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Report on Management Costing Techniques

   

Added on  2020-06-03

16 Pages4006 Words37 Views
MANAGEMENTACCOUNTING
Report on Management Costing Techniques_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1P1 Management accounting and essential requirements of various type of managementaccounting system..................................................................................................................1P2 Types of management accounting reporting.....................................................................2M1 Benefits of management accounting system and its application within the company.....3CASE 1............................................................................................................................................3P3 Calculate cost by using marginal costing method.............................................................3M2 Income statement by using management accounting techniques....................................4D2 Interpretation of financial reports.....................................................................................5TASK...............................................................................................................................................6P4 Explanation on different types of planning tools for budgetary control ..........................6CASE 2............................................................................................................................................7M3 Analyse the use of various planning tools and it application for prepare and forecastbudgets....................................................................................................................................7P5 Management accounting system respond financial problems.........................................10CASE 3..........................................................................................................................................10M4 Analyse how management accounting can lead organisation to sustainable success....10CASE 2&3.....................................................................................................................................11D3 Critically evaluate how planning tools respond accounting problems...........................11CONCLUSION ............................................................................................................................12REFERENCES..............................................................................................................................13
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INTRODUCTIONManagement Accounting is an application that assist the manager in formulation ofcompany's strategy, provide an accurate financial and statistical data to take short-term decisions.It is the process that produced management reports on weekly or monthly basis to internalstakeholders. The present report will be discussed on management costing techniques to preparefinancial reports (Tucker and Schaltegger,2016). The assignment covering all the aspects ofmanagement accounting system and apply within the organisation. There will be also study onthe various types of planning tool that is adopted by company for budgetary control. TASKP1 Management accounting and essential requirements of various type of managementaccounting systemManagement accounting is a branch of accounting that identifying, measuring, analysingand interpreting the financial and statistical data for the aim of achieving organisation's goals.The information is used by manager of a firm to establish the dynamic solution to enhance thebusiness performance. The management accounting system is a collection of financialinformation acquired from business operations. It involves fluctuation in cost of raw material,shift in inventory and sales data that will be turned into management report. It is necessary tointegrate an accounting system within the company as it will assist the manager to take theeffective decisions. The Company has adopted different types of management accounting systemthat will be described as follows:- Throughput accounting system:- It is an approach of management accounting thatsupports the managers by provide them essential information for the improvement inentity profitability. It is mainly focused on cash and not consider cost of products orservices at the time of its selling (Dulleck and et. al., 2016). It has applied by Company todetermine the theory of constraints that helps them to maximize profits by reducing cost. Cost accounting system:- It is a framework used by organisation for the purpose ofprofitability analysis, control cost and inventory valuation through determine cost ofproducts. It indicated which products gives profitability or not and it has ascertainedaccurate product cost. It helps the management accountant to provided a detailedinformation of cost that able to operate business function effectively.Difference between management accounting and financial accounting 1
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BasisManagement accounting Financial accounting ObjectivesTo helps the manager ofcompany in decision makingprocess through give data onseveral matters. To give financial data to theexternal stakeholder.Time FrameIt prepared managementreports in monthly or weeklybasis. It prepared financial reports inthe accounting period once in ayear.InformationFinancial and non-financialFinancial informationParties involved Internal stakeholdersInternal and externalstakeholdersP2 Types of management accounting reportingThe company has adopted various types of management accounting reporting that will bedescribed as follows:- Inventory management system: It is that type of management system helps theorganisation to maintain its stock on routine basis (Doolin, 2016). It keeps record all thebusiness transaction and track order, deliveries and sales. Cost accounting system: The system mainly involves process and order costing thathelps the company in accumulates cost for each job or process. It is adopted by them torecord activities related to manufacturing of products that assist management to takeeffective decisions. Job-costing system:It is a that process which accumulated the data related to cost withthe particular service job. It is useful for the management accountant to ascertainingcompany's accuracy that allow them to quote price of a product at reasonableprofitability. The system tracking cost of particular job and manage information thatoperate the business effectively. Price-optimising system: It is that system used by company to predicting the behaviourof potential customers at various different pricing of products or services (Chenhall andMoers, 2015). It assists them to ascertain pricing structure such as promotional pricing,discount pricing and initial pricing. The system is adopted to evaluate the price of2
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