logo

Management Accounting Assignment : Aon Consulting

   

Added on  2021-02-20

17 Pages2729 Words45 Views
ManagementAccounting

Table of Contents

INTRODUCTIONManagement or managerial accounting is an analytical tool that assists management tosummarise, analyse and prepare accounting data with help of financial and non-financialinformations which eventually helps them in planning, implementing, observing and decisionmaking (Abdelmoneim Mohamed and Jones, 2014). Management accounting involves variousaccounts and budgets in order to reduce costs and improve performance of internal factors. Forbetter understanding of the management accounting process, Aon Consulting, a medium sizemanagement and accounting consultancy firm has been chosen for providing consultancy toEssentra Packaging which is a manufacturer of tear tapes, labels, seals and other packagingmaterial, founded in 1911 by Percy Philip Payne with its headquarters in Nottingham,UK.This report contains knowledge and description of MA,various kind and advantages ofmanagement accounting system, different technique to calculate net profit and profitability havebeen used in company, importance of budgets and several ways are discussed to overcomeassorted financial issues of company. In additions it also see calculations of costs by using propercosting method to determine the net profit.TASK 1P1. Various types of management accounting system.Management Accounting: Management accounting is a process of analysing costs ofoperations and preparing budgets and other accounts for the top management so that it may assistthem to make planning and decisions in order to operate the activities and workforce within theorganization. This process helps the management to achieve organizational objectives bycontrolling costs, operations and employees.Managerial Accounting System:This Accounting system is a framework that consistspreparation of various accounts and reports for the use of interior users such as productionmanagement. This system works for recording the data and preparing the reports related to theoverall view of transactions and activities that can occur within particular time. The statementsalso provides assistance to Essentra Packaging in final accounts and financial statementpreparation at the end of financial year. The establishment uses various types of managerialaccounting systems are presented below:

Cost Accounting System: This method that helps the manufacturers of the company torecord the movement of various types of cost in relation to the manufacturing of each unit. Thesystem of cost accounting includes approximation of various fixed and variable overheads andcosts as well, allocation of costs to their original centres and absolute cost absorption. It alsoanalyse and examine the deviation between current results and budgeted costs. Theadministration of the selected company utilise system of cost accounting to estimate the servicesand product cost and evaluate the organizational profit. The professional cost accountants cansave the valuable resources and money eith the help of this system which can be utilised inimprovement of productivity (Bagautdinova, Kundakchyan and Malakhov, 2013).Inventory Management System:Inventory is the key factor to generate revenue in anymanufacturing firm. It is necessary to keep a proper record and control over goods produced bythe company. An effective inventory management system helps the management of the selectedfirm in tracking the information related to the stock of raw material, completion degree of WIPand availability of finished inventory in the showrooms and warehouses. Management of therespective firm is capable to make firm decisions related to the manner that should be chosen forthe purpose of warehouse and retail inventory management. By using inventory management,personnels of the company save time and energy which are used in other productive activities. Price Optimisation System:Accounting system that is used for the price optimization is atools that is considered by the management to evaluate the reaction and behaviour of thecustomers for various prices sets offered for a particular service or product. This method ishelpful in deciding optimum price for business offerings in order to recover all the productioncost and customer satisfaction may also be achieved with the desired profit. Essentra Packaginguses this system to set the prices of various products in different situations and markets inaccordance with the customer desires and requirements. The administration of selected firm canalso identify the unwanted and unrealistic time and cost consuming processes and control themwith the help of this system.Job Costing System: This system can be defined as a technique to calculate the cost of acustomised project or contract that is rendered by specific customer by estimating the cost relatedto specific items used in that task. This costing tool determines more accuracy of estimations.The cost accountant of Essentra Packaging take the help of this system to assess and handle theexpenditures for a customised job or project. This internal accounting system is essential as the

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Management Accounting: Characteristics, Reporting Methods, and Cost Calculation
|15
|4454
|64

Management Accounting: Types, Methods, and Cost Computation
|18
|4384
|52

Management Accounting Systems and its Applications
|18
|5329
|26

Management Accounting Systems & Techniques
|16
|4993
|449

Management Accounting and Cost Techniques
|17
|4874
|37

Management Accounting Systems and Techniques
|18
|4956
|32