Management Accounting and Reporting in Innocent Drinks

Management
accounting

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems...........................................................................................4
P2 Explain different methods used for management accounting reporting. .........................5
M1: Benefit of system of management accounts and its application.....................................7
D1: Integration of system of management accounting and reporting of organisation process7
TASK 2............................................................................................................................................8
P3: Cost analysis techniques & use of absorption and marginal costing...............................8
M2:Application of techniques of management accounting....................................................8
D2: Application & interpretation of financial reports:...........................................................9
TASK 3............................................................................................................................................9
P4: Benefits and disadvantage of various tools of planning...................................................9
M3: Analysing the various planning tools............................................................................10
TASK 4..........................................................................................................................................10
P5: Compare how organisations are willing to deal with the system of management
accounting to deal with different financial problems and issues..........................................10
M4 : Analysing the financial problems and management accounting.................................13
CONCLUSION..............................................................................................................................13
REFERNCES.................................................................................................................................14

INTRODUCTION
Management accounts is a function that consist of activities like gathering of data.
Analysing the collected data and then further reporting of overall financial information about
operations of a business. It is very helpful for the management in their decision making process
and can be used by management for their internal & external functioning. Management
accounting is very helpful in management and controlling of all function that are part of financial
department of a organisation (Youssef, Moustafa and Mahama, 2020). Present report is based on
Innocent drinks that is a medium sized organisation dealing in products like juices, smoothies
that are sold in different coffee shops, supermarkets and other different outlets. They are selling
approx 2 million smoothies every week. Present report is based on discussion of different
management accounting systems and methods that are used for reporting. The situation of
spending of COVID-19 Virus has resulted into business failing and not able to survive in the
external environment situations. So in case of Innocent drinks there is discussion of how the
organisation cam maximise the use of financial resources so that they are able to survive in this
situation. Further there is calculation of cost based on use of require techniques by application of
absorption and marginal costs. There is discussion of advantages & disadvantage for budgetary
control. Lastly there is comparison on how organisations are adapting to different systems of
management accounting.
TASK 1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems
According to Institute of management accounts: Management accounting consist of
function like planning, analyzing and making financial reports that is used by management to
have assistance in the process of effective implementation of various organizational strategies
(Maas, Schaltegge and Crutzen, , 2016).
Key functions:
Providing data: It consist of collection of information that is related with all different
functions of business such as helping all other functional managers in planning, controlling and
finally decision making.

Analysis & interpretation of data: The data has to be collected and then analysis is made
so that there can be proper & relevant statements that can be made with regards to decision
making.
Means of communication: Management accounting is a very important tool that can be
used for gathering information and then further analyzing it so that there can be proper
communication channels that can be established to achieve some comma goals.
Facilitation of control: business accounts have to be managed so that unnecessary
expense can be controlled and avoided.
Some of common accounting systems that can be used in Innocent Drinks for the purpose of
managing their accounting function are mentioned below: Financial accounting system: It is a main objective that can be used for maintaining of
financial accounts to collect fanciable data of all transaction that is debit and credit
account balance so that there can be formation of financial statements, income statements
are also used for controlling of all losses and detecting of errors (Otley, 2016). System of cost accounting: It is a framework that can be used for making correct
estimations of product cost so that there can be further analysis of profits and then
maintaining of inventory. It will help Innocent drinks in their different stages of
production so that efficiency is achieved by maintaining of wastes. Tax accounting: It is a system that is having focus on management of taxes so that all
rules & regulations are govern by the Internal revenue code in preparation of tax returns.
It is a system that is very helpful in making calculations of amount of taxes so that further
government intervention can be dealt.
 System of management accounting: It is a system that is helpful in measurement and
evaluation of process so that there can be timely information that can be communicated to
managers (Quattrone, 2016). Reports are also prepared according to the different
financial activities so that management of expenses can take place in a appropriate
manner in Innocent drinks.