Importance of Management Accounting Systems

Added on - Dec 2020

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MANAGEMENT
ACCOUNTING
Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Management Accounting, systems and its importance..........................................................1
Explanation regarding the methods and system of management accounting.........................2
Benefits of management accounting system..........................................................................3
Management accounting system and its reports are related to organisational processes.......4
TASK 2............................................................................................................................................4
Evaluation of Net profit by the method of absorption and marginal costing of Management
accounting...............................................................................................................................4
1: Calculation by using various costing method.....................................................................4
2: Preparation of profit and loss statement by using techniques............................................5
3: Preparation of final account after September.....................................................................6
TASK 3............................................................................................................................................7
Describing some of advantages and disadvantages of adapting different types of planning
tools........................................................................................................................................7
Analysing various planning tools adapted with the motive of preparing and forecasting the
budgets..................................................................................................................................10
Analysation of different budgetary planning tools necessary for solving the financial problem
or issues................................................................................................................................11
TASK 4..........................................................................................................................................11
Comparison of Jupiter PLC with another organisation on the ground of settling the issues of
financial problem by adapting budgetary planning tools.....................................................11
Evaluatingthecontributionofmanagementaccountingandsysteminachievingof
organisation's sustainable success........................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
INTRODUCTION
Management accounting refers to the presentation of accounting information in appropriate form
that is beneficial in ascertaining and maintaining the proper record of each and every transaction of
business entity on accrual basis. It also ensures the managers in performing all relevant functions
regarding the business operations as well as the function planning, organising, directing and also
in controlling (Eierle and Schultze, 2013). Although the management accountancy pertains the
accounting methods, systems and techniques which ensures excellent knowledge and ability that
is beneficial for the managersin assisting tasks in order to maximizationof profit and
minimization of losses This report pertains the knowledge about management techniques,
methods and systems of accountancy which are helpful for the management of Jupiter PLC in
performing their management functioning in an appropriate manner which ensures proper
maintaining and ascertaining of operational information. In this report various management
accounting systems their reports, costing techniques, planning tools and the way in which
management accounting helps to resolve financial problems have also been discussed.
TASK 1
Management Accounting, systems and its importance
Management Accounting includes methods and concepts crucial for effective planning
for proper planning for selecting among business actions and for coordinating and controlling the
process of evaluation and interpretation of the performances. Beside this the management
accounting helps the management in performing the administrative and economic functioning
which pertain planning, directing and decision making, it leads to increment in effectiveness of
operational activities of business entities like Jupiter PLC. There are several importance of the
management accounting and systems.
Helpful in planning:It is the essential part of business entity like Jupiter PLC as useful
in its management activities which involves forecasting and budgeting for future. management
accounting systems ensures contribution to entity's cash forecasting and also for financial
planning by facilitating the information about the interest rates, costs and revenues will prevails
in future. besides this, the management accounting helps the entity in preparation, monitoring
and controlling accordance with agreed policies and procedures. the techniques of management
accounting in process of standard costing and budgeting (Granlund and Lukka, 2017).
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Helpful in Controlling:Management accounting systems are helpful for business entity
like Jupiter PLC in process of standard performance and setting the entity's standards in real
results like variance if any. it is possible by the technique of Variance analysis. the variations are
the material facts for the mangers of the entity as they are responsible for them. responsibility
accounting helps in this process.
Helpfulin Decision Making:Themanagementaccountingprovidesthe adequate
information regarding the business operational activities and it the entity like Jupiter PLC in
maintaining the efficiency in decision making and also ensures the management in avoiding the
delays in decision making.
Different types of management accounting system are as follows:
Cost accounting system:It is used by the management of Jupiter PLC in order to
determine the cost of all the activities that are performed by the organisation. it guides the
managers to set the appropriate cost so that large number of customers get attracted toward the
organisation.
Price optimisation system:This system is used by the managers of Jupiter PLS to
analyse the mind set of customers so that appropriate price can be set for all the products that are
offered by the company. This is very beneficial for the company as it can help to determine the
actual price which needs to be set for the products.
Inventory management system:It is mainly used by the manufacturing companies who
want to keep a track record of all the inventory which is involved in the production process. This
is used by the managers of Jupiter PLC to keep detailed data of all the inventories so that
productivity can be enhanced. This system is very beneficial for the company as it can help to get
the exact information of inventory.
Job costing system:In Jupiter PLC it is used to analyse the cost which in involved in the
different jobs that are performed by the company according to the specification of customers. It
is very beneficial for the organisation because it can guide to analyse the exact cost which ic
related to various tasks that are performed by the organisation.
Explanation regarding the methods and system of management accounting
The management accounting involves various functions such as planning, controlling and
decision making and for performing all these functions there is the requirement of managerial
reports which are prepared with the help of this concept and its planning tools (Mussnig, 2013).
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