Unit 5: Mangement Accounting

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Vocational Scenario orContextUnit5: Management Accounting_February 2018London School of Scienceand TechnologyPearson BTEC Level 5 HNDDiploma in BusinessUnit 5: Mangement AccountingAssignment Title:Mangement AccountingModule Leader :Mubashir QureshiInternal Verifier:Mohammad HaiderIssued on:19thFeb 2018Deadline:08thJune 2018Submitted on:Student Name:Student ID:Campus:Alperton/Luton/Birmingham (delete as appropriate)Pearson Registration Number:MAInstructions & Learner DeclarationAn electronic copy of your assessmentmustbe fully uploaded by thedeadline date and time.You must submitonesingle PDF or MS Office Word document. Any relevant images or screenshots must beincluded within the same MS Office Word or PDF document.The last version you upload will be the one that is marked. Your paper will be marked if you have indicated this asyour final submission.Review the mitigating circumstances policy for information relating to extensions.The file sizemustnot exceed 20MB.Answer the criteria in order, clearly indicating the pass criteria number.Ensure that all work has been proof-read and checked prior to submission.Ensure that the layout of your documents are in a professional format with font style Arial, font size 12 for the text,font 14 for sub heading and font 16 for main heading, line spacing 1.5 and justified.Use the Harvard referencing system; otherwise it will be considered as plagiarised work.Ensure that you back-up your work regularly and apply version control to your documents.Ensure that any file you upload is virus-free, not corrupted and not protected by a password otherwise it will betreated as a non-submission.You must NOT submit a paper copy or email of this assessment to any member of staff at LSST.Your work must be original with the appropriate referencing.I certify that the work submitted for this assignment is my own and research sources are fully acknowledged.Signature & Date:
IntroductionManagement accounting is a vital component of the accounting systems that help to identify thecosting activities of any firm and, by controlling the costing items, ensuring the profit for the firm.The manager should prepare the management accounting very carefully if he/she wants to controlthe costing activities properly and earn a profit for the organization. In this report, the significanceof management accounting will be shown in details considering Ryanair and how this accountingsystem helps the management of Ryanair to control its cost and earn a significant amount of profit.Like any other companies, Ryanair calculates per unit cost using two different types of approaches.One is called absorption costing method and the other is called marginal costing method (Bhimani,A. 2015). If we focus on these methods, we will have found that both of these methods have someadvantages and disadvantages. It is up to the management of the business about which method theyshould pursue. The difference between these methods will be shown with some relevant examples. Iwill also present income statement by considering these methods and how the budgetary controlstools have been presented.2Unit5: Management Accounting _February2018
Task-1P1. Defining and explaining the Management Accounting and different types ofManagement AccountingDate: 04 April 2018ToLine ManagerRYANAIRDear Sir,With due respect, I will try to define and explain the Management Accounting and its differenttypes.Management AccountingManagement accounting is an accounting approach to managing the cost structure of anyorganization in such a way that it helps the manager or decision maker to take the best decision forthe betterment of the organization. Management accounting is necessary for every business as itmanages the cost structure prudentially and provides sufficient information to the decision maker tomake a perfect decision. However, there is some difference between financial accounting andmanagement accounting. Management accounting provides quick information for decision-makingpurposes as it performs the accounting on segmentation basis (Belloc, H. 2007). The managementaccount is not like another accounting method. And in some cases, it doesn’t consider the accuracyor verifiability of the data rather it focuses on the relevance to take a decision in a crucial moment.There are some aspects of management accounting in which it performs its activities. These areidentifying variable cost, identifying fixed cost, break-even analysis, and contribution margin etc.Although management accounting is helpful for the manager to take a useful decision, it is notrequired by GAAP (Hansen, D. and Mowen, M. 2007). Because the information of managerialaccounting is solely for the managers and the external parties don’t need that. The distinctionbetween managerial and financial accounting are given below:3Unit5: Management Accounting _February2018
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