Report on Management Accounting Systems (Doc)
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Added on 2020-07-22
Report on Management Accounting Systems (Doc)
Added on 2020-07-22
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MANAGEMENT ACCOUNTING
TABLE OF CONTENTSINTRODUCTION............................................................................................................................................3TASK 1............................................................................................................................................................3P1 Management accounting system and essential requirements of different management accounting systems.......................................................3P2 Different method use for management accounting reporting..............................................................8P3 Calculation of cost using appropriate methods...................................................................................9P4 Advantages and disadvantages of different planning tools used for business control.......................12P5 Way in which organization adapt management accounting systems to respond to financial problems15CONCLUSION..............................................................................................................................................17REFERENCES...............................................................................................................................................18
INTRODUCTIONManagement accounting is the one of the important area which has significant importance for the business firms. In the currentreport, management accounting systems are explained in detail in terms of their essential requirements and suitability. Apart from this,in the report reporting systems are explained in detail and along with this marginal and absorption costing method are explain in detail.At end of the report, different ways that can be adopted to respond to financial problems are explained in detail and in this way entireresearch work is carried out in research report.TASK 1P1 Management accounting system and essential requirements of different management accounting systemsFrom: Budgeting officerTo General manager of White elephant restaurantSubject: Management accounting systemManagement accounting is the domain that encompasses varied tools and approaches that are used for calculation of cost in propermanner. It is basically an important tool that is used to compute overall cost of production in the business and measuring firmperformance in terms of cost control in the business. Business managers use number of techniques of management accounting intheir business so as to control cost in the business. Usually it is observed that firms face lots of difficulty in controlling cost in theirbusiness (Zainun Tuanmat and Smith, 2011). There are number of reasons behind this and one of them is that fluctuation remainsconsistently in the business and due to this reason it becomes very difficult task to control cost in the business. In order to solve thisproblem there are number of tools and methods that can be used in the business. One of these methods is variance analysis andbudgeting. Under budgeting method some of important parameters are determined and firm target to make its real expenditure
within these determined standards. By doing so it is ensured that cost will remain in control in the business. Apart from this, there isanother method variance analysis by using which it is identified whether firm perform well good or bad in its business. In caseperformance is good there is no issue by performance is bad then in that case management take in to consideration situation veryseriously and take action on time. By doing so situation is improved in the business. Varied management accounting systems aregiven below with their requirements.Cost accounting system: Cost accounting system is one under which cost of each and every department is done separately.Means that cost accounting system is different from other accounting system. This is because in this there is no specificparameter by considering which accounting is done in the business. Wired retail can use this accounting system in itsbusiness and under this it can collectively compute cost of all products and can segregate them in class of fixed, variable andsemi variable expenses (Fowzia, 2011). By adding all sort of expenses cost of product can be computed. Importance of thiscosting system can be estimated from the fact that in this cost is computed for each department separately and then same isadded to compute total business cost.
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