Management Accounting

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
P1. Explaining Management Accounting (MA) and different types of MA system along with benefits 3
P2.Expalining different methods used for management accounting reporting.........................................5
P3. Calculating cost using appropriate technique of cost analysis...........................................................7
P4. Explaining advantages and disadvantages of different types of planning tools used in budgetary
control...................................................................................................................................................10
P5. Describing how management accounting system are adopted to overcome financials problems so
that sustainability can be derived...........................................................................................................13
CONCLUSION.........................................................................................................................................14
REFERENCES..........................................................................................................................................16

INTRODUCTION
Management Accounting (MA) is the procedure which provides essential information for
making accurate decisions. In present working scenario competition has reached picked level
which requires firm to gain competitive advantages in order have smooth functioning. The
chosen organization is Associated British Food (ABF) which is processing and retail company.
The present report will include management accounting systems and their benefits in context of
organization. Current case study will give emphasis on different types of management
accounting reports. It will aid in understanding techniques of cost analyzing by showing
calculations through absorption and marginal costing. The different types of planning tools of
budgetary control will be explained in current report. It will compare how organization uses
management accounting for overcoming financial problems.
MAIN BODY
P1. Explaining Management Accounting (MA) and different types of MA system along with
benefits
MA is crucial in current changing scenario of manufacturing industry so that more
productivity can be derived. Management account systems are used to obtain the critical
information for increasing efficiency of operational decision making process (What is
management accounting? 2021). There are different types of Management Accounting System
(MAS) which can provide benefits to ABF .The following are types of MAS:
Job Costing System (JCS)
It is one of the essential system that provides assistance in determining cost of particular
job . In addition to this ABF will be able to know particular job’s profit and expenditure so that
essentiality of it can assess by firm (Ameen and et.al.,2018). There are various benefits which
can be provided by job costing system to organization in order to make process more efficient.
Benefits
 Associated British Food can accurate profitability information on individual operation
practices of business. It helps in taking decision regarding company’s irrelevant

components that does not provide required profits or reach BEP so elimination can be
done.
 Performance of employees can be identified by ABF through using JCS as benchmarking
tool.
 Mentoring cost through manufacturing process as it permits to assess cost at any stage of
production which is beneficial for firm.
Inventory Management System (IMS)
The records, control and maintenance of stock can be exerted by having inventory management
system in firm. ABF can be get numerous advantages by executing this type of system in
operational practices. The following are pros of IMS which will increase company’s efficiency.
 A manufacturing firm requires inputs for producing desirable end outcome therefore
having IMS can help in better inventory accuracy (Allain, Lemaire and Lux, 2021). It
will reduce firm’s wastage of resources by having sufficient knowledge regarding
company’s capacity and requirement.
 More productivity with increase profitability by saving cost through building good
relationship with suppliers and vendors can be obtained. It provides assistance in
accomplishing business objectives of ABF.
 More organized warehouse and customer experience can be attained by executing
inventory management system in concerned firm.
Price Optimization System (POS)
This is adopted by organization for evaluating customers response in respect to
company’s action of changing prices of products. It can also be used for identifying suitable
price of product which helps in attracting targeted segment. Market demand computation can be
done by having such system in business as it serves below mentioned merits :
 Better and quick decisions can be made by associated British food in order to accomplish
business goals in effective manner.
 Market transparency with saving time is one of the crucial component of POS which can
increase firm’s productivity and profitability.