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Management Accounting INTRODUCTION

   

Added on  2020-10-22

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Management Accounting
Management Accounting INTRODUCTION_1

Table of ContentsINTRODUCTION...........................................................................................................................1LO 1.................................................................................................................................................1P1 Requirement of management accounting system...................................................................1P2 Various types of methods used in management accounting reporting...................................2LO 2.................................................................................................................................................2P3 Calculations............................................................................................................................2LO 3.................................................................................................................................................3P4 Advantages and disadvantages of planning tools used for budgetary control........................3LO 4.................................................................................................................................................4P5 Comparing the management accounting systems in responding to the financial problems...4CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6
Management Accounting INTRODUCTION_2

INTRODUCTIONManagement accounting is a process that use by management of organization. Financialreports and books are evaluated by managers and make decision for improve and developstrategies that helps in increase profit and sales of organization for achieve target and meetobjective (Rababa'h, 2014). Mangers prepare statement according to financial accounts becauseit includes price, cost and profit so that helps in make strategies and making decision. This reportwill be cover requirement of management accounting systems, methods of reporting, techniquesof cost analysis, advantage and disadvantage of planing tools.LO 1P1 Requirement of management accounting system.Management accounting is play vital role in organization that helps in making decisionbecause through this it evaluates and analyze all records and data than set goals according toperformance of organization. It uses by managers for make plan as well.Cost accounting system :- it is a type of accounting that includes all cost because through this itcompares actual cost and required cost of organization. So management make budget andanalyze all records of cost accounting of past and present year and make plan and budget forfuture. It includes budget, standard cost and actual cost and it also evaluates costs of alldepartments for evaluate gap in cost and revenue. After analyze it invests money and expandbusiness.Benefits:It improves the cost control system of the company.Adoption of this system results in reduction of wast6age of financial resources within thebusiness.Inventory management system :- this system keep all records about inventory of organizationthat means includes all record and quantity of inventory from production to warehouse and fromwarehouse to customers. It also includes inventory that keep in work in progress. This system isuseful and important for manufacturing organization for evaluate and analyze about allinformation of order, sales and deliveries of goods. Benefits:It helps in improving the ability of managers in monitoring the overall movement ofinventory.1
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With the help of effective inventory system, the managers can improve the efficiency ofbusiness in utilization of stock.Job costing system :- this system use by manufacturing organization that produce productsaccording to demand and order from customers so that thing helps calculate cost of productsindividually (Ismail, Ramli and Darus, 2014). This system helpful in organization that it producemore products according to take different types of order so that consume more cost in differentway and system keep all record that management evaluate and calculate all cost and revenue.Benefits:Adoption of job costing system helps in determining the effective price of the company'sproduct.It is useful for those businesses that produces the customised products.Benefits of management accounting :- This accounting is very beneficial for organization because it measures actualperformance of all departments (Oboh and Ajibolade, 2017). It helps in compare actual budgetwith required budget. So manager of organization easily take decision after evaluation andanalyze of data and reports. This accounting is very important and beneficial for organization. Management accounting system and reporting integrate with organization:-Management accounting system is a process that control all activities and managethrough evaluate of data and profit for make decision. Through this system it makes strategy forearn profit and met objective very effectively. All records are compare for make decision andmake plan for short and long term. Management accounting reports helps in measure actualperformance of organization and compare require budget and available budget. It consumes morecost and time. It evaluates and calculate profit on per product according to labor and material andother expenses.Difference between management and financial accounting:- Management accounting Financial accountingLegal requirementThis account is not important andrequirement of organization as legal.This account is mandatory for allorganization.Area of coverageInternal part only includes in thisaccount of organization.All external parts are includes inthis account.Types of data useBoth types of data use in this accountIt only use qualitative data.2
Management Accounting INTRODUCTION_4

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