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Management Accounting Assignment - KFC

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Added on  2020-10-04

Management Accounting Assignment - KFC

   Added on 2020-10-04

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Management Accounting Assignment - KFC_1
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INTRODUCTIONManagerial accounting is a concept of analysing operations & administration cost inorder to prepare managerial data that provide timely & relevant financial information. To takebusiness decisions it is very helpful and help the corporation to achieve its objectives. KFC,which is an American fast food company and known for fried chicken, is the selectedorganisation to comply the requirements of management accounting. The report covers theessential requirement and importance of various type of management accounting system. Typesof management accounting reports are illustrated with their integration with managementaccounting systems. Management accounting techniques such as marginal and absorption costingare also used to calculate profit and loss. Planning tools as activity based costing, cash flowbudgeting, benchmarking, discounted cash flow methods and break-even analysis. Apart fromFinancial analysis based on organisation's latest financial statements and to use managementaccounting tools to improve decision-making. TASK 1 Part 1A. Management accounting and different types of management accounting systems Management accounting is the term that is used to describe about accounting methods,techniques and systems. It is the procedure of analysing business cost & operations to developinternal financial statements which provide useful information to the managers in order to takebetter financial decisions which support the growth of business. Management accounting consistsof internal systems which a company uses to analyse & evaluate its process in context to themanagement of corporation. There are various management accounting systems which are usedby KFC and these are as mention as below: Cost accounting system: This system is useful to ascertain the cost of different products.This system is used by the business entities to anticipate cost of its products for profitabilityanalysis, cost control & stock valuation. It is required for KFC to evaluate which products areprofitable & which are not, it is analysed when company ascertain the accurate cost of products.With the help of this organisation can estimates the cost of its different chicken products (Otley,2016).1
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Inventory management system: This system is helpful in context to supervision of noncapitalized stock. There are various software available which help the company to manage andcontrol the inventory which involves NetSuite ERP, Zoho Inventory, FinancialForce ERP etc. Sothis system is required for KFC to effectively manage the inventory related to its chickenproducts so that unnecessary expenditures can be minimise. It is require to manage the stock. Job costing system:it is helpful to gather data regarding cost associated to a particularproduction. This costing system is required for KFC to make record associated to expenses ofindividual job are useful to manage the business operations. The information may use byorganisation to assign inventory cost to manufactured goods. In this system there are mainlythree types of cost which are required to be identified such as: direct labour & material as well asoverhead (Parker, 2012).B. Different methods used for management accounting reportingThese reports are prepared to consider diverse features of accounting system related tothe business. It provides useful information associated to financial stability of firm and giveinformation about the financial performance of organisation. As the business transactions suchas: income statement, financial position statement are helpful to examine the growth ofcorporation. Diverse management accounting reports used in management accounting aredefined as follows:Budget reports: This report is used by the management of KFC to manage the expensesin order to anticipate profits.Budget reports are prepared so that manager can know how muchfunds are needed to carry out business activities. Budgets are prepared as per the size of businessand it is helpful to take decisions in order to cost cutting. Accounts receivable aging reports: These reports are generally prepared by associationsthat supplies the services and products on the basis of credit. For that purpose, it has to record theinformation of clients which includes invoice, amount, quantity and other details of customers.KFC generally avoid to provide goods on credit basis because it can affect the profits ifconsumers does not make payment after the due date. Performance report: This report can use by KFC in order to measure the performanceof its business so that it can know that it can know that company is earning profits or not. So thisreport is useful for the manager to ascertain the financial performance of firm which shows that2
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