Advantages and Disadvantages of Planning Tools in Budgetary Control

Management
Accounting

Table of Contents
.........................................................................................................................................................3
Introduction......................................................................................................................................3
Task1................................................................................................................................................3
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems................................................................................................3
P2 Explain different methods used for management accounting reporting................................5
Task2................................................................................................................................................6
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs...........................................................................6
Task3..............................................................................................................................................10
P4 Explain the advantages and disadvantages of different type of planning tool used in
budgetary control......................................................................................................................10
Task4..............................................................................................................................................12
P5 Compare how organizations are adapting management.....................................................12
accounting systems to respond to financial problems..............................................................12
Conclusion.....................................................................................................................................14
REFERENCES..............................................................................................................................15

Introduction
Management accounting can be referred to as a collaborative process that includes
measuring, analyzing, interpretting as well as communicating information to the managers.It is
mainly concerned with accounting all the information that are done within the operations (Bui
and De Villiers, 2017.). They include a series of information in context of cost of products as
well as serivces purchased by the company are doing their business. This information is mainly
gained from the company's budget and undertake variance analysis.
Amazon, is one of the top multi national company that it's head office in Seattle. It is
engaged in e-commerce services in U.K as well as throughout the world. Along with this, it has
concentrated to cloud computing, digital sttreaming as well as Artificial Intelligence. This prject
covers diverse aspect of management accounting that includes detail understanding of it,
different method used in this, technique utilized in management accounting, detail understanding
of planning tools used . Along with this,it also includes a comparision analysis of how the
accounting is appropriate in providing financial problems.
Task1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems
Management accounting is a valuable tool that enables financial managers to make
decisions. It is utilizes by all the managers in making effective decisions (Chenhall and Moers,
2015). This is one of the effective tool used by number of companies in order fulfil their goals. It
is must for the company to understand the essential requirements that can be stated below:
Principles of Manangement Accounting
 Influence: Clear communication flow is vital for every Organizations. It is important for
the company do follow this in order to have a clear informatin regarding management

accounting. This strengthen the process of decision making and yield vital results. This
sound communication will minimize the number of issues that arises in Amazon and
further integrates diverse thought process. This is further fruitful for as the action taken
by one departmenrt impacts other departments and can easily be changed in the timely
manner.
 Relevant: It is comman phenomenen, that information is useful for one and all. It is just
that different information is required due to diverse requirements of diverse individuals as
well business in order to realize their aims (Cleary, 2015.). Management accounting is
fruitful in meeting diverse requirements in order to evakuate different methods in order to
take one of the most favourable decisions. This enables to get a easy access to different
requirements of requirement of each of their shareholders in order to get the most
relevant information in order to fulfil their purpose of existance.
 Value: Value is important for each and every Organization. Managemet accouting
enables the company to link the company's processes to it's different models. This is
beneficial for the company to well informated about the changes occuring in the external
environment.This enables the company to assess information and derive the best value in
order to enrich the journey's of their customers and make them feel highly valued.
 Creditablity: Creditablity is vital part of any Organization. It can be referred to as proper
investigation in order to make their decision making effective to meeting their objectives
(Collis and Hussey, 2017). This further aids in engaging the decision making that
maximizes the welfare of the share holder in the long term as it improves trust as well as
the realiblity. The Experienced managers that are engaged in management accounting
are known to be ethical, aware as well as aware of the company's principles as well as
inter personnal commitments. This is favourable for the company in improving
creditablity as well as reputation and in turn stregthen the various processes of the
company.
It is even vital for the company to understand different roles of managemet accounting.
Some of it's important role can be described in detail below:
 Planning: Management accounting plays a vital role in planning effeciently by providing
the necessary as well as the most accurate informations. The financial information is