Methods to Report Management Accounting Assignment

Management
Accounting
1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Management accounting and its essential requirements of different types of systems.........3
P2) Methods used for management accounting reporting for Diverse Ltd..................................5
TASK 2............................................................................................................................................6
P3) Costing techniques and its differences for preparing income statement...............................6
TASK 3............................................................................................................................................9
P4) Advantages and limitations of budgetary control..................................................................9
P5) Different management accounting systems to solving out financial problems of Diverse
Ltd..............................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCE.................................................................................................................................15
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INTRODUCTION
Management accounting is a useful approach that is used to make cost control decisions
by the business firms.. Any organization can increase its efficiency by applying management
accounting tools. Present report is related to understanding different methodologies to be
implemented for systematic management of Diverse Ltd. It is one of the small size dance
academies of UK that was found in the year 2007. Therefore, significance of management
accounting concept and its different components are to be obtained. Through this assignment,
various costing techniques for price determination and analysis of several financial statements
including ratio analysis will be expressed. Apart from this, several management accounting tools
for decision-making and forecasting to implement further business operations are recognized.
Hence, students can understand different aspects and importance of management accounting for
the enlargement and enhancing service qualities of small business unit.
TASK 1
P1) Management accounting and its essential requirements of different types of systems
Management accounting is the discipline under which different calculations related to
cost are performed. In this system, management accountant of Diverse Ltd makes decision to
enlarge entity and cultivating effective growth by analyzing business performance. Including
this, different business operations such as cost and inventory management as well performance
of organization is understood through applying accounting tools (Tucker, 2016). Moreover,
optimum utilization of resources and proper financial management of firm is gained in respect of
adequate decision-making process. Management accountant of entity identify overall business
activities of small scale enterprise. As much further prepares strategy for implementing action
plan in respect to improving way in which these activities are performed to reduce cost. It is
valuable for management of entire operations as similar beneficial for creating positive
environment of firm by preparing budget. Hence, it is determined that management accounting is
crucial for the expansion of small business organization and increasing its efficiency for carrying
on entity effectively.
Essential requirements of several kinds of management accounting systems
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Management accounting is of different aspects and tools for implementing business
activities at a high level. In this process, management accountant of Diverse Ltd. analyses
different costing for setting a fair price of goods and services. Some of the important
requirements of management accounting systems are to be described as below:- Job order costing: - Under this costing, manufacturing and cost incurred on starting up of
project is obtained. It includes expenses incurred for purchasing raw materials and in
respect to specific batch or product line. Therefore, job order costing is valuable for
evaluating pricing and different aspects of project accomplishment. However, expenses
incurred on business operations and pricing for manufacturing process is determined
through this process. On the basis of this costing, further price determination is created
that put a huge impact on the market value of organization and its products (Kaplan and
Atkinson, 2015). Thus, costing is appropriate for setting effective price and proceeding
to production and final costing. Processing costing: - In the process costing cost that is incurred in each and every phase
of production is computed. all costs of different production stages are summed up to
compute overall cost of production. In this process, pricing is determined for processing
different stages of project planning. However, expenses incurred over various business
activities are obtained through processing costing. It leads to gain price determination for
expansion and proper management of organization effectively. In accordance with this,
processing costing is considered as the basis for effective price determination. Hence,
processing costing is interrelated with production and distribution of goods and services
provided by the organization that put a direct impact on productivity and profitability of
entity (Ibrahim and Yaya, 2016).
 Finished cost costing: - In this process, price determination for production and
supplement of product is determined. As per the same, effective costing is evaluated.
Under this system, different costing and prices are included such as expenses incurred on
advertisement and launching goods in the market (Hope, 2016). Therefore, management
accountant of small business unit prepares record that includes all expenses and different
tools used for launching and developing products in the market. Hence, finished goods
costing is essential for increasing business and competitive strategies. Therefore,
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