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Management Accounting Assignment - ABC Ltd

   

Added on  2020-10-04

15 Pages4877 Words51 Views
Management Accounting

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3Management accounting and different types of management accounting system.......................3Different methods of management accounting reporting............................................................4Benefits of management accounting system. ..............................................................................6Evaluation of management accounting system and reports........................................................7TASK 2............................................................................................................................................7TASK 3..........................................................................................................................................10Explain Advantage & disadvantage of different type of planning tools which is used forbudgetary control.......................................................................................................................10Analyse different planning tools and it's applications..............................................................12TASK 4..........................................................................................................................................12Comparison of companies with use of different system to respond financial problems...........12Analysis of financial problem in respect of management accounting which lead theorganisation for the success.......................................................................................................13Evaluate how organisation system adopt different management accounting system................13CONCLUSION .............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTIONManagement accounting is refers to process of examining, collecting, reporting and recoding of important financial information related to company that support internal manager to make meaningful decision in order to increase profitability and productivity (Bedford, 2015). In managerial accounting, they uses the provision of accounting standard that support them with better information to decide matter in an organisation so that overall performance can be improved. In general, the process of forming management accounts and reports that deliver faithful and suitable information so that evaluation can be done. To better understand the conceptof management accounting ABC Ltd has been selected which is a medium sized enterprises in the manufacturing sector.In this report, various management accounting system and report are discussed. Report also shows costing system calculate net profit, assorted planning tool that support in budgetary control process, compare ways in which organisation could use various system to solve financialproblem. TASK 1Management accounting and different types of management accounting systemIt is a process of maintaining reports and accounts which help the organisation to identifyactual and accurate information related to business transactions. In the management accounting,manager have to manage daily activities which is related to operations and other relatedfunctions of management. It will further help the manager to take their decision on the basis ofavailable accounting information. Different type of management accounting system and their essential requirements: Management accounting system include managerial accounting which contain theinformation regarding their finances and make it confidential report for internal users such asmanager, owner, R&D etc. Basically this system majorly focus on cost of product & services andbuild strategies to reduce their product cost. There are four type of management accountingsystem which help the manager to take their decision according to it. Inventory management system: - With the help of inventory management accountingsystem organisation can track their whole supply chain. It will help the manager to make itupdate about the availability of stock in their business. Because if it is not working in effective

manner it can affect inventory in term of shortage as well as wastage of raw material. Forexample: ABC Ltd face operational issues due to the shortage of stocks and it will affect theproduction level as well as profitability of the organisation. Inventory management systemprovide a proper process to maintain their supply chain and also identify the requirement of stockat the time of production (Kastberg and Siverbo, 2013). Price Optimization system: - Price optimization help the manger to calculate demandand how it is vary according to different price level. It is a mathematical tools for theorganisation which provide information regarding inventory and cost of the product. Thisprocess help the ABC Ltd to set their product price and meet with organisational objective. Priceoptimisation system help the business to perform well in the market and for the competitiveadvantage. It is a formal structure follow by the manager to meet with the requirement ofconsumers willingness to pay on a particular product. Manager of ABC Ltd follow this system toimprove their price policy and quality of their work. Job Costing system: - Job costing system help the manager to accumulate each productunit cost. This method used by the organisation when they produce products in variety and allitems are different from each others. They required separate costing for each product and thenmanager find a way to reduce each unit cost for the more productivity or profitability. Jobcosting system include three type of information such as direct material, labour or overhead.Manager of ABC Ltd follow this job costing system in the organisation it will help the businessto improve their production and profitability. Cost accounting system: - It is a management framework which help the organisation toestimate each product cost for the identification of profitability analysis, cost control andinventory valuation. This accounting system help the manager to find accurate cost of each unitwhich affect the profit margin of company. Manager of ABC Ltd follow this costing system toreduce cost and increase profit. ABC Ltd follow different type of management accounting system in the business which help them to analyse and identify accounting information. It will help the manager at the time of taking any decision regarding operations. Different methods of management accounting reportingIt is an accounting report which contain various confidential or non-confidentialinformation of the business and it also called cost accounting. Management accounting use the

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