Management Accounting - Galway Plc
29 Pages4503 Words37 Views
Added on 2021-02-20
Management Accounting - Galway Plc
Added on 2021-02-20
ShareRelated Documents
Management Accounting
TABLE OF CONTENTSINTRODUCTION................................................................................................................................3MAIN BODY.......................................................................................................................................3LO 1......................................................................................................................................................3P 1. Describing essential requirement of different types of management accounting systems...................................................................................................................................3P2. Different methods used for Management Accounting reporting.....................................5M1. Benefits of application of the management accounting system in an organisation........7LO 2......................................................................................................................................................9P 3 Calculation of income statement under marginal and absorption costing.......................9LO 3....................................................................................................................................................17P 4. Defining advantages and disadvantages of different planning tools of budgetary control...................................................................................................................................17M3. Analysing uses and application of the different planning tools....................................20LO 4....................................................................................................................................................22P5 & M4. Different types of management accounting systems available for resolving the financial problems................................................................................................................22CONCLUSION..................................................................................................................................24REFERENCES...................................................................................................................................26
INTRODUCTIONManagement accounting is defined as the discipline dealing with the process ofgathering, sorting, analysing financial as well as non-financial information so as to preparereports providing deep insight to the managers. It assist them in making business decisionsfor accomplishment of business goals.It further assists in the company in preparation ofmanagerial reports, records, and accounts with available information, statistics and otherfinancial as well as non-financial data. This helps the management and employees can indecision making related to business operations and investment. The present report is based onGalway Plc. which is amanufacturing firm. The present report will discuss different types ofmanagement accounting systems for organization for making profit. Further the report willdiscuss about the concept of management accounting reporting and its uses in decisionmaking. Income statement under Marginal and Absorption Costing of Galway Plc. Alongwith interpretation will be disclosed. It will also define budgetary tools & advantages anddisadvantages from different budgetary planning tools. At last, the report will shed light onsolving the financial problems with the help of management accounting techniques.MAIN BODYLO 1P 1. Describing essential requirement of different types of management accounting systems.Administration accounting system is defined as the process of preparing internalmanagerial reports for assisting in making of crucial business related decision. This systemassists company's administration inidentifying, and recording statistical as well as financialinformation for planning, decision-making process.
Essential requirements of different types of Management Accounting System in Galway Plc. are as follows:1.Cost Accounting System –This method of management accounting system isbasically related to the charge associated with the business operations and processes.The cost accounting system helps Galway Plc. in evaluating fair value incurred forcarrying on all the manufacturing and production process. This method also helps inassessing the level of profit margin with minimum operation fare by improving thequality of product and service. Company should make effective business plans andstrategies for controlling its expenses. This method consists of following sub parts:1. Job Order Costing Method – This method of accounting system helps indetermining the fee amount as incurred for producing a specific product or group ofproducts by the company (Otley, 2016). 2. Process Costing Method – This method assists in collecting and assigning ofcharge amount. This expense is assigned to units produced. This method helps thecompanies especially in case of identical units where large production process iscarried out.2.Stock Management System – This is defined as tool that allows to track goods andservices across business supply chain. However, this modify the whole spectrumspanning from order placement with vendor to order delivery to consumer and thisalso supports to map out complete journey of commodity. Therefore, one of thebeneficial aspect of this system is that it aids to provide transparency and this hashuge impact on bottom line of business. Additionally, the valuation can be done withfollowing techniques as are-
1.LIFO – It is a method that aids in accounting for undertaking calculation forinventory and cost of sales. Therefore, LIFO is defined as technique that operatesunder the assumptions that allows business owner to value inventory at the lesscost of amount. This is method that majorly use at time of high inflation. 2.FIFO – This is defined as technique that helps to estimate the value of inventoryat the end of accounting period. Henceforth, this based on assumption that firstgood purchase are also defined as first good sold. 3.Job Costing System – It is defined as process that aids to assign cost to the specificjob. Therefore, this widely use in construction industry as this aids to allocate cost toindividual construction project at a firm. Additionally, cost accounting is system thathas the ability to do job cost accounting and the end result has ability to accuratelydefine the profitability. It emphasizes on expenses associated with manufacturingprocess of specific commodity (Chenhall and Moers, 2015). Therefore, job order costaccounting aids to track expenditure of enterprise in terms to produce a commodity. Itis helpful method that accumulates the cost of components and assign these cost tocommodity. P2. Different methods used for Management Accounting reporting.Management Accounting Report is inclusive of standard financial statement such asbalance sheets and profit & loss account. This is defined as process that provide informationon number of values of management as this enables in judging the effectiveness ofresponsibility. However, management accounting reports works as to provide owners andmanagers the tools that aids to cut cost, better services and direct funds to high performingproduct and services. Herein, methods use for management accounting report are defined infollowing mode as-
1.Performance Report – The performance report is one of the most important reportthat assist the company in evaluating, assessing and reviewing the actiontowards theopeational function of business. It helps the management in making strategicdecisions and plans for the betterment, growth of the company. However, the formostresponsibility accounting performance report is budget that aids to compred actualand budgeted amount of controllable cost for department and their managers (Craigand et.al., 2018). By framing and implementing strategies and plans, business goalscan be achieved and improved.2.Cost Managerial Accounting Report – This type of management accounting reporthelps in determining the amount of expenses incurred for carrying on productionfunction of product or services of the company. While making this assessment, ittakes into account all expenses related to raw material, overhead, labour and othersfactors. This report helps the management of Galway Plc. in realizing the costing andselling prices of their products and services and in estimating profit from them in thenear future.3.Budget Report – It helps in making projections as well as estimates related to futurebusiness operations depicting the amount to be spent on carrying on the businessoperations. Budget are prepared on the basis of previous experience business has metwith. Galway Plc. by making budgetary plans and strategies can makes more profitand can conduct its business operations properly. It assists the management of thecompany in making effective use of the limited budgeted amount and resources(Maas, Schaltegger and Crutzen, 2016). With the help of budget report, a companycan make assessment of its performance as well as profitability level and can dealwith future contingencies and unproductive cost expenses.
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Management Accounting: Types, Reporting, and Budgetary Controllg...
|18
|4451
|27
Management Accounting Solution Assignment - Galway plclg...
|14
|5174
|45
Management Accounting and Cost Analysislg...
|20
|5667
|290
Management Accounting Systems and Techniques Assignmentlg...
|19
|5247
|45
Management Accounting- Excite Entertainment Ltdlg...
|16
|5310
|235
Assignment on Management Accounting on Oshodi plc Ltdlg...
|21
|6497
|17