MANAGEMENT ACCOUNTING TABLE OF CONTENTS INTRODUCTION
Added on 2020-10-04
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MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3LO 1.................................................................................................................................................3P1 Different types of management accounting system...............................................................3P2 Methods used for the management accounting report...........................................................6TASK 2............................................................................................................................................8LO 2.................................................................................................................................................8P3 Calculation of the cost with using appropriate techniques....................................................8TASK 3..........................................................................................................................................11LO 3...............................................................................................................................................11P4 Advantages and disadvantage of different types of planning tools in the budgetary-control...................................................................................................................................................11LO 4...............................................................................................................................................18P5 How the selected business can adapt the management accounting system to respondtowards the financial problems.................................................................................................18CONCLUSION..............................................................................................................................19REFERENCES..............................................................................................................................20Illustration IndexIllustration 1: Cash budget.............................................................................................................11Illustration 2: Production budget..................................................................................................11Illustration 3: Sales budget.............................................................................................................12Illustration 4: Net present value.....................................................................................................13Illustration 5: Investment rate of return.........................................................................................14
INTRODUCTIONManagement accounting consist important part in the successful results of the enterprise.It also helps to attain desired outcomes and results in proper manner. Further, systematicinformation helps to attain long term objectives and targets in the business environment. Withthis regard, present report is based on the Wiser which is recruitment company and dealing with50 employees (Hilton and Platt, 2013). It is new company which determines operations indifferent areas of the world. Beside this, recently company is new so that they face differentissues that create impact on operations and functions. For gaining insight information of thepresent report, it covers management accounting system that performed by the business tooperate systematic results. Furthermore, it includes methods that included in the business formanagement accounting. In addition to this, it discusses about the calculation of the cost withusing appropriate technique in the business. At last, it helps to frame and know advantages anddisadvantage of budgetary-control system. TASK 1LO 1P1 Different types of management accounting systemFrom: Management accounting officerTo: general manager Company: Wiser Ltd.Subject: Management accounting systems As per the IMA (institute of management accountants) “ Management accounting isanalysed as a profession that usually includes the process of developing partnerships process ofmaking decisions within an enterprise, formulation of plans and system of performancemanagement as well as providing an expertise in the methods of financial reporting and alsocontrol for supporting the management in development and application firm's strategy (Ward,2012).In Wiser, there are different consideration exist in which information need to be gain toperform different activities. In this consideration, the chosen company operate several activitiesthat helps to make effective functioning at workplace. Therefore, manager need to concentrate
on the relevant information to implement costing in business. It assists to gain creativeinformation to attain desired goals. Day to day operations and issues will be resolved to makesure creative performance will be considered at workplace. In the management accountingprocess, there are several measurements that helps to attain goals and objectives at workplace(Parker, 2012). Beside this, it is also consideration that assist to prepare financial statement,identify risks and provide creative information at workplace. In addition to this, informationalso helps to create strategic goals in the business. It is the helpful parameter to take correctdecisions at workplace. Along with this, decisions are also undertaken with management accounting system thatassists to develop corrective measurement. Hence, financial information in Wiser assists tocarry different aspects in the following manner:Traditional cost accounting system: In this aspect of the management accountingsystem, conventional accounting method will be implemented and carried. Hence,systematic work performance will be develop in the business environment.Furthermore, it is also used to implement cause and effect relationship method in theenterprise. Along with this, cost also incurred in the production method to designproduction process in the business (Fullerton, Kennedy and Widener, 2014). On thebasis of average method, allocation of the production cost considered important part inthe business. Indirect expenses also included such as labours hours, machine hours, etc.In addition to this, in the selected enterprise, this method also helps to find cause andeffect relationship that is beneficial to managers and leaders as well. Hence, appropriatedecisions will be take easily. It is very important to increase profitability and outcomes. Throughput accounting: This accounting system helps to create systematic workperformance for the products and services. It creates systematic way to operate differentactivities at workplace (Otley, 2016). Furthermore, in this consideration in Wisermanagement accounting system helps to focus on the constraints which could beimplemented in the manufacturing. It also assists to create systematic relationship withlabour turnover, raw material, etc. With this regard, quantity and quality of the serviceswill be increasing that make different benefits in the business environment. This methodalso ensure that efficient production and effectiveness also develops in the chosenbusiness.
Lean accounting: Lean accounting theory helps to ascertained new concepts in theWiser. It is the different accounting system from other methods. Hence, allocation ofthe cost considered performing systematic results at workplace. In the chosen business,it also helps to reduce wastage of products and services. As results, tactical methods arealso applied that assists to add different useful information in the business. Effectiveresults will be gain in the business in Wiser to save cost and increase profitability. Transfer pricing: Moreover, it is also method that implemented to develop systematicperformance at workplace. In this consideration, several elements are implemented thathelps to generate and create profits at workplace. In this way, process also includesproducts and services that implemented in Wiser. In the selected business, it isimportant to deal with several activities. As results, it leads to diminish negative impactfrom the enterprise. Amount also included to make outsourcing and produce creativeresults at workplace. Further, there are various important examples which are associated with the system ofmanagement accounting are discussed below:Cost accounting system: It is also considered as system of product costing that consista framework developed by management of Wiser for estimating the costs andevaluation of profitability (Figge and Hahn, 2013). Moreover, estimation of effectiveand accurate cost production is analysed as critical for the profitable business andoperations. It delegates an understanding to Wiser LTD about their products which areanalysed as more effective for them in the market.System of managing inventory: Significant method which has been utilized by themanagement of firm in order to control the cost of stock that remains in hand at end offinancial accounting year. Further, identified as component used in management ofsupply chain that provides its support in controlling the major flow of products towardsthe warehouses.Price optimisation: It is the utilization of mathematical analysis by Wiser Ltd todemonstrate that the ways through the clients will respond to different prices for theirservices through various channels (Key factors to consider in price optimization, 2017). Job costing method: This method has been used by management of Wiser Ltd toevaluate the cost associated with the providing individuals service or batch of services.
This method used at the time of developing some service in order to differentiate fromothers.Batch costing: Also considered as significant method which is used as cost method thatprovides support in development of products and services measured by the company instatus of batch rather than as individual term. It also involves the major comparison ofcost of different sizes of batches which has been produced by using different methods.It also helps in controlling the cost for managing the budget of selling prices of servicesand margin. P2 Methods used for the management accounting reportTo: General managersFrom: Management accounting officer.Company: Wiser Ltd.Subject: Management accounting report.Management accounting determines important part in the success of business. It alsohelps to prepare and measures financial statements. In this consideration, accurate and timelyinformation will be gather through implement different strategies in Wiser. Significance of these MA reports Supportive in analysing the actual cost and expenses.Help in controlling the budget for production of goods and services.Decline in expenditure and cost of overheads of providing services.Help in making important decisions (Peter Bogt and van Helden, 2012).Coordinative in analysing variation in performance of business.Provides information about rate of return on investments.There are some important methods have been identified that needs to be used by Wiser Ltd atthe time of reporting within management accounting system.Financial planning: Application of this financial planning help in undertaking ananalysis of business functions and supports the organisation by expanding their financialposition.Cost accounting: It is important method of accounting consist of a process of recording,
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