Essential requirement of Management Accounting
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Added on 2020-10-04
Essential requirement of Management Accounting
Added on 2020-10-04
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Essential requirement of different management accounting systems...................................1P2. Different methods of management accounting reporting.....................................................3M1...............................................................................................................................................6D1................................................................................................................................................6TASK 2............................................................................................................................................6P3 Calculation of cost by using marginal and absorption costing methods................................6M2 ..............................................................................................................................................8D2................................................................................................................................................9TASK 3............................................................................................................................................9P4 Advantages and disadvantages of different types of planning tools used for budgetarycontrol.........................................................................................................................................9M3.............................................................................................................................................11D3..............................................................................................................................................11TASK 4..........................................................................................................................................11P5 Adoption of management accounting systems to respond financial problems....................11M4 ............................................................................................................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................14.......................................................................................................................................................15
INTRODUCTIONManagement Accounting is a system which helps in the collection of financial and non-financial information. This system plays an important role to control and monitor the employeeseffectively to enhance their performance. It includes various methods of accounting like cost,inventory and job costing which contributes in planning, decision-making, risk management, etc.Application of such systems enhance the decision making power of management of organisationwhich helps in formulation of effective strategies and budgets. These budgets are working asstandards which guide employees in performance of their different functions. Further, suchstandards are used regarding appraisal of actual performance of employees. This helps in theidentification of issues which are faced by employees at workplace. Zylla is a small companywhich provides diversified products in the UK (Vasile and Man, 2012).In the present report, different management accounting systems and their essentialrequirements in organisation, different methods of management accounting reporting, calculationof cost using marginal and absorption costing methods as well as advantages and disadvantagesof different types of planning tools which are used for budgetary control will be explained. Also,the use of management accounting systems in response of different financial problems faced byorganisation will be discussed.TASK 1P1. Essential requirement of different management accounting systemsManagement Accounting: It is an important process of identifying, analysing,measuring and communication of important information which helps in the accomplishment oforganisational objectives. This includes various accounting systems and reports that help in thecollection of financial and non-financial information which is further used in preparation of
effective strategies and budgets. This provides an opportunity to take effective decisionsregarding their day to day business activities. Various systems of management accounting helpsto make improvement in major three areas which are strategic , performance and riskmanagement. The basic function of management accounting is to help the manager of Zylla toplan about future actions and enhance decision-making power which assists in formulation andimplementation of strategies. It includes the use of various accounting methods like job costing,inventory management, variance analysis, etc. Every different method has its own importanceregarding presentation of important information of organisation. Similarly, managementaccounting reports help in the interpretation of such information to draw important conclusion.Large number of benefits are arrived by the management of Zylla like appraisal of employee’sperformance, preparation of effective policies, determination of actual position of organisation inmarket, etc. Overall, impact of such systems is that it helps in the achievement of predeterminedtargets within stipulated period of time (Ward, 2012).Essential requirements of management accounting systemsThe major requirement of these systems is to manage their different functions whichcontribute in improvement of existing performance of employees. This provides an opportunityto achieve their goals effectively and efficiently. Three areas which are improved with the use ofsuch accounting systems by the manager of Zylla are mentioned as below:Strategic management: Management accounting systems help in the formulation ofeffective policies which guide employees to perform their work on the basis of suchstrategies. This can be prepared with the help of financial and non-financial information.It helps in the removal of work related issues.Performance management: In this, performance of employees are appraised on basis ofsuch standards and budgets which are prepared by the manager of Zylla. This provides anopportunity regarding providence of solution which improves their skills and knowledge.Risk management: Information provided by management accounting systems helps inidentification of the risks which are associated with functions of zylla company. Forexample: Job costing method helps in the identification of most profitable process whichhelps to improve their profitability and optimum utilisation of given resources (Albelda,2011).Different management accounting systems
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