Page 272 - DCOM302_MANAGEMENT_ACCOUNTING

Unit 14: Management Reporting and MIS

Distribution of the monthly performance report (and its segments) should follow essentially the Notes

same pattern as the annual profit budget plan. Certain executives need the complete monthly
performance report. Other members of the management only need those schedules related to
their particular responsibility centres. Lower levels of management may receive only one of the
detailed segments. On the other hand, the higher the level of management, the greater the need
for summaries, yet these summaries must be supported by adequate detail to identity particular
aspects of operations.
Types of reports for different levels of management:
1. Top management including Board of Directors and Financial Management:
(a) Balance Sheet

(b) Profit and Loss Statement

(c) Position of Stock
(d) Disposition of funds and working capital

(e) Capital expenditure and financial commitments together with the progress of projects
in hand.
(f) Cash fl ow statement
(g) Sales, production and other appropriate statistics.
2. Sales Management:
(a) Actual sales compared with budgeted sales to measure performance by products,
territories, individual salesman and customers.

(b) Standard profit and loss by product for fixing selling prices and to concentrate on
sales of most profi table products.
(c) Selling expenses in relation to budget and sales value analysed by products,
territories, individual salesman and customers.
(d) Bad debts and accounts which are slow and difficult to collect.

(e) Status report on new or doubtful customers.
3. Production Management:
(a) To buyer: Price variations on purchases analysed by commodities
(b) To foremen/shop leader:

(i) Operational efficiency for individual operations duly summarised as departmental
average.
(ii) Labour utilisation report and causes of lost time and controlled time.
(iii) Indirect shop expenses against the standard allowed and
(iv) Scrap report.
(c) Works Manager/Departmental Managers:
(i) Departmental operating statement.
(ii) General works operating statements – expenses relating to all works expenses
not directly allowable or controllable by departments.
(iii) Plant utilisation report.
(iv) Departmental scrap report and
(v) Material usage report.

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