Business Management Accounting

Business Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Meaning of management accounting and its importance towards the organization...................1
QUESTION 1...................................................................................................................................2
Review on cash position of Woodrock Limited .............................................................................2
QUESTION 2...................................................................................................................................5
Analysis of best strategy for Plaistead Plc using marginal costing technique.............................5
QUESTION 4...................................................................................................................................8
Calculation of standard costing variance.....................................................................................8
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

INTRODUCTION
Management accounting , this term is define systematic procedure of using and
representing accounting g information for internal user of the business organization. It is part of
accounting , which is generally applied by manager in their business corporation so they can
record all the transaction bin effective manner and reduce chances arise of errors. This report is
prepared to solve problem of different organization by applying technique of management
accounting. By making cash , flexible budget and computing variance as well as break even ,
margin safety and P/V ratio, in his report help in arising knowledge and understanding of
importance of managerial accounting in running business corporations. To control cost and arise
business profit by making attractive ,and reliable budget.
MAIN BODY
Meaning of management accounting and its importance towards the organization
Management accounting: Business strategy used for analysis, recording, computing and
presenting accounting information in effective way , which help in systematic decision making
process. It is part of management function. Accounting department by using this technique
accounting, record all the essential transaction in ethical way. This is essential tool which useful
in run business activity in effective way. Following are the role of management accounting :
 Decision making: Manager apply tools of this accounting strategy which help in tasking
decision regarding which alternative is best .By applying marginal costing, and methods
of budgeting manager can easily recognize, which project useful in providing future
benefit for the organization (Alyousef, and Mickan, 2016).
 Cutting cost: Business organizations by applying technique of computation of cost can
understand activities which become the reason of extra incurring of cost . This help in
making policies to cut cost of theses business activities. Which help in generating profit.
 Optimum utilisation of resource: By identifying allocation of resource according to
business activity as well as cutting cost also useful in properly use scare resource special
finance resource of the business organization.
 Making pricing strategy: Management accounting help in providing best pricing
strategy, through which organization take decision regarding selection of price for their
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business organization. They choose price which satisfy customer as well as help in
gearing profit.
 Help in environment scanning process: Marginal costing, standard costing and system
of management accounting useful in identifying effect of external as well as internal
department of production and distribution procedure .
 Provide base for preparing budget: Planing tool of management accounting as well as
its system useful in given accurate information regarding formulating future as well as
current budget. This help manager to identifying future business opportunities.
 Risk analysis: Management accounting useful in assessment of risk, by making budget,
organization able to identifying risk and on the basis of that they formulate future
policies to avoid theses risk.
QUESTION 1
Review on cash position of Woodrock Limited
Cash budget: This term refer as numerical statement which define cash inflow and outflow of
organization for particular period of time. Cash budget is useful in providing base for future
budget and able to formulate policies of controlling cash outflow. Manager only consider cash
and its relevant transaction which deal only in the form of cash (Li, and Gu, 2020). It
considered, expenses and revenue collected by business organization. Following are the cash
budget of Woodrock Limited
PARTICULARS
MONTH
1
MONTH
2
MONTH
3
MONTH
4
MONTH
5
MONTH
6
OPENING BALANCE NIL NIL NIL -31914 -24430 -23156
RECEIPTS
RECEIPTS FROM CLIENTS NIL NIL NIL 41000 30000 35500
TOTAL A 0 0 0 9086 5570 12344
PAYMENTS
PAYMENTS TO SUPPLIERS NIL NIL 11800 8600 10200 12800
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