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MANAGEMENT ACCOUNTING - 3

   

Added on  2020-01-07

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MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................3P.1 Management accounting and its mandatory requirements for making ................................3P.2 Methods used for the management accounting:....................................................................5P.3 Computation costs via adequate techniques of cost analysis to frame an income statementthrough marginal and absorption costs:......................................................................................7P.4 Benefits and disadvantages of different kinds of planning methodologies used forbudgetary control:.......................................................................................................................9P.5 Management accounting system is used to face the financial problems:...........................12CONCLUSION:.............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTIONManagement accountants are the qualified specialist through which company is able to maketheir strategy for the attainment of their set objectives and goals. With the help of managementaccounting practice, company will frame their strategy in order to attain the goals. Nowadays,decision making is an important task for making company sustainable(Talha, Raja andSeetharaman, 2010). It requires the quality team to make the effective decision for the viable ofthe firm. This is the main tool so that the management can be effectively made and make thecompany profitable. Now effective decision making is necessary for the development of thecompany and this could be done with the help of qualified management accountants. Now, thereis need for selecting the qualified staff and this is done via effective HR policies.P.1 Management accounting and its mandatory requirements for making Management accounting is the process by which reports and accounts are made and alsoprovides the exact and beneficial information which is needed by the managers of the companyto make their routine operation in a better way(Vaivio and Sirén, 2010). Management accountingis a different from the financial accounting and make monthly and quarterly reports for thecompany’s inner management or staff like production managers and managing directors so thatthey could frame their better policies and also assist in getting the sustainable development.Mainly these kind of reports displays the current cash, sales outstanding debts, company’s stocketc. and also assist the company to make trend chart, variance research. However, managementaccounting helps the company to frame the accounting information for providing effectiveinformation within the organization(0van der Meer-Kooistra and Vosselman, 2012). However,there are the three main areas where management accounting practices can be done. These are:1.Strategic management: Management accountant plays a crucial role for making theeffective strategy so that the effective policies could frame and also better decision can bedesigned. 2.Performance management: Management accountant emerges the practice of designingbetter decision making and handling the performance of the company. 3. Risk management: Management accounting helps the firm to effectively mange therisk and also try to eliminate it with the better performance for the firm’s division. With the help

of management accountant officer, company could able to manage their risk and that is why itcan focus on the development of the firm(Van Helden and et. al., 2010).However, management accounting main task is for planning and providing decision support forthe management of the firm for effective and efficient running of the company. Management alsoassist the company’s management in framing and presentation of financial and other decisionoriented information for formulation of strategy for the planning and control of the routineactivities of the company. There are so many accounting practices have been adopted since the emergence of thecorporate world. Traditional management accounting: Earlier, organizations were limited to the traditionalmanagement accounting approach that was mainly applied to cost accounting. And this was onlyconcerned to the cost of the product, as it is also depends on how to calculate and minimize thecost and additionally, helps to minimize the cost. During the modern company concept, a greatdeal of creation was transferred from people to huge organizations. The entire manufacturing andselling comprised of a few change forms which were altogether performed in these huge firms.Transformation procedure that some time ago were provided at a cost through market exchangesmoved toward becoming performed inside one association(Weißenberger and Angelkort, 2011).A great deal of internal transaction happened as transformation procedures provided their profitsto a next procedure inside the association as opposed to offering their profit available.Proprietors of these big organizations conceived frameworks to abridge the productivity bywhich labour and material were converted over to finished product. These traditional accountingsystem delivered proficiency measures, for example, cost every hour or cost per pound createdper process and per laborer.Lean accounting: this accounting technique is differ from the traditional accountingsystem. As, this accounting system does not only focus in the cost reduction process but also tohelp the management of the company to make the strategy for the producing the better outputwith the least cost. As this is the modern accounting technique(marginal cost. 2017). Leanaccounting helps the company to change the accounting , management procedure so thateffective manufacturing process can be done. Lean accounting technique enhanced the cost asstandard costing implement the labour and overheads cost. There is only one negative impact oflean accounting which associated the standard costing in the manufacturing process. Lean

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