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Concept of Management Accounting System

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Added on  2020-10-22

Concept of Management Accounting System

   Added on 2020-10-22

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MANAGEMENT ACCOUNTING
Concept of Management Accounting System_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Explaining the concept of management accounting and types of systems..................................1Analysing various kinds of management accounting reporting techniques................................2Ascertaining the benefits of management accounting system and its application in organisation.....................................................................................................................................................3Critically analysing management accounting systems and reporting techniques to be used inJupiter Plc....................................................................................................................................4TASK 2............................................................................................................................................4Income statement as per absorption costing................................................................................4Income statement on basis of marginal costing...........................................................................6TASK 3............................................................................................................................................7Explaining merits and demerits of numerous types of budget....................................................7Application of planning tool for forecasting and analysing along with preparation of budget...9TASK 4..........................................................................................................................................10Adoption of management accounting system to respond to financial problems of theorganisation................................................................................................................................10Factors which leads to develop organisational growth by use of management accounting......11Response of planning tools for solving financial problems in achieving sustainable success. .12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
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INTRODUCTIONManagement accounting is a concept which have been implicated by various industries inrespect with recording of various transactional entries that will be effective in operating businessactivities. In the present report, there will be discussion based on various managementaccounting system and reporting techniques which are to be used by Jupiter Plc in respect withimproving the operational efficiency of the firm in the market. Along with this, there will be twodifferent costing techniques in preparing the income statement for business as well as discussionbased on budgetary control techniques and planning tools to be used. Moreover, there will beanalysis over performance measurement techniques which are to be implicated by theorganisation to bring the sustainability and retaining growth to meet future challenges.TASK 1Explaining the concept of management accounting and types of systemsManagement accounting:It is a technique of presenting the accounting information with the help of various tools andreporting techniques. Thus, it consists of recording all accounting and transactional informationwhich have been incurred in a period. It helps the managerial professionals in the organisation interms of decision making, planning, controlling and improves the business performance. JupiterPlc has to use this technique in analysing the industrial performance as well as analyse therequirements of the firm in time (What is Management Accounting, 2018). The records kept ondaily basis will be helpful to the accounting professionals or auditor in making appropriate auditof the financial information.Management accounting system:In consideration of management accounting system which are to be used by Jupiter Plc interms of enhancing the performance of industry that will effective positively in raising therevenue (Ax and Greve, 2017). However, there will be influences of various accounting systemwhich are to be used by the professionals with a motive of increasing the business efficiency ofJupiter Plc. The management accounting system includes various elements that are required to beconsidered by the professionals such as:Cost accounting: This is the costing techniques which ascertains that each tasks andoperations which have been performed by the professionals in the industry are required to bedecided on the costs basis. Accountant analyse the past transaction and costs implied in a1
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activities such as purchase of material, manufacturing, labour charges as well as variousoverheads (Bui and De Villiers, 2017). It has been analysed to make appropriate decisions tocontrol the costs implied in such activities. Thus, on the basis of such past records andinformation there will be effective cost control practices which are to be used in Jupiter Plc.Inventory management system: This system is comprised of the information which arerelevant with managing the inventories in the organisation. It allows the professionals inanalysing the market demands for a specific product line as well as efficiency of business insupplying such products. In relation with such determination (Saeidi and Othman, 2017). Thishave influences of techniques of keeping proper records of accounting transaction relevant withthe inventories. It has records of transaction on the basis of quantity, quality and amount to becharged from consumers. Analysing the market requirement and the past selling records will helpin decision in the quantity to be produces in the coming period. Thus, such determination willhelp in reducing the costs as well as improving the business efficiency.Price optimisation: This technique helps in identifying the consumer behaviour andreaction towards a particular product which have been offered among them (Hoitash andHoitash, 2017). Thus, in this manner the company charges several prices on the product onwhich the most preferred prices and the highest sales on such prices will be selected Jupiter Plc.In accordance with such analysis it has been believed that, the highest selling as well asconsumer preference for the product will help in generating the higher gains to the firm.Therefore, there will be rise in financial condition of business (Pricing and ProfitabilityManagement, 2018).Analysing various kinds of management accounting reporting techniquesIt has been comprised of using various activities which are to be considered by theprofessionals that will help in recording appropriate information and details (Domingues andet.al., 2017). This reporting system will be based on planning the future costs and operationaldecisions based on past reports. Therefore, there are various management accounting reportingtechniques which are to be considered by Jupiter Plc such as:Job cost report: In relation with analysing the cost which have been implicated inperforming a job on which direct and indirect costs have been addressed by the professionals ofJupiter Plc. Mainly, in a manufacturing industry there have been use of this technique whichallows the professionals in identifying the costs involves in production department (Ax and2
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