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    Management Accounting Assignment Help

    Management Accounting Assignment Help


    Executive Summary

    The report has assessed the financial strength through the tool of accounting present in the management of Jaguar Land Rover. The growth of economic status has been evaluated through the management accounting process. The financial condition of Jaguar Land Rover has been assessed with the help of the accounting tools is provided in the report. Different planning tools help organisations to achieve an effective strategy for the budgetary plan with estimated planning. It increases the performance of the company. It also helps in measuring the performance of the employees to acquire effective growth. 


    The report has provided an analysis of the management accounting for Jaguar Land Rover to assess their financial strength. Management Accounting has been one of the management analytical tools for any organisations for increasing the growth in monetary status. It provides the role of the management and technique for analysing the financial condition of the company. The report has reflected the benefits of using management accounting along with the process of implementation for the company. It provides a way to eliminate the financial problem from the company effectively.

    Activity 1

    Part A

    Explanation of Management Accounting (P1)

    The advancement of technology has manifested a continuous change in the accounting system as well as other aspects of life. The methods of creating a report of management through analysing the accounts of any companies accurately with the period can be termed as the management accounting. It provides statistical information which has been required by the managers for evaluating the short-term and long-term decision. It provides both financial accounting reports that analyse the external stakeholders; however, it has reflected a weekly summary of the organisation's internal stakeholders. The report generally shows the current financial status of any companies such as cash, sales revenue, debts and other inventory. As suggested by Messner (2016), the concept of management accounting has accepted as tools of the manager to assess the company’s financial report to understand the current state it and creating an easy way for decision-making process. In order to sustainability in the market, companies have been shifting from the traditional accounting system to the modern management accounting system. It provides the information of both internal and external stakeholders to forecast the organisation's inventory management for the value position of it in the market. The tool helps in tracking the status of the stakeholders for identifying most efficient of them for the betterment of the organisations.

    Jaguar Land Rover has implemented the management accounting system which has been controlled by Joshua Lee. He possesses the skill of management accounting form the CIMA (Chartered Institute of Management Accountants). The management accounting has helped the company to assess the current matrix and value position in the market. The accounting tools have helped to assess both financial data and non-financial data for the present and future prospects of the business. It has often contributed to identify the risk prevails in the organisation and mitigate through quick decision and planning of operational development. It analyses the cost and periodic cost along with constraints analysis for the organisation.

    Essential requirements of different types of management accounting systems (P1)

    The main purpose of the management accounting system is to provide relevant data to the managerial department for creating a suitable decision-making process. As suggested by Schaltegger and Burritt (2017), there have been various parameters which should be measured by the managerial department to prepare a report for the decision-making process. The essential requirement has included the following parameters which should be assessed by Jaguar Land Rover: 

    Organisation Structure: The organisational structure plays an important role in the company to implement effective managerial accounting. The functional structure has helped the company to acquire better management for it and increasing value position.

    Management Style: The management style followed by Jaguar Land Rover is democratic, which provides every employee with an equal chance to be part of the managerial decision. It helps the company to assess most effective management accounting process. However, it should try to improve the style and accumulate more employees for achieving the goal.

    Reliability of the data: The security of data has been analysed in the management system to acquire better information regarding the company. Moreover, it has been identified that Jaguar Land Rover assesses the source of the data to analyse its reliability. In a further instance, the data has been protected for securing the internal matter of the management.

    Cost Systems: In order to identify the importance of the accounting system regarding its application, the analysis of the cost has been essential. As suggested by Nitzl (2016), it would provide better management system for the company. However, the cost analysis has been performed by the company to understand the area for improvement in their accounting system.

    Explanation of the different methods used for management accounting reporting (P2)

    Methods of management accounting have been a central system which enables the management for acquiring better decision by uses of private information. Different types of techniques used for the reporting purpose has been provided as follows.

    Budget report: This report has reflected the actual performance of the company and the estimated performance. It provides the standards of the performance which has been focusing on the revenues and expenditures of the company. According to Cooper et al. (2017), it helps in scrutinizing the operation of the organisations to analyse the default in their management. Jaguar Land Rover has been helped by the budget report to assess effective result for their performance. 

    Graphical report: This report provides the use of graphical tools to assess the current status of the company. It has been analysed the internal performance of the company. Scatter graph, line graph and pie charts are the tools for creating graphical report in the management accounting. 

    Accounts Report: This report has provided information about the company's client base along with the amount of collection. It contains amounts which help in identifying the barriers in accounting management.

    Inventory report: Use of inventory report has provided Jaguar Land Rover to assess the stock of inventories. As suggested by Johnstone (2018), it has also provides the labour cost, overhead cost and material cost. The management of the company possesses information about the metrics and provides an assessment of the current status of the company.

    Income Statements: The income statement format has separated the fixed and variable cost from each other. The separation has helped the management to overview the expense of volume. It has been necessary for gaining inventory cost-effectively. Jaguar Land Rover has been helped by these methods as it provides a suitable decision for increasing the stock and inventory of it.

    Cost report: Companies such as Jaguar Land Rover deals with the various project in one time. As suggested by Kihn and Ihantola (2015), the revenue collected by the company should be recorded in a report structure which can gather crucial information for the company. Management Accounting has been helped by the cost report to provide vital information for the company.

    Benefits of management accounting systems and their application (M1)

    In the present era, management accounting has been the internal part of organisations. It helps the organisation in various ways to assess their growth in the market. Some of the major benefits have been provided below.

    Maximisation of the profit: The tools deal with the cost analysis for an organisation. It provides most cost-effective strategy for Jaguar Land Rover which provides maximisation of profits and increases the revenue eventually. It helps in mitigating low-cost strategy with higher income to gain higher benefit. 

    Communication and coordination: It mitigates communication process among the management and employees of Jaguar Land Rover to achieve the goal of the organisation. According to Wang et al. (2019), it provides better coordination and team collaboration among the employees. 

    Responsibility: Management accounting tools provides the managerial department knowledge about their responsibility and distributes the task among the management of Jaguar Land Rover. This increases the ability of the company for managing cost, revenue and profit. 

    Capabilities: The tools help in assessing the skills of the organisation which provides opportunities for the managerial department to procure the most fruitful way to achieve their growth and advantages in the market.  

    Progression in business: Management Accounting has provided Jaguar Land Rover to create continues production which progressively leads the company. It also provides the estimation of the production cost of the next year or future. As suggested by Maskell et al. (2017), this would provide an effective strategy for the organisation to gain a competitive advantage in the market. 

    Critical evaluation of the integration of management accounting systems and management accounting reporting (D1)

    Management accounting has been one of the analytical processes which provide accurate information for Jaguar Land Rover. It helps in assessing effective decision-making process and risk management process that increases the capabilities and profit margin of Jaguar Land Rover. On the other hand, it has been analysed that the operational process of the organisation has been compared with action of finance. It procures the prediction of the production and result for the betterment of the organisations. According to Appelbaum et al. (2017), it has mitigated an effective method for the employees of Jaguar Land Rover to motivate for a better output. It defines the performance of the organisation along with the way for enhancement. 

    The management accounting practice aims to improve the decision-making process for various organisations. The process helps the management of Jaguar Land Rover to assess a suitable method for decision-making. As suggested by Laudon and Laudon (2016), it provides direct focus on the relevant areas which enables to achieve appropriate decision. However, the application and function of the management accounting system have moved effectively. In recent times, the process has been implemented in various organisations. On the other hand, the process has been complicated and requires expertise in multiple fields. Moreover, it provides an increment in the cost of labour for an organisation which creates problem for Jaguar Land Rover to implement it in effective ways. Furthermore, it provides limited options for the management system for the organisation. Therefore, implementation of the management accounting might not be fruitful. On the contrary, the company acquire diverse expertise which has helped to achieve efficient strategy for management accounting for the organisation. 

    Part B

    Calculating the costs using appropriate techniques of cost analysis for preparing an income statement using marginal and absorption costs (P3, M2, D2)

    A.Marginal costing: Period 1

    In marginal costing, variable cost is assumed as production cost. On the other hand, in the absorption cost variable as well as fixed cost is taken as product cost. 

    In marginal cost variable cost is assumed as the cost of production and fixed cost is taken as periodical cost. In absorption cost, both fixed and variable cost is taken as product cost. In marginal cost is done by using profit volume ratio and in absorption cost, the profit is reduced because the fixed cost is considered as production cost. In marginal cost opening and closing stock does not make any difference in the cost of each unit, on the other hand, the cost of each unit is changed because of opening and closing stock. 

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