Management Accounting and Types of Management Accounting

MANAGEMENT ACCOUNTING
1

Contents
Contents...........................................................................................................................................2
PART 1............................................................................................................................................4
P1 Brief description of management accounting and requirement of different types of
management accounting..............................................................................................................4
P2 Methods of management account reporting...........................................................................4
PART 2............................................................................................................................................4
P3 Statement of income through marginal costing......................................................................4
PART 3............................................................................................................................................4
P4 Explanation of advantage and disadvantage of planning tools..............................................4
PART 4............................................................................................................................................4
Uses of management accounting technique in order to resolve financial problems....................4
CONCLUSION................................................................................................................................4
REFRENCES...................................................................................................................................4
2

INTRODUCTON
Business organization used to build sustainability in the market applies management
accounting strategy. Management accounting is procedure of recording, analysis, collecting and
Interpreting business records in effective way through which mangers take decision regarding
best alternative for business. TO understand the concept of management accounting Western
Foods Limited has seen taken which is middle scale organization and provides food services in
market. Management accounting also knew managing or managerial business accounting. In this
report use of cost, inventory, job cost accounting system has been defined. This report includes
the way manners formulate business report and d calculate cost by using marginal and abortion
costing. It consider the benefits and drawback of planning tools and use of management
accounting tools in order to overcome the financial business problem to achieve goals and run
cash inflow in effect way in order to maintain sustainability for long term time period within the
economy.
PART 1
P1 Brief description of management accounting and requirement of different types of
management accounting
Management Accounting: It is part of accounting which utilized by mangers to record and
manages business transactions in a way through which organizations can easily able to take
decision. Management accounting is a procedure in which manages use different elements of
accounting to recognized the cost record system and present them in a way which help in taking
best decision for the business corporation. Management accounting principles are proved
guideline and give direction, theses are describe below
Influence: Principles are part of every aspect, management accounting principles based on the
fact that all the work done and activities operate with the use of management accounting
technique must be influent human resource of the organization (Zuhroh, 2019).
3

Relevance: These principles based on the assumption that every detail should be relevant and
related with the transactions.
Value: According to this principle business organizing should not operate any irrelevant
activities only those business operation which help in achieving of the goals of business
organization.
Trust: An organization apply their principle when the bond of every department is strong
connection. The information is relevant and trustworthy and all the documents and proof are also
show trustworthy data to run business activities.
Role of managing accounting: This branch of accounting plays major role for business entities,
which describe below
Budgeting: With the s of management accounting budget are prepared by applying various types
of budgeting technique.
Handling taxes: This will help in controlling cost and show profit in a way through which
organization enjoy tax benefits an ethically ay liability of tax.
Decision making: The main purpose of using this branch in management is to take effective
decision. It will help in taking relevant business decision.
Control cost: Management accounting tool use to cutting cost of wastage business activities and
save monetary resource which use for future time period (Anghelache,Căpușneanu, Topor, and
Marin-Pantelescu, 2019).
Manager use different kinds of management accounting system. Following are the system used
by Western Foods Limited.
Inventory management system: Every business specially manufacturing business organizations
need to storage their stock and maintain them for the time period until they are not delivering.
For managing inventory, stock management system implemented by organizations. In this
manger apply EOQ, LIFO, FIFO, method to identify the level of stock required and JIT
technique to manage the entire inventory in effective way. Which reduce the cost of stock
management.
Price optimization system: Success of the firm depends on the profitability ratio. Organization
increase their profitably rate when their sales rate is increase , goes this they take decision
regarding pricing of product. With the use of price optimization system manger decide pricing
strategy of product through which they generate profit. There are many types of pricing policies
4