Management Accounting: Techniques, Planning Tools, and Financial Problem Solutions

Management accounting
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Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
Task 2...............................................................................................................................................3
P3 Calculation of cost by using appropriate techniques of cost..................................................3
Task 3...............................................................................................................................................7
P4 Advantages and disadvantages of different types of planning tools used for budgetary
control..........................................................................................................................................7
Task 4...............................................................................................................................................9
P5 Compare how organisations are adopting management accounting system to respond to
financial problems.......................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCE................................................................................................................................12
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INTRODUCTION
Management accounting is the accounting term which is used by all business concern to
get productivity and profitability. This is the collection and provision of accounting which helps
to make right business decision. With the help of accounting, financial data and information is
collected by management that helps to attain the business goals (Otley and Emmanuel, 2013).
Administrators are related to the activities managers carry out in order to make profitable
decisions. The management accountant plays a role within the organization as tax accountant,
internal auditor, profit assessor and cost accountant. This is important for organisation to prepare
financial accounts and statements which can provide accounting information and right action that
increases organisational productivity and profitability. To understand about this Prime Furniture,
is selected that is growing East London based company that provides furniture to customers and
run business effectively. This report covers range of management accounting techniques,
planning tools which are used in management accounting and comparison of ways that can use
by company to respond to financial problems.
Task 2
P3 Calculation of cost by using appropriate techniques of cost
Cost: This implies the sum of money generated by market interests for the development
of goods and services. It is required in all companies because it helps to determine the cost of
producing activities. Kinds of costs are described as:
Absorption costing: It is a form of costing that has been assigned fixed and variable costs to the
cost center where consumption ratios are used. This means that the losses generated can be
recovered from the sales value of goods and services. It helps to measure the correct cost of
company operations in order to maximize productivity (Nielsen, Mitchell and Nørreklit, 2015).
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