Report on Management Accounting of Imda tech

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Management accounting, its functions and importance....................................................1
P2 Types of management accounting systems.......................................................................2
M1 Merits of using management accounting systems...........................................................4
D1 Evaluate the systems of accounting..................................................................................4
TASK 2............................................................................................................................................5
P3 Calculation of cost by using marginal and absorption costing..........................................5
M2 Application of techniques to produce appropriate financial reports................................8
D2 Application and interpretation of data..............................................................................8
TASK 3............................................................................................................................................8
P4 Different types of budgets with their advantages and disadvantages................................8
M3 Different planning tools.................................................................................................10
D3 Planning tools to solve problems....................................................................................11
TASK 4..........................................................................................................................................11
P5 Balance scorecard approach............................................................................................11
M4 Sustainable success by using management accounting.................................................12
CONCLUSION..............................................................................................................................12
REFERENCE.................................................................................................................................13

INTRODUCTION
In the global economy it is very important that all the financial aspects of the business
should be dealt with care (Kaplan and Atkinson, 2015). For this purpose the most important
technique that can be used is the management accounting. In this method there are various
processes that will be required to be taken into consideration and for that it will be needed that all
the relevant data should be collected, analysed and interpreted. In this various concept in this
relation will be discussed in context of Imda tech. It will include the meaning of management
accounting together with the various systems used in the business. In relation to cost there are
two methods which are absorption and marginal and they are also mentioned below. Lastly
balance scorecard approach will be used (Ward, 2012). This will be due to the various financial
problems that are present in the business which will be solved with the help of this approach. In a
business there are various types of budgets which are prepared and will be used and have some
advantages as well as disadvantages which will also be provided here under.
TASK 1
P1 Management accounting, its functions and importance.
In an organisation there are various methods and services that are used by the
management so that some addition can be made to the value of organisation. All of these in
combine will be be covered under management accounting (Bodie, 2013). With the help of
accounting all the relevant data will be recorder in the most appropriate manner and in this all the
policies and procedures that are present will be required to be complied with.
In the case of the changes it will be required that all the accounting is done by taking into
consideration the modification that are happening so that all the correct information and is
available and decisions can be made on the basis of that in the most appropriate manner.
Together with the management accounting there is other form of accounting also which includes
financial accounting and there are some differences that exist among them which are described in
the comparison table provided below:
Basis Management accounting Financial accounting
Information In this the information in relation
to both financial as well as non
In this only the financial data is
taken into account.
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financial transactions is included.
Purpose The main reason for this
accounting is to provide
information to the managers which
will help them in making decisions.
In this the main purpose is to prepare
the financial statements that will be
used by all.
Format There is no format that is specified
in this that will be used for the
accounting purpose.
In this format is specified that will be
used to make the financial
statements.
Time period They are made as per the wish and
requirement and no specified time
is mentioned.
Financial statements are prepared in
relation to a particular financial year.
Statutory
requirement
There is no such requirement
which is required to be followed.
It is required under law and is
compulsory to be carried out.
Significance of management accounting
Management accounting is such tool by which data is maintained in proper manner so
that all the decisions that are required to be taken will be made with the help of them in the most
perfect way (Burritt, Schaltegger and Zvezdov, 2011). Due to this the operations will be carried
out without any hindrance and the work will be performed in effective and efficient manner.
There are various benefits that are achieved due to this which are as follows:
 By using this the major decisions will be made in relation to various strategies that will
be used in the business.
 As by this it will be possible to determine which cost will be relevant and which will not
so this will help in reducing the expenses by eliminating such costs and also the resources
that are available will be utilised in the most judicious and effective manner.
 The business will be controlled in better manner as planning will be done by which
functioning will improve and this will lead to overall increase in the profitability of the
company.
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