MANAGEMENT ACCOUNTING INTRODUCTION

   

Added on  2021-02-19

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MANAGEMENTACCOUNTING
MANAGEMENT ACCOUNTING INTRODUCTION_1
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1. Different types of management accounting system...............................................................3P2. Different method of management accounting reporting........................................................4TASK 2............................................................................................................................................6P3. Income statements by absorption and marginal costing method...........................................6TASK 3............................................................................................................................................2P4. Planning tools in management accounting system................................................................2TASK 4............................................................................................................................................4P5. Management accounting systems in solving the financial issues..........................................4CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................7
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INTRODUCTIONManagement accounting is a systematic process of gathering, reviewing and interpretingthe financial and non financial information in the context of internal decision making of theorganisation (Strauß and Zecher, 2013). In addition, on the basis of this accounting system,companies make their policies and plan for future activities. In the project report, KEF limitedcompany is selected that is operated in the manufacture sector. As well as in the project reportdifferent types of management accounting systems and management accounting reporting arementioned. Along with different kind of planning tools are also described as well as role ofmanagement accounting systems in the context of financial problem of companies.Purpose of management accounting- The purpose of this accounting system is to helping to themanagers so that they can take internal decisions as well as can make further policies and plans.TASK 1.P1. Different types of management accounting system.Cost accounting system: It is also refereed as product costing system that helps the firmto estimate the expenditure incurred on product as well as profitability analyses (Mahesha andAkash, 2013). It is basically a framework used by KFE limited which is a manufacturing firm torecord its day to day production activity. Such system plays an essential role to track theinventory flow at the different production stages. Further, this system helps the selected firm totrack the raw material and convert it into finished good within real time. Thus, as the materialpasses from one operation to the other cost accounting system helps to update the process viaelectronic platform.Price optimisation system: It is one of the significant kinds of management accountingsystem. This is used to determine the price of the product based on the mathematical analysesthat helps to anticipate which price helps to meet the maximum level of profitability. Theresponse of customer differ with the price as well as channel of distribution so price optimisationsystem plays valuable role to sustain the profitability of firm. In relation to KEF limited companydetermine the price based on the cost incurred on production as well as response of customer. Job costing system: This system helps the firm to accumulate overall manufacturing costto produce certain output. It can help KEF limited company when the firm produces variety of
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item each item has its unique cost and are different from each other. Hence, it include differenttypes of head which are explained below: Direct material cost: The role of Job costing system is to track the overall cost ofmaterial which is used by the KEF firm to produce the god as well as scrapped materialwhile performing job. Direct labour cost: Job costing system within respected firm is also used to track the thelabour cost during the manufacturing process.Therefore, job costing system carried the valuable data as well as information that helpKEF limited company to keep a track on its cost. Process costing system- It is a kind of accounting system which is related to thecomputing the cost in different stage of manufacturing process (Leitner, 2013). Due to thiscompanies can evaluate which activities are consuming high cost. In the aspect of KEF limitedcompany, this accounting system can be beneficial because on the basis of it, they can calculateand get the information about different manufacturing activities cost. P2. Different method of management accounting reporting.Cost Accounting Report: Cost accounting is a process of keeping records, classification,allocation, summarizing and analysing the costs associated with particular task or production.Cost accounting reports are analysis variances between estimated and actual costs in order tohelp management in managing and controlling cost and cost related activities. This reportcontains summary of all the cost related budgets and costing techniques used by anyorganization. KEF Limited prepares cost accounting report because this report helps themanagement to improve efficiency and profitability of the company. They are capable to analysethe productivity of activities, fix the prices, reduction of costs, control over the problems andmaking effective decisions with the help of cost accounting reports. It provides reasonablesolutions to the problems in order to achieve the decided goals of the company.Budget Report: Organizations prepares budgets for specific time period with the help ofestimations (Beske, 2012). Actual outcomes may be vary from the budgeted outcomes. Budgetreport is used to analyse the variance between budgeted or standard results and actual results.These variances may be favourable or adverse in nature. Budget reports provides a efficiency
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