Management Accounting of Zylla
16 Pages4730 Words55 Views
Added on 2020-07-23
Management Accounting of Zylla
Added on 2020-07-23
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Management Accounting
TABLE OF CONTENTSINTRODUCTION......................................................................................................................3P1 Explaining management accounting along with the essential requirements of differenttypes of system.......................................................................................................................3P2 Presenting different methods that can be used for management accounting reporting....6P3 Calculating cost using marginal and absorption costing technique..................................7P4 Explaining benefits and drawbacks of different types of planning tools that can be usedfor budgetary control purpose................................................................................................9P5 Comparing how organization adapt management accounting system for respondingmonetary issues....................................................................................................................12CONCLUSION........................................................................................................................13REFERENCES.........................................................................................................................15
INTRODUCTIONManagement accounting field of finance is highly concerned with the preparation ofreports regarding internal operations. Now, with the motive to track performance and takingappropriate decisions business units lay high level of emphasis on using managementaccounting tools. Hence, MA is the process of recording, analyzing and evaluatingperformance which in turn helps in devising suitable plan for the organizational growth aswell as development. This report is based on Zylla, a manufacturing company, which isplanning to introduce some changes in the operations with the motive to attain success.Hence, for managing changes in the best possible way Zylla wants to undertake managerialaccounting techniques. In this, report will provide deeper insight about the managerialaccounting systems and reporting aspects that can be undertaken by Zylla. Further, report wilalso shed light on the MA tools that can be used for planning purpose. Report also reflects themanner in which marginal and absorption costing system helps in making assessment of costand profit margin. Besides this, report also entails how financial issues can be addressedusing MA techniques. P1 Explaining management accounting along with the essential requirements of differenttypes of system Management accounting is the process which lays emphasis on analyzing businesscosts and operations. Such system is used by the manager for preparing financial report andrecords which in turn aid in business decision making. The main motive of manager behindundertaking management accounting tool is to develop competent strategic and policyframework that pursuit organizational goals (Soltani, Nayebzadeh and Moeinaddin, 2014).Zylla’s manager can make appropriate day to day and short term decisions by usingmanagement accounting. Moreover, it assists in tracking performance, forecasting andplanning pertaining to the business operations. Zylla need to make focus on undertaking below mentioned management accountingsystems such as: Job costing: By using job costing method, manager of the firm can assess cost andthereby becomes able to set suitable price of products and services. Under job costingmethod, emphasis is placed on summing up of cost pertaining to material, labour andoverhead (Job costing, 2018). By using such tool, manager of Zylla can trace specific cost to
individual projects. Hence, job costing method helps company in assessing whether cost canbe reduced in later jobs or not. Hence, using job costing method Zylla can set suitable priceand become able to get appropriate profit margin.Advantages Helps in determining the profitability of job Prevents duplication of work and helps in making estimation about similar job Assists in evaluating quality of workFacilitates cost control and profit maximization Disadvantages Expensive and time consuming in nature In this, there is the absence of specific methods in relation to differentiating direct andindirect cost occurring in the process Job costing method requires close supervision During inflation, comparison of job cost becomes meaningless Cost accounting: Aim of such method is to capture company’s cost of production byassessing input cost undertaken at each step. Along with this, cost accounting system alsolays emphasis on recording information about fixed expenses such as depreciation, rent etc(Cost costing, 2018). Hence, such MA system provides detailed cost information whichmanagement requires for controlling current operation and making plan about the near future.Cost accounting system of MA offers following benefits and drawbacks to the business unit:Advantages Helps in reducing cost and identifying reasons pertaining to profit or lossCost accounting system provides high level of assistance in make or buy decisionsPrice fixation and cost control Disadvantages It furnishes past information, whereas management is concerning in relation to takingdecision about the future Cost accounting system does not provide suitable solution when capacity in partiallyutilized.
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