(Solved) Assignment on Management Accounting
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Added on 2020-11-23
(Solved) Assignment on Management Accounting
Added on 2020-11-23
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MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and its system with their essential requirements...........................1P2 Presenting different methods of Management Accounting reporting....................................3TASK 2............................................................................................................................................4P3 Presenting the calculation of on basis of Marginal and Absorption costing..........................4TASK 3............................................................................................................................................6P4 Explaining advantages and disadvantages of different types of planning tools for budgetarycontrol.........................................................................................................................................6TASK 4............................................................................................................................................8P5 Adoption of management accounting system for responding to financial problems andleading to sustainable success.....................................................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONAccounting is the language of a business as it defines the performance and financialposition of the organisation. The accounting mainly includes mainly two parts that is financialand management. Financial one deals with the monetary transaction of firm while the scope ofmanagement accounting is vast as it includes both financial and statistical data of the entity toassist the management of the company in strategic decision-making process. In the present reporta detailed discussion about the management accounting system. Their application in business andbenefits are presented. Moreover, calculation using marginal and abortion method of costing iscarried out use and application of planning tools for budgetary control is presented. Applicationof management accounting for responding financial problems is also carried out.TASK 1P1 Management accounting and its system with their essential requirementsManagement Accounting: This can be defined as that process which analyse the cost ofbusiness and its operation for preparation of internal financial reports, records and accountswhich assist the management in the decision-making process to achieve the business objectives(Kenno and Free, 2018). This is an act making the financial and costing data sensible andtranslating the same into useful information for the management and offices in the organisationto use the same in effective decision making. The institute of management accounting defines it as “it is a profession involvingpartnership with decision making, making plans, performance management system, withproviding expertise in the financial reporting and controlling to assist management informulation and implementation of the strategy of the business”Different types of management accounting system and their requirements, benefits andapplication in Aldi:Cost control system: This system is used by Aldi to involve a practice of identificationand reduction of the expenses and cost of business with enhancing the profits of the business.This starts with preparation of the budgetary system (Hiebl, 2018). The managers of Aldicompare actual cost and revenue with the budgeted ones, if the actual cost is Hight than planned,controlling actions are taken to reach the expected level. Benefits:It assists in improvement of profitability and competitiveness of the firm.1
It helps in reduction of the cost of production and thus reducing the sale prices.The prices are kept stable hence maintaining the higher level of sales which ensureregular profits generation.Job costing system: This system is used by the management of the Aldi for assigningand accumulating the manufacturing cost to individual units, departments or job. This is used asvarious items are produces which are significantly different from each other and their cost ofproduction changes too (Usenko and et.al., 2018). The job cost record reports each item's directmaterials and direct labour that are actually used and an assigned amount of manufacturingoverhead.Price optimization:This technique is emphasised on analysing and comparing the prices of products andservices which have been offered by Aldi in different segmentation. It demonstrates how peoplerespond to the different prices at the same products and services (Azudin and Mansor, 2018). Itbenefits the managerial professionals in analysing demand and developing best pricing strategiesfor better profitability. This strategy will benefit the managerial professionals in decision makingand analysing the outcomes as per effective requirements.Inventory management:This is the method presented for managing inventories of the organisation. Therefore, thereare several elements which have been presented in the database that defines effective supplychain management. It funnels the managerial professionals in analysing the demand andproducing the products as per the required (Anand, Balakrishnan and Labro, 2018). Therefore,the chances of having wastage and inappropriate management of products will be controlled.Additionally, it will help Aldi in securing the costs utilised in products and distribution ofproducts by effective execution over inflows and outflows of stock.However, by implicating these techniques in the business operations will be effective interms of improving the creditability. Thus, it will be beneficial in terms of presenting accurateand reliable information among the accountant of Aldi which in turn helpful in drafting the finaldisclosure and decision making in the business. Additionally, such information will be effectivefor organisation for having strong financial control.2
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