Scenario and activity:
You are an accountant clerk for a medium-sized enterprise in the manufacturing sector. You can select an organisation of your choice or use your own place of work (if appropriate). In an effort to promote understanding between different departments in the organisation, you and your colleagues have been asked by your line manager to prepare a report on the role and function of the management accounts department, covering the management accounting systems operating in the organisation as well as the range of techniques used.
The report should include:
1. An explanation of the principles of management accounting.
2. The role of management accounting and management accounting systems.
3. The use of techniques and methods used in management accounting by presenting calculations for an income statement using marginal and absorption costings to show how these financial reporting and statements support business growth and success.
4. Evaluation of how management accounting is integrated within the organisation.
5. The benefits of the function to the organisation.
6. Conclusions that critically reflect the application of management accounting.
The report must include a completed portfolio of income statements that demonstrate calculations using marginal and absorption costings.
Submission Format: Part 2
The submission is in the form of an individual written report. This should be written in a concise, formal business style using single spacing and font size 12. You are required to make use of headings, paragraphs and subsections as appropriate, and all work must be supported with research and referenced using the Harvard referencing system. Please also provide a bibliography using the Harvard referencing system. The recommended word limit is 1,500–2,000 words, although you will not be penalised for exceeding the total word limit.
Unit Learning Outcomes
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
Assignment Brief and Guidance
Scenario and activity:
Select an organisation of your choice or use your own place of work (if appropriate). In your role of assistant financial accountant, you have been asked by your line manager to produce a report which analyses the organisation’s use of planning tools to ensure financial stability and performance as well as ways in which management accounting has played a key role in preventing and solving financial problems. You are to produce a business report that analyses the use of different methods used for management accounting and make recommendations for which of these methods should be applied to achieve sustainable success.
1. Compare and contrast three planning tools used in management accounting, indicating how effective you judge each to be and why. Your judgements should be supported by examples to demonstrate advantages and disadvantages.
2. Using specific case studies as examples, compare ways in which management accounting is applied, the effectiveness of management accounting in dealing with financial problems and preventing financial problems in organisations.
3. Provide conclusions and recommendations to the organisation on which methods to apply in order to achieve sustainable business success, based on your findings and evidence provided.
Learning Outcomes and Assessment Criteria
Pass Merit Distinction
LO1 Demonstrate an understanding of management
accounting systems
D1 Critically evaluate how management accounting systems and management
accounting reporting is
integrated within organisational processes.
P1 Explain management accounting and give the essential requirements of
different types of management accounting systems.
P2 Explain different methods used for management accounting reporting. M1 Evaluate the benefits of management accounting systems and their application within an
organisational context.
LO2 Apply a range of management accounting techniques
D2 Produce financial reports that accurately apply and interpret data for a range of business activities.
P3 Calculate costs using
appropriate techniques of
cost analysis to prepare an
income statement using
marginal and absorption costs. M2 Accurately apply a range of management accounting techniques and produce appropriate financial reporting documents.
LO3 Explain the use of planning tools used in
management accounting
LO3 and LO4
D3 Evaluate how planning
tools for accounting
respond appropriately to
solving financial problems
to lead organisations to sustainable success.
P4 Explain the advantages and disadvantages of different types of planning tools used for budgetary control. M3 Analyse the use of
different planning tools and their application for
preparing budgets and forecasts.
LO4 Compare ways in which organisations could use
management accounting to respond to financial problems
P5 Compare how organisations are adapting management accounting systems to respond to financial problems. M4 Analyse how, in
responding to financial
problems, management
accounting can lead organisations to sustainable success.
