Management Accounting: Explanation, Role, and Accounting Report Methods

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
TASK 1............................................................................................................................................1
1. Management accounting explanation.................................................................................1
2. Management accounting role as well as different types.....................................................1
3. Accounting report methods................................................................................................3
6. Critical reflection about management accounting application...........................................5
TASK 2............................................................................................................................................5
Covered in Appendices...........................................................................................................5
PART B ...........................................................................................................................................5
a. Advantages along with disadvantages of planning tools that are used for budgetary control 5
b. Different planning tools with effective applications..........................................................7
c. Comparison among two entities.........................................................................................8
d. Examination of the ways management accounting with responses to financial problems can
drive businesses towards sustainable success.......................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
APPENDICES...............................................................................................................................13

INTRODUCTION
Management accounting is the word utilised to define the accounting methods, schemes
addition to techniques having particular knowledge and power for assisting administration in its
task so to maximise revenues or minimising losses (Bartlett and et.al, 2016). The business
concern selected for this assignment is AstraZeneca Plc and TPG Processing Company that
executes their operations within manufacturing sector. The report provides the fundamental
requirement of several kind of managerial accounting system and analysis different method of
management accounting reports. Further, three years net profits are calculated through marginal
including absorption costing method for understanding actual position of company. It also covers
advantages and disadvantages of various planning tools along with comparison among the two
companies identify financial problem and resolve after applying management accounting system.
PART A
TASK 1
1. Management accounting explanation
Management Accounting – The term of management accounting is defined as technique
that is applied by company to analysis the different business activities than collect information
from different departments. In AstraZeneca Plc, accounting is utilised for the reason of deciding
status of an organisation. After that planning for future to acquired goals and objectives (Boyns,
Anderson and Edwards, 2014).
2. Management accounting role as well as different types.
Management accounting Role : Important part that management accounting plays at
concerned entity are to design financial along with cost controlling reports, to analyse relevant
costs, reporting information to other units and predicting future.
Management Accounting system – The particular system can be described as an
instrument that business executives use to maintain statistics so that choices can be made to bring
out daily basis operations. In AstraZeneca Plc, managers uses following systems to prepare
strategy and apply to get growth and success could be attained by the company.
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Different management accounting system – In the contest of AstraZeneca Plc,
discussed about different management accounting system that directors utilises to analysing the
position of institution. The detail description of all is underneath:
Cost accounting system – This system is mostly utilised by the manufacturing companies
due to gather detailed data in respect to cost of production and other functions. Director of
AstraZeneca Plc are using this system to determine accurate cost of each and every unit of house
hold appliances which are factory-made by it. It is essentially required for a company because it
directs management how to reduce cost from the products and make decision on the basis of
expenditures (Chang and et.al, 2014).
Price optimization system - It is essential for big and small organizations to set suitable
costs for all the products it sells to the customers. According to this system every company send
some piece for uses and take reviews from different types of customers. After analysis company
set trenchant price composition that will carry out the expectation of company and easily
purchase their products. In AstraZeneca Plc, this system is applied to set best appropriate price of
home appliances by it. It is essential require for company to know right price of their products
after analysing of market and existing products. As a result it will help to obtain long term
benefit like profit maximisation through grabbing attention of large customer number.
Inventory management system –The system is mainly applied by manufacturing
company to track record and monitor on production procedure. Inventory management system
helps to managing goods and their services in impressive way. In AstraZeneca Plc, with this
system managers produce different types of pharmaceutical commodities so there is required to
different types of raw materials. It also provide detail information to management so they are
preparing strategy to reduce wastages and proper utilisation of resources. LIFO (Last in Last out) – As per this system which inventories come in last that is used
for manufacturing procedure. FIFO (First in first out) – With in the method inventory management system which
commodities received early that will firstly used by companies for conduct
manufacturing activities (Chen, Cheng and Wang, 2015).
 AVCO (Average Cost) – The particular scheme of inventory management stock is used
for bringing out fundamental cost as per average cost basis.
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