statements, and cash flow statements can help managers comprehend the
intricacies of a company's finances while providing a larger picture to guide them with goal-
setting and decision-making. Furthermore, DAG reviews detailed profiles of each worker
recruited into the company regarding skills, experience, training duration, and salary received
through the payroll system using personnel data. Detailed information on plastic products
manufactured and delivered from the factory can provide helpful information on whether quality
standards are met (Nguyen, 2016). Data from customer sales invoices are analyzed to provide a
record of what and when it was purchased.

B. External sources:

External information from outside the organization is more relevant to strategic and tactical
decisions than operational decisions. External sources provide a wealth of information that is
easily and quickly gathered (Catherine, 2020). Obtaining information via the internet is relatively
inexpensive. This material's accuracy, however, cannot be guaranteed. Furthermore, government
publications (such as monetary policy) assist businesses in collecting and processing
management accounting information (NES, 2022). Many databases maintained by government
agencies and businesses also contribute to the information collection, for example, by providing
online information on money market interest rates and foreign exchange rates. Numerous reliable
external sources of information, such as technical journals and correspondence from suppliers,
customers, and tax authorities.

Dong A Group is constantly updating and studying financial statements from competitors (Duy
Tan Plastics Production Joint Stock Company, Viet Nhat Plastics Production Company
Limited,...). A thorough examination of rival companies' financial statements will provide an
overview of their revenue, market share, strengths, and weaknesses. Furthermore, the competitor
analysis report provides market and industry information. Market Research can assist DAG in
gathering customer file characteristics, identifying growth opportunities, and realizing industry
trends from which to make business and marketing decisions. It also enables DAG staff to
prepare for changes that may disrupt the market.

Accounting data is used for a variety of purposes, including management decisions. It aids in the
transmission and communication of financial statements to shareholders. The reports are then
used to make informed decisions for the company's benefit.

A report is a formal document that details a business or related event while focusing on the
essentials. It is used to send data from one staging area to another or from one organization to
another to aid decision-making or problem-solving (Petryni, 2019). Reporting allows managers
to control activities and take corrective actions by monitoring an organization's operating
procedures. Reports can also be used to evaluate employee performance. However, the report can
sometimes be misleading, making some information difficult for users to understand.
Tables allow quick and easy reading of the problems displayed in rows and columns. Tables
convey a large amount of information and communicate benefits and risks to a wide range
of audiences (Le M, 2020). Structured tables can help improve the decision-making process's
consistency and clarity. Good tables reduce the cognitive load on the user and the time it
takes to extract information. Tables are sometimes thought to contain a list, which can give
the wrong impression of a benefit-risk balance because people tend to view a drug with a
long list of risks as having a benefit-risk
balance without taking actual quantitative
data into account.

Diagrams are pictures, photographs, or sketches that aid the reader in comprehending what is
being described in the text (Liberati, 2009). Diagrams have specific components to help the
reader understand them and the text. Diagrams can be used for different reasons, such as to show
part of a whole, steps of a process, and relationships. The diagram's visual impact compels the
viewer to consider the state of the statistics. It facilitates data comparison by visualizing reality in
front of the observer. Graphs
represent data collection in a way
that allows the user to understand what
they mean quickly.
A graph that "represents data using symbols such as bars in bar graphs, lines in line graphs, and
slices in pie graphs" is referred to as a chart. Charts provide a variety of information by
representing tabular numerical data, functions, or quality structures (Apoorva Jain, 2202). It
assists researchers in identifying patterns and
trends in data that are difficult to discern from
statistical results. They are objective and are
frequently regarded as a straightforward method of
producing results.

In the context of Dong A Group

In case of Dong A Group, company should use the chart, especially the bar chart for each
element of information to compare the tendency and the reality of 3 retailers in the Southern
area.
Management accounting information can help organizations in a variety of ways. To begin with,
the financial statement information will allow internal and external users to make educated
decisions about business investment (Kayode, 2015).

External users include suppliers, customers, the general public, competitors, lenders, and
investment analysts. The raw material suppliers of the company are concerned about the
company's liquidity. Suppliers will be concerned with the company's bottom line as well. A
profitable and expanding business will require more raw materials and other supplies. This will
assist suppliers in increasing revenue and sales. Financial information is valuable to investors
because it provides helpful information about income, expenses, profitability, debt burden,
earnings per share, price-to-earnings ratios, and capabilities (Derva, 2019). Other asset
repayments, as well as short- and long-term financing duty to forecast investment rate Financial
statements will be required by legal entities lending to institutions to estimate the borrower's
ability to repay all loaned funds and related interest. This will be determined by the company's
ability to pay, as shown in the statement of financial position. Company guarantees on specific
assets may also be used to secure long-term loans. The value of these assets will be disclosed in a
company's financial statement (Suomala P, 2018). The government department of the company
will require financial statements to ensure that the company pays taxes correctly and complies
with government rules, regulations, and laws.

Shareholders, directors/managers, and employees considered insiders participate in the

company's continuity and long-term strategic planning. Senior executives and other managers
rely on accounting to accurately assess the impact of corporate decisions by using management
accounting information disclosed in financial statements (ICSI, 2012). They should examine
financial statements to address corporate governance issues to assist businesses in growing
sustainably. Inventory levels, profit margins, and asset or liability structure are all critical to
business stakeholders. Company shareholders should consider net profit (or loss), dividend
payout ratio, forecast future dividends, or shareholder equity statement. When making equity
investment decisions, the fairness of their investment returns or comparing their equity and
equity with other shareholders (Trotman K.T, 2014).

They must be able to track the impact of their efforts on the company's bottom line as managers.
Understanding a company's history and financial health is critical when budgeting must go hand
in hand with forward-thinking, so management accounting information is beneficial for planning
and budgeting (Chenhall R.H, 2003). Managers at DAG, for example, use management
accounting data to motivate and engage groups of employees. Accounting data on the income
statement can demonstrate how employee projects positively impact a company's revenue, which
can improve and enhance its performance.

M1: Strengths and weaknesses of MAI

The role of management accounting information in supporting decision-making in 4 areas:

(1) Develop long-term plans and strategies

DAG must bring together data from different parts of the business to provide the foundation
businesses need to make decisions to use management accounting information for growth
planning. The company must also investigate costs and potential markets to accurately assess
how DAG's new business ventures can pay for themselves and in what timeframes. The company
promotes marketing activities in order to market its brand and products (Hall M, 2010).
Implement a quality policy for customers to sustain and grow the brand and market share. To
gain access to a larger international market, use all available resources, and promote external
activities, joint ventures, and collaboration with foreign partners.

(2) Evaluation of operational efficiency

Because tax authorities are interested in the company's overall sales figures as a basis for the
company's tax reports, management accounting information also helps businesses like DAG
understand sales data. This information, however, has far-reaching implications for the DAG
company's profit-making potential. The company will have helpful information to increase sales
and improve its bottom line after identifying its strongest sellers and understanding why they are
so successful. DAG can identify seasonal variations, spikes, and changes at different retail
locations by tracking each product along time and place.

(3) Allocating resources

Management accounting information will display the company's financial results, allowing the
company to identify and plan the allocation of company resources (Sean, 2018). Managers can
effectively match demand with resources based on the enterprise. DAG's resources, availability,
and business goals are to be achieved. DAG must ensure that employees are always available:
their experience, performance on previous projects, and area of expertise. Knowing which
projects are most likely to overrun allows DAG to efficiently DAG budget to avoid this
efficiently. This necessitates the DAG compiling and documenting information at each stage of
the process.

(4) Determining cost and benefits

The company strictly manages costs, ensuring effective capital utilization; improving financial
capacity; and ensuring continuous, stable, and solid growth. Management accounting data can be
used to determine how and when to develop a DAG business (Nørreklit H, 2015). These
decisions take into account all sales, expense, and cash availability data and the DAG
management team's ability to understand and process the numbers available to make a successful
phone call. The fact that DAG requires additional funds does not necessarily imply that DAG
should invest in a new product or market. DAG may need more funds to make this change, or
DAG may need to comprehend what DAG's customers want or require fully.

Weaknesses:

Management reporting takes a long time. Managers cannot report daily management, and it takes
time to make decisions based on management reports (Tillmann K, 2008). For example, budget
and actual comparisons are made for operational review every quarter. Corrective actions can
only be taken based on this management report for the future quarter. Due to a lack of
communication between managers and accountants, cost accountants continue to prepare routine
reports.

In contrast, managers need to receive the information required to make decisions. Expense and
income records are used to create cost and management accounting reports (Gheorghe, 2018).
DAG's primary focus is on numbers, but non-financial data is also essential and is frequently
overlooked by such statements. For example, the report mentions budgeted sales for the next
period. Still, it does not note that meeting them is highly dependent on customer satisfaction and
the execution of certain marketing campaigns.

Since estimation and cost norms have yet to receive the proper attention, production planning
lacks initiative and largely depends on partners. Cost information has not helped choose the best
production options because DAG has yet to conduct the cost-volume-profit analysis (CGMA,
2013). DAG still needs to evaluate how well each of its divisions is performing. Cost
management accounting has received little attention. The system and books are still very
rudimentary, primarily using detailed financial accounting books.

2. The significance of MAI in DAG

Management accounting information is considered a crucial component of internal and external

stakeholders' decision-making processes because it offers a clear picture of business performance
(Fajarini et.al, 2019). Managers can understand and assess each store's performance using the
financial metrics in three comprehensive store reports (MAI) and then reward the store
accordingly. Store C, in particular, did a fantastic job with mental lift. Additionally, managers
can give underperforming affiliates the assistance they need by, for instance, postponing supplier
payments through vendor negotiations or offering training necessary for branch expansion
employees. Managers can also use the financial information in reports to manage day-to-day
operations and establish a foundation for the company's financial health. The information lists
various cost items to analyze changes in production and business costs (David, 2005). On MA
reports, specific DAG selling and administrative expenses for each product produced and sold
are displayed. Still, they need to be broken down into variable and fixed costs. According to
accounting data, if the basis for charging regional office fees at 3 stores is not distributed fairly,
it could impact the business's capital revenue. However, DAG should allocate $9,000 for area
recharges from the data-based average office cost. DAG seeks to overcome limitations in
management accounting data exchange with stores, and regular and periodic reporting is required
to ensure internal business operations. Administrators can use it to adjust the business's resource
allocation as needed to ensure effective operation. Managers can effectively manage costs and
avert issues for various expense items. However, due to the quantitative nature of the data, MA
reports do not give a view of non-numerical data, such as inventory turnover, leaving
management with zero understanding of the situation at the company and how it will affect the
decision-making process (Nahapiet, J, 2020). Standard annual reports can also make it too late to
fix issues with cost allocations and other issues, leading to management issues.

- Financial performance measures

Financial performance assesses a company's financial health using assets, liabilities, revenue,
expenses, equity and profitability, leverage, and market value company (Dheeraj, 2022). A
company's financial performance reflects its ability to manage its finances. Based on the
analysis, businesses develop strategies to improve capital structure, increase revenue, improve
cash flow, and reduce costs.
After subtracting the cost of goods sold, the percentage of sales is calculated as gross margin
(Investopedia, 2021). The direct cost of production, excluding all operating expenses, interest,
and taxes, is the cost of goods sold.

Gross Profit Margin = (Revenue - Cost of Sales) / Revenue * 100

Liquidity is the speed at which an asset can be converted into cash. Therefore, assets that can be
quickly sold for cash are considered highly liquid (and vice versa for investments with low
liquidity) (Fajarini et.al, 2019).

The current ratio assesses a company's ability to meet its short-term obligations. The current
balance considers all current assets that can be converted into cash within a year and all current
liabilities with one-year maturities.

Current Ratio = Current Assets / Current Liabilities

The manager of an investment center is in charge of both investments and profit centers. Two
measures of departmental performance are commonly used:

- Non-financial performance measures: quantity measures, quality measures,

balanced scorecards, and benchmarking.

The quantifiable outcomes of particular business decisions and activities are known as
quantitative measures. Comparing performance using quantitative metrics is frequently a
trustworthy way to evaluate various aspects of your company, including various methods for
handling various products, departments, and even challenging business issues (Christopher,
2000).
The Balanced Scorecard is a collection of balanced metrics used by an organization to motivate
employees and measure performance. These metrics are classified into four categories: financial,
internal business processes, learning and growth, and customer satisfaction (Kaplan, 2020).
Companies can improve their overall strategic alignment by utilizing BSC (Matuszek, &
Schraeder, 2015).

Measuring quality assists an organization in identifying weaknesses, highlighting opportunities,

and determining what works and what does not to improve quality (Investopedia, 2021).
Measuring service quality in business is difficult because services are frequently intangible and
difficult to quantify. Quality is measured in service organizations using the following criteria:
dependability, acceptability, competence, communication, and integrity.

Benchmarking is defined by the Official CIMA Terminology (2013) as "the establishment,

through data collection, of objectives and comparators that enable the determination of relative
performance levels (and, in particular, inefficient areas)." Using the best practices identified
improves performance. Benchmarks assist organizations in accelerating and managing change,
enabling process improvements, and demonstrating that performance goals are reachable
(Colin.D, 2018). It also enables the business to concentrate on its external environment and
obtain the most accurate performance insights.

3. Analysis and interpretation of the quantitative performance data as follows:

The three stores' sales activities are nearly equal in terms of sales. Concerning turnover, store A
comes in second with £450,000, shop B with £480,000, and shop C with £420,000. Shop C,
however, demonstrates effective cost allocation or a trustworthy source of supply at a fair price
in the COGS section. Although Shop A and Shop B both have relatively high COGS of 79% and
74%, respectively, their COGS outweighs the two stores.

Additionally, store A has an insufficient production capacity. Its loss ratio, which accounts for
1.11% of sales, is much higher than that of stores B and C, which are each 0.83% and 0.47%,
respectively. Shops A and B are in charge of operating profits that are 23.5% higher.

1.1 Cost of Goods Sold

85.00%

80.00%

75.00%

70.00%

65.00%

60.00%

55.00%
Shop A Shop B Shop C Total

Table 1.1 shows the accounting information for the three stores, including the costs: turnover,
cost, cost of goods sold, and wastage. The cost of COGS is prominently displayed in the
expenses.

According to the data in the table, shop A has the highest proportion of COGS, which is also
more significant than the three stores' COGS to total revenue ratios. DAG's regional target is
69%, and shop A's percentage achieved is also higher than the target. Similarly, shop B has the
second highest COGS (after store A) at 73.26%, which is more than 4% higher than the original
target.

It demonstrates that shop C has the best COGS compared to shops A and B because low
efficiency means that plastic production costs are not high. Shop C also has the shortest cost of
goods sold. As a result, the ratio of total selling expenses to DAG sales in the South region is still
less than 4% higher than in the rest of the area. Shop A and B may have high COGS for various
reasons, including imported plastic materials that must be put up to standard. This could be due
to poor DAG supplier material for business. Furthermore, the high cost of COGS may be
because the managers of shops A and B could not perform their good management abilities,
resulting in the store having a lot of inventory.

DAG's manufacturing divisions in the South region, namely Shops A and C, require cost-cutting
and revenue-growth strategies. DAG needs a leadership training session for shop A and B staff.
Besides, the two stores must actively research the market and learn about changing suppliers to
be compatible with in-store production. To avoid loss and risk in the management of goods, the
store needs to invest in security equipment to increase the security of business operations at the
two branches.

1.2 Salary and Wages

7.40%
7.20%
7.00%
6.80%
6.60%
6.40%
6.20%
6.00%
5.80%
5.60%
5.40%
Shop A Shop B Shop C Total
The three stores are similar in that the employee salary-to-revenue ratios exceeded the original
target of 6%, with shop C paying and rewarding the most in the stores with a balance of up to
7.12%.

According to the salary and wages tables of the three companies, shop B has the lowest
percentage of employee salaries. This demonstrates that Shop B has paid employees minimum
wages and bonuses to maximize business profits.

All three stores have demonstrated effectiveness in managing payroll expenses, mainly when
these expenses are incurred on a sales basis, with payroll expenses spread across the target. Store
A appears to be not profitable because its operating profit falls far short of both Stores B and C
with a profit margin of only 11.3% and also falls far short of the planned target of 20%. This
demonstrates that store A has an unreasonable cost allocation, particularly the cost of goods sold,
resulting in poor business income. This implies that the salary for employees of shop A is lower
than that of the other two shops. Shops A and B may have lower sales than Shop C due to a lack
of professionalism on the part of the store staff in introducing and persuading customers to buy
products. One solution for two shops, A and B, to improve employee salary and bonus increases
is to re-equip employees with sales skills. The HR department will develop new salary and bonus
policies to encourage employees to achieve good results and obtain KPIs.
 1.3 Heat, light , cleaningand other overheads
2.00%

1.95%

1.90%

1.85%

1.80%

1.75%

1.70%

1.65%

1.60%

1.55%
Shop A Shop B Shop C Total

The graph depicts a range of heat, light, and other costs. It can be seen that shops A, B, and C all
have percentages of 1.69%, 1.77%, and 1,95%, respectively, which are all less than 2% of
DAG's initial target. This is a positive result because it shows that all three stores will incur
significantly few additional costs, which are less than the original target of 2%.

For manufacturing enterprises like DAG today, maintenance cost planning aims to increase the
availability index and reduce direct maintenance costs. The main reason is that enterprises
producing fields such as steel, plastic, etc., have to bear money related to maintenance work,
called shutdown costs. Only a few businesses are interested in this cost. Still, the time the
machine and line stop working causes hourly damage. This amount, if not the industry, actively
stops the machine, but due to the unintentional, it's enormous.

Therefore, the first essential thing is that the 3 stores need a business maintenance plan to reach
the investment goal, so the total maintenance cost is minimal. To be able to change and optimize
this cost, in addition to rearranging the preventive maintenance plan, the 3 shops must also
approach and change their maintenance work, switching from the manual method to a software
solution to manage equipment maintenance to automate maintenance tasks and minimize costs.
 Operating profit/ turnover
25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
Shop A Shop B Shop C Total

Each shop's operating profit is subject to uncontrollable costs distributed from the southern
region, specifically local office recharges. The area recharge cost cannot be decreased or
increased because the three shops do not directly use it. The other allocation cost, which allows
itself from the top down, is not the central responsibility allocation cost for the three shops. Since
management has no control or input regarding this expense, it cannot be managed. In actuality,
the majority of fixed and overhead costs are unavoidable expenses. As a result, the three shops'
operating profit decreased without any intervention from the company. Management has no
control over uncontrollable expenses. The managers' or the employees' actions cannot impact
them.

From the data in the table above, shop C achieved the most significant proportion of revenue
among the 3 stores, at 23.54%, exceeding the initial plan set by DAG of 22%. This number
shows a positive sign about the business results of shop C (the highest of the 3 shops). The other
two stores, shop A and shop B, have a much lower turnover rate than shop C (11.32% and
16.57%) and failed to meet the set target of 22%. An inefficient operation in the business process
caused the two shops to have relatively low and unsatisfactory revenue results.
DAG uses management accounting techniques to assess a company's financial health based on
profitability, revenue, or liquidity. These are primarily financial performance measures. In terms
of the competitive environment in the plastic industry today, over 2,000 plastic enterprises are
operating in Vietnam, with major players such as Tien Phong Plastic Joint Stock Company and
Binh Minh Plastic occupying the market (Vietnam Plastics Association, 2022). If financial KPIs
are insufficient to measure customer satisfaction or retention, DAG should combine them with
non-financial ones. By measuring customer satisfaction through face-to-face or online surveys,
DAGs can understand where customers are satisfied and dissatisfied with a product and identify
strengths and product weaknesses. The goal is to quickly develop strategies to retain customers
and improve its products' quality to compete with competitors. The retention rate shows that
DAG has lost customers for a long time since its inception. Hence, DAG quickly builds a
strategy to win back lost customers from competitors.

Furthermore, benchmarks are a type of management accounting information that is extremely

useful for businesses and DAGs. Companies can understand their position in the business market
and use internal benchmarks to self-assess their performance over time when the DAG uses
competitive benchmarks to compare against competitors (Anjali, 2018). As a result, it assists the
DAG in developing appropriate improvement strategies to increase competitiveness and promote
the company's development. It means losing your individuality and uniqueness. DAG requires
highly experienced and skilled personnel, which is a standard limitation. This raises the cost of
training and makes it more challenging to apply. Furthermore, when it comes to development,
customers assess their time and ability to create new products that better suit our needs.

Businesses benefit from the vast market demand of the plastic industry due to social factors, so
the final products of the plastic industry are used in many areas of life and society. The global
trend is toward using environmentally friendly plastic products because protecting the
environment protects users' health (Vietnam Plastics Association, 2022). DAG uses critical non-
financial performance indicators, such as the capabilities of its internal manufacturing processes,
to determine whether or not its manufacturing divisions are supplying its customers with plastic
products or plastic sheets made of environmentally friendly materials. This enables us to quickly
change internal processes and provide products that meet the needs of today's society to our
customers. DAG also assists in measuring the cycle time, quality, productivity, and cost of
internal manufacturing processes by utilizing internal aspects of the Balanced Scorecard.

Because the plastic industry must import 90% of its input materials due to economic factors,
import prices frequently fluctuate in response to global oil prices. As a result, the exchange rate
influences the input costs of businesses (Vietnam Plastics Association, 2022). DAGs should pay
closer attention to financial metrics such as the cost of goods sold and how input costs rise and
fall. We must also monitor the price of goods sold ratio to determine how much DAG must
spend to generate VND 100m in revenue. DAG can also take quick actions to confirm that
COGS is too high, such as: In today's challenging economy, the financials of the Balanced
Scorecard assist DAGs in estimating cash flow achieved, revenue growth, or market share.