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Financial Problems of Management Accounting | Report

Added on - 28 Jan 2020

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ManagementAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Management Accounting and types of Management Accounting System...........................11.2 Methods for Management Accounting report.......................................................................21.3 Advantages and uses of Management Accounting System...................................................3TASK 2............................................................................................................................................4P3 & M2......................................................................................................................................4D1 Evaluation of how management accounting systems and management accountingreporting is integrated within organisational processes in the context of Dell...........................5TASK 3............................................................................................................................................63.1 Explain the advantages and disadvantages of different types of planning tools used forbudgetary control........................................................................................................................63.2 Use of different planning tools and their application for preparing and forecasting budgetsin the context of Dell...................................................................................................................73.3 Evaluation of how planning tools respond appropriately to solving problems in the contextof Dell , leading to sustainable business development...............................................................8TASK 4........................................................................................................................................94.1 Comparison between Dell and Lenovo that how they respond to financial problems.........94.2 Analyse how, in responding to financial problems, management accounting can lead anorganisation such as Dell to sustainable success.........................................................................9CONCLUSION.............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONManagement accounting is to be done for gathering information related to the accountingaspects. Most of the companies follow management accounting system for generating effectiveinformation. In the presented report Dell company has been taken which follows themanagement accounting system. The given report describes the meaning of managementaccounting, its types and methods. The benefits of applying management accounting has alsopresented. The absorption costing and marginal costing have also described. Different planningtools and its application for forecasting budget has been explained. The solutions to the financialproblems of management accounting has been given in this report.TASK 11.1 Management Accounting and types of Management Accounting SystemManagement Accounting:The bases of Management Accounting are financial accounting and cost accounting. It isthe systematic process of analysing, measuring, interpreting and presenting the accountinginformation which has collected through financial accounting and cost accounting. This helps intaking decisions, policy creation and day to day or routine operations of an organisation by themanagement.(KaplanandAtkinson,2015) The information related to the cost of products orservices purchased by the company that uses by the management accountant.Types of Management Accounting System:There are four types of Management accounting. These are as given below:Traditional cost accountingLean accountingThroughput accountingTransfer pricingTraditional cost accounting:- In the traditional cost accounting the calculation has donewhich includes direct cost of raw material, labour and overhead. There is a cost driverwhich causes the cost to occur, such as direct material hours, direct labours and machinehours.(Simons,2013)
Lean accounting:- Lean accounting is the term which is generally used for changes madein company's accounting, controlling, measurement and the management processes(Fullerton,KennedyandWidener,2014). This supports to lean manufacturing and leanthinking.Throughput accounting:- Throughput accounting is completely new in managementaccounting. It is based on principle and approach of simplified management. It providessupport for decision making in context to the company's profitability improvement.Transfer pricing:- In simple sense, transfer pricing means the price which arises whentransfer of goods or services take place between holding to subsidiary company or fromsubsidiary to holding company.1.2 Methods for Management Accounting reportTools and techniques which are used in management accounting are as follows:1.Financial planning:Financial planning gives proper directions to the activities for wellperforming. The major objective of any organisation is to earn maximum profits. Andthis objective is fulfil by doing proper and sound financial planning.2.Financial statement analysis:In this profit and loss account and balance sheet are to beprepared on the comparative basis for knowing the financial position of the company.This is to be done on yearly basis means after at end of every accounting period.3.Cost accounting:Cost accounting is to be done for analysing the data related to cost. Itshows the data of cost according to product, process, department, branch and the like(GibassierandSchaltegger,2015). The actual costs are to be compared with the standardones. This comparison shows the deviation if any and helps to management for takingdecisions for the differences.4.Fund flow analysis:Fund flow analysis gives the over view of the transfer of funds fromone period of time to another. In this funds from operations and working capital changesare to be calculated. It also provides information with comparison to previous year thatwhether the funds are properly used or not.5.Cash flow analysis:This analysis gives the information related to the outflow and inflowof cash in the organization (Cooper,EzzamelandQu,2016). It includes three activities:operating activities, investing activities and financing activities.2
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