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Benefits of Reporting Systems - Wahaca Restaurant

Question :
ayb200-benefits-of-reporting-systems-wahaca-restaurant
Answer :
Organization Selected : Wahaca Restaurant

INTRODUCTION

Management accounting is the process of preparing accounts and reports by providing accurate financial and statistical information required by managers in making day-to-day decisions. In this weekly and monthly reports are made by the department managers. The reports are made on the basis of available cash, sales revenue, outstanding debts, raw material, inventory etc(Abdelmoneim Mohamed and Jones, 2014). This report is based on Wahaca restaurant founded on 2007 by Thomasina Miers. They are leading with Mexican-style street food. This report is based on system essentials and benefits with reporting methods. It is made for evaluating system with an integration. The uses of planning tools which are used for controlling and for forecasting budgets in order to resolve financial problems for achievement of sustainable success. Their based a preparation of accounting systems by the leading organisation for success by solving appropriately.

TASK 1

Essential requirements of different management accounting systems

Management accounting is a process of analysing cost and operations in order to prepare reports, records for achieving goals and objectives. They are leading by translating data or information in useful form. Wahaca restaurant is preparing this records on day to day operations. These analysis are prepared by creating and evaluating financial statements from external sources. Their includes margins, constraints, capital budgeting, valuation and costing of products by Wahaca Restaurant. The systems of accounting define by making decisions in identifying different ways with a confidential use by managers. These are prepare by having information such as budgeting, product cost analysis, break even charts, trend charts and forecasting. Their are different accounting system are consider as under.

Job costing system: This system involves information of associated costs in production. The data is required in order to make useful in determining company's estimation. Cost data is determined for products and services of Wahaca restaurant for end results in production processes(Ax and Greve, 2017). Here the estimation is made on the basis on customer specifications and receipt of customer order. Their having different features are stated below.

  • Here job differs from requirements of various types of materials, methods, skills and treatment.
  • This system is preparing separate cost sheet in order to certain cost and profit.
  • Wahaca restaurant is establishing procedure for controlling and reducing costs in a period of time.
  • They are determining overhead recovery rates for absorbing overhead fully.
  • Their provide complete value of work in progress in a prescribed time and duration.
  • Wahaca using this system for controlling production.

Price Optimization: In this, demand varies with different price levels in form of combining data of information of costs and level of prices for improving profits. Company is determining on various prices and channels in responding to products and services(Bennett and James, 2017). Wahaca restaurant is relating with the prices of customer segment by examining targets on changing prices from demanding market. Organisation opt this system in order to make growth and achievements by optimise prices on food products. Development of food is consider by controlling level and improving customer satisfaction. For example: to make customer attraction towards a restaurant, it is a vital form to make utilisation of resources. Their requirements are consider below.

  • They are considering by selecting solution via price planning and optimization.
  • The requirement of optimization is used with the help of technology in making pricing decision.
  • Their used helps in reducing fears and barriers while making solutions.
  • With the help of precise data it is helpful in using easily.

Cost management system: This system consists of formal methods in developing planning and controlling by managing activities in either short term and long term. Their providing two challenges for gaining profits in short-term and improving competition in long term(Fullerton, Kennedy and Widener, 2014). For Wahaca restaurant uses it for managing core of competencies for an exploit of opportunities and threats. They are linking with the plans and strategies in a form for achieving organisational performance. Their need or requirements are consider as under.

  • It is vital for the growth of technology.
  • Wahaca restaurant is running for domestic competition.
  • They takes place in improving services and manufacturing sectors.

Inventory management system: It is an ongoing process used for movable goods. Their includes placing new order of products and shipping their orders to customers. Here essential goods are supply to customers by having daily operations. Their are many of the techniques in evaluating turnover ratios and EOQ(Gibassierand Schaltegger, 2015). In making preparation the methods opt are LIFO( Last in first out), weighteage average cost method and FIFO( Firstin first out for evaluation) for analysing. Problems occur by Wahaca restaurant in this system by replenishing rates in between overstock and stock-out. The needs and requirements of this system are defined below.

  • It is required by company's in manufacturing purpose of parts and components.
  • Here services provide by Wahaca restaurant in order to maintain supplies by cleaning, replacing parts and other different items of food for serving customers.
  • Restaurant is using expenses in serving large number of customers.
  • Their is an essential requirement of this system by tracking assets with bar codes, serial number, RFID, wireless tracking etc.

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Methods used in management accounting reports

It is a crucial part in making complete picture of business performance. This report is produced in view of financing business. It is especially dealing with the owners of small businesses. Wahaca restaurant is running strategically insights with the crucial development. It is also known as management or cost accounting. Here many of the critical decision is depending on reports which is carefully crafted by experts. Restaurant reports on daily basis prepared for food with certain patterns and leading with converting it for a company(Jamil, 2015). Their are four different budgets are explained as under.

Budget report: This report is managing fundamentally in order to help business owners by understanding and controlling costs for an enterprise. It is unified with leading with several departments by evaluating expenses. The estimations are made by Wahaca restaurant relating to budgets for following year. Here company creates budget by understanding business scheme. The listed company uses all source of earnings and expenditures. Restaurant tries to enhance goals and objectives for staying in a budgeted amount. Here the circumstances might be arise due to overseen of great plan.

Account receivable ageing reports: this report offers credit to consumers which is crucial for a business of restaurant. Wahaca is overviewing its balances by making ageing group of customers(Kaplan and Atkinson, 2015). This overview is measured by separating categories of ageing groups for aligning policies. Here mentioned breaking down of balances of customers into a specific period of time for finding issues in collection process. There are many defaulters in restaurant with a complete transformation of policies of cash flows by operating business. Company has bad debts which are needed to be written off.

Job cost report: in this, reports are provided by viewing total cost incurred during project preparation by yielding expected revenues. Wahaca restaurant is evaluating profits by optimizing operations by focusing on overall profits. The customers are focusing on making overall profitable. Manager of restaurant is to make offer in summary of information required from customers. The profits margin are estimated and monitor in a clear picture form of costs that occur in production of articles. Customers of Wahaca restaurant preparing reports including labour hours and overhead costs.

Performance reports: this report is base on the reviewing of performances as a whole of each employee at the end of term. This performance are measured in departments. The execution of work is made on the basis of reports of an accounting terms. Their is an insight of work mentioned by Wahaca by certain happenings of reports towards flaws. It is vital role which every organisation is measuring accurately towards their mission.

Evaluation of benefits of an accounting system

Their are various benefits used though an effective management system. They are enhancing overall performance of company. Their benefits are described below.

Increasing efficiency: company opt improving performance operation in order to increasing efficiency. Wahaca restaurant is contributing in striving by evaluating and comparing of better performance(Lavia López and Hiebl, 2014). It is their in making various results which is easily to be achieve. Restaurant is provided rewards to their employees in form of promotions. This is helpful in making efficiency in the organisational context. 

Increases the bar of profitability: Management accounting includes controlling and capital of budgeting. Their operating vital operations by making extra expenses for uses easily. It is profitable in increasing bar of profits for restaurant. This is a useful benefit opt by Wahaca by reducing prices of products. 

Simplifies in making decisions in financial statements: in this decisions and activities are made in simplified form while preparing financial statements. Restaurant create detailed technical report in order to make simpler interpretations. Here enables managing decisions with the betterment of restaurant. The accountant is their in making statements with the key facts.

Enable fluctuations of business monetary fund: The company enables in controlling functions in monetary fund with an essential factors. Accounting is made in details with the flow of funds. Here is an emergency fund which is used in urgency when there is a need for an organisation. Their is an essential source which h is eliminated by misusing of funds.

Flexibility and freedom: The reports are not required in preparing yearly, monthly or weekly. It is used in terms of getting enough time in preparation of reports. Wahaca restaurant is their in support with making flexibility report mentioned or prepared in monthly and yearly basis with an organisational context. Also check online assignment help for best results.

Evaluation of accounting systems and reporting in integration in organisational process

The reports are prepared by using system approaches. Company used to provide reports in order with the use of informations and data. Restaurant is maintaining cost records in order by summarising company earnings(McLaney and Atrill, 2014). The accounting shows which is useful in maintaining fluctuations occur in time by making profits and losses. Wahaca is leading with liquid cash by net worth making with available resources.

Job costing system and cost reports: in preparing costing reports their incurred cost during project. This report is measured by making cost estimation with the help of system. In preparation of reports their mentioned revenues and capital with the formulation. Wahaca restaurant is preparing reports relating with the costs incurred.

Trends analyses and budget report: Integration takes place in both terms by forward looking on which decisions are made. It is focusing on forecast of sales and in preparation of reports. The company uses trends by analysing for preparing budgets. From this analysis reports generated for future sales in capital expenditure, profit planning, research and development by opting reporting of budgets by using best method for financing.

Price optimisation and performance reports: The reports are made on the basis by optimising prices of product. Performance reports mentioned various kinds transaction with making optimisation on that pricing of products. Wahaca restaurant is preparing reports on the basis of first integrating by making optimum utilisation of raw materials.

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TASK 2

Marginal costing

It is a technique used by relating with variable and fixed costs in order to charged cost units(Mokhtar, Jusoh and Zulkifli, 2016). This costing is against with the contribution and written off in related to period. It lies in relation with variable and fixed cost.

Calculation of net profit by using marginal costing method

Particulars

 

Amount

Sales revenue = ( No. of goods sold * selling price = 50 * 16000)

 

800000

Marginal Cost of goods sold:

 

560000

Production = ( Marginal cost per unit * Produced units= 35*18000)

630000

 

closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 2000)

70000

 

Contribution

 

240000

Fixed cost

 

100000

Net profit

 

140000

Interpretation: From this calculation, net profit 140000 is earned by marginal costing. Revenue, contribution and fixed cost are incurred.

Absorption costing

It is applied on manufacturing costs which are en-wrapped on the units produced. It includes finished goods including with inventory and direct materials, labour which are divided in variable and fixed costs. As per end product generated absorption is refer as full costing. 

Computation of net income by using absorption costing method

Particulars

 

Amount

Sales = (Price of selling * no. of units sold = 16000 * 50)

 

800000

Cost of goods sold-

 

560000

Production = ( Marginal cost per unit * Produced units= 35*18000)

630000

 

closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 2000)

70000

 

Gross profit

 

240000

Less – under absorb fixed production cost

 

10000

Net profit/ operating income

 

230000

Interpretation: From this calculation the amount of which computation achieve net profit 230000 in absorption costing.

b)The end of September actual production is made per unit is 19000 and closing stock is 3000.

Calculation of net profit by using marginal costing method

Particulars

 

Amount

Sales revenue = ( No. of goods sold * selling price = 50 * 16000)

 

800000

Marginal Cost of goods sold:

 

560000

Production = ( Marginal cost per unit * Produced units= 35*19000)

665000

 

closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 3000)

105000

 

Contribution

 

240000

Fixed cost

 

100000

Net profit

 

140000

Interpretation: In calculation of net profit marginal costing is methods is prescribed with the use of revenue and profits generated(MOUSAVI and Shakeri, 2014). From this, net profit earned is 140000.

Computation of net income by using absorption costing method

Particulars

 

Amount

Sales = (Price of selling * no. of units sold = 16000 * 50)

 

800000

Cost of goods sold-

 

560000

Production = ( Marginal cost per unit * Produced units= 35*19000)

665000

 

closing stock = ( Marginal cost per unit * Closing Stock Units = 35 * 3000)

105000

 

Gross profit

 

240000

Less – under absorb fixed production cost

 

5000

Net profit/ operating income

 

235000

Interpretation: By this calculation the budget is measure from marginal and absorption cost from which profits and loss account make earnings. Profit from absorption costing is measured as coming charge of 500.

TASK 3

The advantage and disadvantages of different types of planning tools used in budgetary control.

Budget is estimation of revenues and expenditures for specified period. Budgetory control is the methods of preparing budgets and compared it with actual income and expenditures(Pavlatos and Kostakis, 2015). Senior accountant of Wahaca restaurant use budgetary control to control cost. Some different types of planning tools used by organisation are mentioned below:

Forecasting tools:

Forecasting tools is used to determine the future trends of company. Wahaca restaurant used this tools to forecast what is going to be happen in future so it helps them to grow business effectively and efficiently.

Advantage: This tool is used to predict future fiscal information which helps company make efficaciously decisions.

Disadvantage: This tool considered qualitative date which changes accordingly so future can't be predict accurately.

Contingency tool:

It is a planning tools which is used to evaluate sudden changes occurred. Contingency tools explain those factors which are helpful and effectual for humanistic(Schaltegger and Burritt, 2017). Wahaca restaurant used this tool move various risk from performance.

Advantages: This tool reduce problems which are suddenly occur in marketplace. So, this help to make plans according to risk and issues that may happen in future.

Disadvantages: In this tool, drawback occur on the causes of management in overestimating of costs in budgetary slack. The slack occur when the differences in between believing budget and on project report. The consideration is made on hopes in making budgets easier.

Scenario tools:

Scenario planning tools are made for the purpose of future and on the transformation occur in need for strategy. Wahaca restaurant is planning for corporate managers in analysing with tools in making decisions while facing uncertainty. The idea of establishing behind thinking for future aspects by making evaluated scenario regarding point to point.

Advantages: It helps in emerging designs and thinking. Their allows insights and unlocking activity which is outside business approach(Zaleha Abdul Rasid, Ruhana Isa and Khairuzzaman Wan Ismail, 2014).

Disadvantages: It not well known approach. They are not making scenario for making profits. Their is and unlikely possibilities.

Analyse the use of different planning tools and their application for preparing and forecasting budgets.

Planning tools are consider for controlling made by manager on budget. The tools are refer to which a company is first identifying contingency used for controlling risks. Their use is identify by costs and expenses occur. Scenario tools are measured on the enhancing activities made on future risks. Forecasting is made on budget process in internal and external factors according to future trends. For effective budget prepare by Wahaca restaurant using various equipments by examining. By making specific planning by using these tools are helpful for growing business opportunities. Wahaca restaurant is using this approach in for increasing business of restaurant by reducing risks on food products.

Tools used in accounting for solving problems for leading sustainable success

Wahaca restaurant is facing lots of problem in accounting and financials. The errors made in transactions of food items. The problems faced by company on day to day basis on enhancing growth. Errors occur in tools of contingency in future risks(Mokhtar, Jusoh and Zulkifli, 2016). Here tools issues are solved by enhancing activities by making accurate measurements in the preparation. Restaurant is leading with many of the opportunities in growing business. The uses of this approach is identified controlling risks occurred by manager of restaurant. Scenario planning tools are measured for future basis in helping for business opportunities. This tool prediction on such future trends in having sudden changes while conducting use of activities uses KPI. These resolving is made on the basis of key performance indicators who solved many on the problems during risks.

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TASK 4

Adapting management system in respond to future problems

By preparing management accounting with having critical situations the problems simply found in financial measurement. Wahaca restaurant is managing resources in time to time basis. Their includes many of the issues including enhancements of customers towards food product, reducing income, customer satisfaction by completing their needs and wants(Zaleha Abdul Rasid, Ruhana Isa and Khairuzzaman Wan Ismail, 2014). Their are many of the tools made in according to the issues to be resolved are consider as under.

KPI( Key performance indicator): It is a tool used for measuring value s by establishing effectively business objectives. Wahaca restaurant is evaluating success in targets by verifying in various groups. Indicators are defined in two levels first is relating to measure overall performance of individuals and low level indicated by focusing in relating with various departments. From this, restaurant makes an effective decisions in regarding with food products. This is maintained by approach in identifying causes and errors for resolving. This reduction is made by increasing performance of company.

Benchmarking: Wahaca restaurant is considering use of performance of food products, their services provided and processes which are used. Their having use by identifying internally with a possibility in making improvements. The objectives refer to company improvement, analysing performance etc.

Comparison between Wahaca restaurant and Cafe Pacifico

Wahaca Restaurant

Cafe Pacifico

In this restaurant, they are evaluating food materials, labour, overhead cost. They are improving their products by ascertaining and allocating materials properly. The system adopted is identified on the basis of profits and non profits occur by company. Their having financial and non financial issues which are resolved by indicators relating with the costs.

In this restaurant they are opting accounting system. The company is using inventory management for minimum expecting of results formed. They are using benchmarking in relating to solve the problems. Restaurant is to achieve targets by fulfilling customer satisfaction. The technology opt by restaurant for evaluating objectives and goals.

Tools for accounting responding on financial issues for sustainable success

For conducting evaluation activities facing uncertainties in order to financial issues. The system opt by company in order by conducting properly. The way in which maintaining performance by constantly judging(McLaney and Atrill, 2014). Department of Wahaca restaurant for having sustainable growth in market by practical division in human resource and finance. The success is by having proper decision directly made by making reports in equipped by analyses. In making reports of management accounting makes regular analysis made on business activities. In management accounting the decisions are made on the basis on evaluating needs on food products by customers.

CONCLUSION

From the above mention report accounting is measured by Wahaca restaurant has improve its financial position by effective dealing with customers and employees. They are providing analysis in order to make overall performance with having proper information in costing technique prepare for budgets. The reports are concluded by maintaining and comparing organisation and identifying by resolving problems and issues occur. It is not mandatory in dealing by providing analysis for maintaining overall performance of company. Their analysis are made in responding to the problems of management accounting is compile in sustaining success.

Students also like to read: Types of Business Structures

REFERENCES

Books and Journals

Abdelmoneim Mohamed, A. and Jones, T., 2014. Relationship between strategic management accounting techniques and profitability–a proposed model. Measuring Business Excellence.18(3), pp.1-22.

Ax, C. and Greve, J., 2017. Adoption of management accounting innovations: Organizational culture compatibility and perceived outcomes. Management Accounting Research. 34. pp.

Bennett, M. and James, P., 2017. The Green bottom line: environmental accounting for management: current practice and future trends. Routledge.

Fullerton, R. R., Kennedy, F. A. and Widener, S. K., 2014. Lean manufacturing and firm performance: The incremental contribution of lean management accounting practices. Journal of Operations Management.32(7-8). pp.

Gibassier, D. and Schaltegger, S., 2015. Carbon management accounting and reporting in practice: A case study on converging emergent approaches. Sustainability Accounting, Management and Policy Journal.6(3), pp.340-365.

Jamil, C. Z. M. and et. al., 2015. Environmental management accounting practices in small medium manufacturing firms. Procedia-Social and Behavioral Sciences.172. pp.619-626.

Kaplan, R. S. and Atkinson, A. A., 2015.Advanced management accounting. PHI Learning.

Lavia López, O. and Hiebl, M. R., 2014. Management accounting in small and medium-sized enterprises: current knowledge and avenues for further research. Journal of Management Accounting Research.27(1).pp.81-119.

McLaney, E. J. and Atrill, P., 2014. Accounting and finance: An introduction. Pearson.

Mokhtar, N., Jusoh, R. and Zulkifli, N., 2016. Corporate characteristics and environmental management accounting (EMA) implementation: evidence from Malaysian public listed companies (PLCs). Journal of cleaner production.136. pp.

MOUSAVI, S. M. and Shakeri, M., 2014. Strategy, Strategic Management Accounting and Performance in the Companies Listed in Tehran Stock Exchange.

Pavlatos, O. and Kostakis, H., 2015. Management accounting practices before and during economic crisis: Evidence from Greece. Advances in accounting.31(1), pp.150-164.

Schaltegger, S. and Burritt, R., 2017.Contemporary environmental accounting: issues, concepts and practice. Routledge.

Zaleha Abdul Rasid, S., Ruhana Isa, C. and Khairuzzaman Wan Ismail, W., 2014. Management accounting systems, enterprise risk management and organizational performance in financial institutions. Asian Review of Accounting.22(2). pp.128-144.

Zaleha Abdul Rasid, S., Ruhana Isa, C. and Khairuzzaman Wan Ismail, W., 2014. Management accounting systems, enterprise risk management and organizational performance in financial institutions. Asian Review of Accounting.22(2).pp.128-144.

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