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

Post Date: 13 - Dec - 2019

HND Business
Assignment Brief

Assignment title Management Accounting report for Excite Entertainment Ltd


RQF Unit 5

Management Accounting


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Assignment title
Management Accounting report for Excite Entertainment Ltd
Scenario 1 – (LO1)
You have been working as An Intern at a leading Accountancy Firm. One of the clients called Excite Entertainment Ltd operates in leisure and entertainment industry in the UK. One of their major activities is the promotion of concerts and festivals at locations throughout the United Kingdom (UK). They are consulting your firm on writing a Reference Manual for their Management Accounting Department. Your Manager has asked that you prepare the first draft of the Manual for the client under the following headings:
Section A: Title -Understanding Management Accounting Systems
a. Differences between Management Accounting and Financial Accounting.
b. Cost accounting systems (Direct Costs and Standard Costing)
c. Inventory Management Systems
d. Job Costing Systems
e. Evaluate the benefits of the above management accounting systems to your client.
Section B: Methods used for Management Accounting Reporting
a. Describe different types of managerial accounting reports
b. Explain why information presented should be accurate, relevant to the user, reliable up to date and timely.
c. Critically evaluate how management accounting systems and management accounting reporting should be integrated within Excite Entertainment Ltd Operational processes.
Scenario 2 – (LO2)
Excite Entertainment Ltd is reviewing its Management Accounting Systems, especially how costs are allocated. The company has been allocating overhead costs arbitrarily but is considering using either Absorption Costing or Marginal Costing Method to calculate the profitability of every operations with effect from September 2019.
The following information is available from different cost centres of the organisation: Selling price per Unit £15
  • Prime Cost per unit £4
  • Variable Production costs per unit £2
  • Budgeted fixed production overheads per month £40,000 Budgeted production per month 10,000 units
  • Budgeted Sales per month 8,000 units Opening inventory for September 500 units
Produce a financial report for the month of September 2019 comparing profit or loss using Marginal Costing and Absorption Costing techniques. Interpret the results and advise management on your critical evaluation of the benefits and limitations of each method used referring to the results.
Scenario 3– (LO3)
As a newly-qualified Management 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.
This section is in the form of a two-part individual management report:
Part A: 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 with evidence.
Part B: Using the information provided below, compare ways in which management accounting is applied in dealing with financial problems and preventing financial problems in an organisation.
The following information is provided for the calculations of cost, volume and profit analysis:
  • Estimated fixed costs £120,000.00
  • Variable costs per unit £10.00
  • Proposed selling price per unit £40.00
Additionally, the Finance Manager has indicated the estimated profit that can be generated from the above figures is not adequate for long term plans and therefore want to see profits increased to £90,000.  Advise the sales team how many units needs to be sold to attain this profit level, and management of any other measures that can be put in place for the team.
Critical evaluation of assumptions made must be provided.




LO1 Demonstrate an understanding of management accounting systems

LO1 & 2

D1 Critically evaluate how Management accounting systems and Management Accounting Reporting is integrated within organisational process.

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 & 4

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 and forecasting budgets.

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.

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