Management Accounting Assignment - Waitrose
Added on 2020-09-08
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and essential requirement to use various accounting system........1P2 Different management accounting methods for management accounting reporting.............3P3 Calculation of cost and prepare income statement by using marginal and absorptioncosting.........................................................................................................................................4TASK 2............................................................................................................................................7P4 Budgetary control and use of different planning tool............................................................7P5 Use of management accounting in response to financial problems.......................................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................12
INTRODUCTIONAccounting is a helpful term which enable an organisation to maintain their financialrecords in an appropriate manner. All the accounting related information will include instatements of a company (Burritt, Schaltegger and Zvezdov, 2011). For long period context,financial statement get prepared on the other hand for short term decision making managerialaccounting concept has derive. Managerial accounting is a process in which all the informationwhich are related with regular operations are included. It enables managers to take beneficialdecision for the betterment and growth. This assignment is based on Waitrose which is one of thelargest super market chain of UK. Management of reference organisation have to use thisapproach in business for removing differences and deviation in their operations. This reportincludes, understandability of management accounting concept and different techniques whichare used to enable an organisation to prepare these statement. Along with this, there are variousplanning tools and techniques can also used by an organisation so that they can deal withfinancial problems in an effective manner. TASK 1P1 Management accounting and essential requirement to use various accounting systemManagerial accounting is a process which provides information to all the managementand authorities for internal decision making. This process involves preparing and timely focus onfinancial and statistical information to a business managers so that they become able to takedecision for short term and regular basis operations. Managerial accounting support in improvingperformance of a company by removing all short coming of a business organisation(Dillard2014). A keen focus will made by leaders and executives on all things and facts which takingplace in an entity (DRURY, 2013). This is completely differ from financial accounting whichleads to prepare for making strategies during an entire year. Financial data prepare and based onhistorical information but management accounting is totally differ from this and support inforwards looking. Managerial accounting promote confidentiality in report formation as this isfor internal users of a company. According to IMA which stands for Institute of ManagementAccounting define this term as “Management accounting is a profession that involves partneringin management decision making, devising planning and performance management systems, and1
providing expertise in financial reporting and control to assist management in the formulationand implementation of an organization's strategy”. Thus as per their context it get measure thatmanagerial accounting process assist strategy formulation and its execution in an adequatemanner. Along with this, it also enable a firm to maintain appropriate performance of their ownas compared to rivalries. Managerial accounting has several number of benefits which promote in effectiveperformance and operation (Elbashir, Collier and Sutton, 2011). Timely and accurate informationwill support management to make some informed decision about operational items in whichcutting of cost, increase in market budget etc. are some major factors. Another major benefit ofmanagerial accounting is to eliminate redundancy from business and conclude some beneficialjudgements. There are various types of management accounting system are used and introduce byscholars but some get selected for making appropriate records which are as follow: 1.Cost accounting system: This process usually used by the firms and business entities toestimate the value of their products and analyse profitability, inventory valuation and costcontrol (Cost Accounting Systems, 2013). It is quite difficult for an organisation toestimate the accurate cost of product. If they become able to ascertain this fact then thechances of profitability tend to rises. By using cost accounting system, management willable to measure the best product which is suitable in long term context and adequateactions can be taken on them. 2.Price optimising system: Another major work which have to execute by management isto ascertain the response of customers on different range of goods and services throughdifferent channels. Thus, management determine that prices which will aid them inmeeting with their objectives such as increase in operating profit of a business. 3.Inventory management system: With change in time, many companies make their processdigitalise. This help in performing and doing all the things in an appropriate manner.Inventory management system is a system which enable an organisation to identify levelof orders, sales and deliveries of product and services. By using advanced inventorymanagement system, company can determine the level of stock through such software. For forming a best and suitable value for the product and offer them at right price is one of achallenge for business. Waitrose have to determine the best cost which is suitable for their users2
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