Introduce to Managerial Accounting - Assignment

   

Added on  2020-06-06

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MANAGEMENT ACCOUNTING
Introduce to Managerial Accounting - Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1P1 Presenting MA system that Unicorn can use for effective financial management.................1P2 Explaining different methods which can be used for reporting purpose as per managerial accounting....................................................................................................................................4P4 Calculation of cost using absorption and marginal costing....................................................6P4 Explaining advantages and drawbacks of different budgetary control techniques...............10P5 Comparing how business unit adapt management accounting system for responding financial problems......................................................................................................................13CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................................16
Introduce to Managerial Accounting - Assignment_2
INTRODUCTIONManagerial accounting becomes vital for business units which in turn facilitates optimum use offinancial resources. In recent times, cost control is one of the main motives of firm because it is highlyassociated with the enhancement of customer base and profit margin. In this regard, managerialaccounting tools as well as concepts are highly significant that assists in identifying areas of cost controland thereby helps in improving profit margin. Thus, by considering the tools of management accountingbusiness unit can develop suitable and strategic framework for the near future. For this project report,Unicorn has been selected which offers retail products or services to the customers. In this, report willhighlight the requirements as well as manner in which MA system aid in the growth and profitabilityaspect of firm. Besides this, it also provides deeper insight about the reporting and planning tools on thebasis of management accounting. Further, it also shed light on the manner in which MA tools help inresponding monetary problems. P1 Presenting MA system that Unicorn can use for effective financial management To Management TeamUnicorn LtdDate: 28th December 2017Subject: Management accounting system INTRODUCTION: In this, MA tools have discussed along with the reasons due to which they areessential. Along with this, benefits and drawbacks of each system have also discussed which retailunit needs to keep in mind while carry out business activities.Main body Management accounting and its significance Management accounting (MA) is highly concerned with taking daily or short term decisions thatcontributes in the firm’s profitability. It lays high level of emphasis on analyzing and communicatinginternal monetary information that contributes in goal attainment (Fullerton, Kennedy and Widener,2013). System and aspects of MA are highly significant in the following manner:MA tools help in monitoring the performance of departments and assists in takingaction.Further, MA makes improvement in cash flows by reducing the level of expenses.Facilitates effective business decisions and enhances financial returns.MA system: It includes several systems that uses existing operational data and creates informative1 | Page
Introduce to Managerial Accounting - Assignment_3
reports for decision making. Cost accounting: This system of MA focuses of recording expenses that are incurred by businessunit for producing or offering products to the customers. Moreover, firm incurs several direct as wellas indirect expenses while offering services to the customers. In this, cost accounting system focuseson accumulating both direct as well as indirect cost and dividing the same with number of units orofferings. This in turn helps firm in assessing per unit cost and thereby assists in taking suitablepricing decision (Coyne and et.al., 2010). Without setting appropriate price firm cannot get profitmargin and recover the expenses incurred. Thus, using cost accounting system manager of Unicorncan assess unit cost, determine profit margin and sets price. Price optimization: This system can be used by retail business organization for setting prices as perthe expectation of customers. By using this, firm can assess or evaluate the reactions of customers atdifferent price level. Thus, by considering this firm can meet its objectives and maximize operatingprofit margin.Job costing: It helps in recording the cost that is associated with the manufacturing aspect. Thus, byundertaking job costing system firm can track performance and would become able to improveoperations as well as profit margin.Inventory management: Business unit can use EOQ, JIT etc techniques for managing inventorywithin the firm. Moreover, lack of stock closely affects smooth functioning of firm and affectscustomer base. On the other side, high inventory imposes storage cost in front of firm and therebyimpacts profit margin (DRURY, 2013). Along with this, by using FIFO, LIFO etc methods firm cando stock valuation and take decision about future.Merits and drawbacks of varied accounting system Job costingAdvantagesDisadvantagesFacilitates comparison of price, costand profit with estimates on thecompletion of job and thereby exertscontrol on costHelps in performing trend analysisand facilitates pricing of job(Advantages and Disadvantages ofJob Costing, 2017)Clerical work is required formaintaining detailed information It is highly expensive and timeintensive Cost accountingAdvantagesDisadvantagesHelps in cost reduction throughIn the costing records, past2 | Page
Introduce to Managerial Accounting - Assignment_4

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