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Management Accounting - Babcock International Ltd Assignment

   

Added on  2021-01-02

22 Pages5466 Words438 Views
MANAGEMENTACCOUNTING

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3ACTIVITY 1....................................................................................................................................3Management accounting and requirements of different management accounting system.........3Different methods for management accounting reports..............................................................5Integration of management accounting system and management accounting report sin theorganisation.................................................................................................................................6ANNEX A........................................................................................................................................6ANNEX B......................................................................................................................................12ACTIVITY 2..................................................................................................................................13Different planning tools and its advantages and disadvantages................................................13ANNEX C......................................................................................................................................17Different tools of management accounting system used to solve the financial problems........18CONCLUSION..............................................................................................................................19REFERENCES...............................................................................................................................21Online........................................................................................................................................22

INTRODUCTIONManagement accounting is the accounting which helps the managers in decision makingand it includes planning, decision making. management accounting system helps in preparationof reports which is used by the internal stakeholders of the company.Babcock International Ltd is the multinational business or corporation which is UK basedcompany . The company is specialised in managing the complex infrastructure and assets. thisalso provides the skilled and engineering services which helps customers to improve theirperformance with reduction ion costs.The present study includes different types of Management accounting system and reportswhich helps the managers in aiding decision making. Computation of income statement usingdifferent costing techniques will also be explained in the report.Furthermore, the report will include different planning tools and management accountingtools which will helps the organisation in solving their financial problems and ensuring financialstability.ACTIVITY 1Management accounting and requirements of different management accounting systemManagement accounting is considered to be the accounting which involves partnershipof the management decision making, planning and performing the management systems and italso leads in providing the expertise in the financial reporting and controlling in order to assistmanagement in the formation and implementation of the organisation strategy(Yigitbasioglu,2016).Management accounting system helps in efficiently preparation of the internal reportswhich helps in aiding the managers of Babcock International Ltd to make effective and efficientdecisions. This system involves different systems of accounting which generally involves cosaccounting, job costing system, price optimisation etc( van Helden and Uddin, 2016). whichhelps in making different decisions related to different activities in the organisation.Management accounting plays essential role in the organisation as it performs differentfunction which includes effective and efficient planning, organisation, controlling and thedecision making . These are considered to be the most important role performed by mangers andare possible with the efficient implementation of the management accounting systems.

Some different management accounting system are as follows:Job costing systemThis system is considered to be the method of recording and accumulating the cost orrecording of the cost of a each product or manufacturing job rather than the entire process. Withthe help of this method and system , mangers and accountant of the organisation' are able to trackthe cots which incurred on each job in order to maintain the data which is used to be relevantdata in the operations of the business(Temelli,2018).It is the system which helps in monitoring the costs and expenses which are assign to themanufacturing cost to each of the product and also enables the managers to keep the track of thejob expenses.Price optimization systemThis method is the program or tool which helps the mangers in calculating that how muchdemand varies at the different price levels which helps in combing the data and the informationon costs and the level of inventory which helps in recommending the best price to charges inorder to earn improve profits and also to make the most useful and efficient decisions in theorganisation. This method is generally used by the mangers to find out the best price of the goodsand service son order to generate good amount of profit( Sutheewasinnon, Hoque and Nyamori,2016). This also use the mathematical analysis to determine that the customer's response todifferent prices for the company's product and services through using different channels. Priceoptimization also helps the business organisation in determining the best price which will helpthem in achieving their objectives of maximising operating profit.Management accounting reports are the reports which are generated by using the datathrough financial accounting and is also used for making decisions , controlling and planningfunctions. These reports helps the managers and organisation in planning, regulation, controlling,decision making and also helps in measuring the performance. These reports are generally different from the financial accounting as these reports helpsthe internal stakeholders by providing them useful information which helps them in adding thedecision making and it also emphasis on the planning and controlling purpose( Schaltegger andBurritt, 2017). This reports are basically generated by collecting and tracking the data fromdifferent departments by measuring their performances and also helps in making them present inmore understandable manner .

Different methods for management accounting reportsThere are different type of management accounting reports which helps the internalstakeholders of the Babcock International Ltd and some of them, are as follows:Budget reportsBudge reports are considered to be the most essential reports of the organisation as ithelps the business in understanding the costs and expenses of the business and also helps themto control the costs .this reports help in measuring the performance the company and in largeorganisation, individual budget reports are made for each different departments(Otley, 2016). Company focuses on achieving their goals and objective by matching their actualperformance by budged and through using these reports they are able to know the reasons for thedeviation so that in future they can take corrective measures in order to eliminate the deviations.this reports help in analysing overall performance of the business for trimming cost andimproving the performance as well.Account receivable ageing reportsThis reports are considered to be the critical tool in the organisation as it helps inmanaging the cash flow if they are extending the credit to the customer of the business. Thesereports generally includes the maintenance of the separate columns for invoices which are 30days late, 60 and 90 days late and by using these reports it can be helpful for the manger to findout the problem for company' collection process( Sutheewasinnon, Hoque and Nyamori, 2016).Through this reports, organisation can make the powerful and tighten policies for the customerswhich are unable to pay their debts.Performance reportsThese reports are created by the organisation in order review the performance of thecompany and its staff . In large organisation departmental performance are also generated so thatperformance and activities scan be measured on the basis of departmental functions. For makingkey strategic decisions mangers generally make use of these performance reports(Otley, 2016). These reports also helps in awarding the individuals of the company on the basis of theirperformance reports also helps in finding the reason foe the difference between the actual andestimated performance in order to make further decision in context to direct the performance ondirection of the achievement of organisational goal( Muda, and et.al.,2017).

Integration of management accounting system and management accounting report sin theorganisationManagement accounting system are the system which helps the mangers in generating the mostuseful information for the organisation which helps them in making the most useful and efficientdecisions(Messner, 2016). This system involves cost accounting system which is further thanhelps to prepare and present the costing reports which helps the Babcock International Ltd inmonitoring and controlling the cost of the products and organisational activities. Othermanagement accounting system includes job costing system, price optimising, inventorymanagement system. These all system helps in preparing and presenting the Individual field data throughwhich individual reports can be made for the different activities and useful information can begenerated which ultimately helps the business in making the most efficient decisions and also inreviewing and controlling the activities in order to run the entire business activities in thedirection of the achievement of organisational goal and implementing effective and efficientorganisational process of planning, organising and controlling(Maskell, Baggaley. and Grasso,2016). These all can be efficiently done through proper analysing the reports by internalstakeholders of the company.ANNEX AData: 1st periodHeadsAmount in (£)ProductionDining table(A)5000Chair(B)20000selling priceA590B90Direct materialA215B20Direct labourA90B30Variable production overheadsA25B5Fixed cots 410000

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