Management Accounting Assignment Report (MA)
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Added on 2020-06-04
Management Accounting Assignment Report (MA)
Added on 2020-06-04
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MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and its essential requirements........................................................1P2 Management accounting reports.............................................................................................3TASK 2............................................................................................................................................4P3 Income statement using marginal and absorption costing method.........................................4TASK 3............................................................................................................................................7P4 Budget for planning and controlling purpose.........................................................................7TASK 4..........................................................................................................................................10P5 Balance scorecard approach to respond financial problems.................................................10CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONManagement accounting is important for the firm in order to manage the effectiveness ofdifferent departments and profitability. The report will cover the introduction of managementaccounting and its essential requirements in the firm. Different methods used for managementaccounting reporting and income statement using absorption and marginal costing method willbe discussed in this report. Budget management and its advantages and disadvantages for thefirm and the balance scorecard approach in order to respond financial problems will be discussedin this report.TASK 1P1 Management accounting and its essential requirementsManagement accounting is also known as managerial and cost accounting. It is veryimportant for the firm in order to make financial reports which will be internal, decision makingand accounting. This will be done by measuring the cost of operational activities in the firm. Thiswill also help to prepare financial and costing data and translate it into a important and usefulinformation. Thus, this will help organisation to achieve its desired goals and objectives and alsobetter planning over the business activities (Abdelhak, Grostick and Hanken, 2014). It will alsoincrease the shareholder and consumer value which will help managers to use the resourceseffectively and efficiently.Management accounting as a decision making tool: It can be said that information regardingmanagement accounting will help managers to develop and improve their decision making withdata driven inputs and also for long time of period effectively. For an example, information anddata utilisation, cost techniques based on the activities and cost analysis etc. This will helpmanagers in the firm by determining the performance metrics and also collect information toreport the present performance of firm as compared to the expectations effectively. Managementaccounting reports will also help managers to evaluate the deviation reasons and provide propersuggestion measures.Management accounting and Financial accountingBASISMANAGEMENT ACCOUNTINGFINANCIAL ACCOUNTINGDEFINITIONManagement accounting is a processwhich will help managers towardsFinancial accounting will help togenerate financial information and
the effective decision making, plansand policies by providing themuseful information and data. also prepare financial statements forthe firm.INFORMATIONMonetary and Non-monetaryinformation.Only monetary information.TIME FRAMEThe management accounting reportsare made according to therequirements and demands.Financial statement prepared at theend of the year and an accountingperiod of time effectively.REPORTThe report considered detailed andcomplete information (Amans,Mazars-Chapelon and Villesèque-Dubus, 2015).Financial summary reports whichincludes financial information of thefirm. Cost accounting system: Cost accounting system includes actual, normal and standard costing.This will also help managers to determine the cost of products and services delivered by them inthe market towards customers effectively. The cost data will help to control the businessavailable resources which can be done by making strategies and plans. This will also help to fillthe future needs of the firm. Actual, normal, direct labour and manufacturing overhead costs arerelated to the cost of products used in cost of goods sold.This will help managers by providing them the actual selling price of products andservices.Managers are also able to evaluate profitability in order to meet the competition.Cost of the products and services will help to manage the resources and decision making.Inventory management system: Inventory can be describe as the stock of resources andproducts which will be in form of raw materials, finished goods and work in progress. Inventorymanagement will help managers to control the business available resources in order to reduce thecost of expenses and will also determine the quality, quantity and availability of stock in thefirm. Management of inventory also create cost such as capital cost, insurance, tax, facility costetc.Inventory management will help managers by protecting them against the shortage ofmaterials, resources and uncertainties (Bandy, 2014).
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