Management Accounting System and Methods for its Implementation

MANAGEMENT
ACCOUNTING

Table of Contents
To: Management account officer.....................................................................................................1
From: General Manager...................................................................................................................1
Subject: GM covering management accounting and management accounting system together
with different costing techniques and reporting to enable the organization to implement them.....1
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
P1: Management accounting and its essential requirement:...................................................1
P2. Methods used for management accounting reporting:.....................................................3
P3: Computation of net income by using various costing techniques:...................................4
P4: Merits and demerits of planning tools used for budgetary control process:....................7
P5. How management accounting systems to respond financial problems:.........................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

To: Management account officer
From: General Manager
Subject: GM covering management accounting and management accounting system together
with different costing techniques and reporting to enable the organization to implement
them.
INTRODUCTION
Management accounting is the foremost method which is used in the firm to make business
prosperous and sustainable. A finance manager is held to be the responsible for handling various
firms activities and finance in an effective manner. The management accountants are the
professionally qualified candidates who use such tools within the firm in order to make their
business operations effective (Kotas, 2014). Under this report, various management accounting
tools are going to use in order to ascertain the tool which would be most efficient in terms of cost
that would lead to make business operations effective. 4Com adopts various tools to manage and
maintain their operations. Accountants also determines which method can sustain the
profitability in a great manner. This project also elaborates about how firm will use budgetary
process in order to control their cash flows and other operating expenses for managing their
financial statements. Various tools for budgetary, advantages and disadvantages are used under
this.
TASK
P1: Management accounting and its essential requirement:
MA reporting is the combination of financial and non-financial information which can be
used in order to demonstrates useful information for top management. This is accountable for
making an effective decisions for the betterment of a firm (Morales and Lambert, 2013).
Management accounting reporting plays a most important role for delivering essential
information to the management of the firm. This is wider than the financial accounting as this
covers overall management related information in its report. There is no such outline given by
any of the regulatory body within which MA reports can be made. Management accountants
while preparing the reports,must consider various stakeholders interest that could be used in
order to make their business operations defectiveness. With the help of this report, company can
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improves the effectiveness which is useful in order to get the sustainability. The main objective
of forming this report is to use firm's limited resources in a most efficient manner. It is most
effective tool that can be used in order to identify total cost incurred by the firm in manufacturing
goods and services. MA is the main components of planning process which renders the correct
way for manufacturing products or services. Although, management of the 4com plc always tries
to have more profits from its limited resources by applying adequate techniques. Although, firm
needs to incur major amount of money in order to attain their targets which is consistently
regulated and managed by accountants by ways various techniques. These techniques are used in
order to control costs and eliminates wastage of costs at the time of production process (Dillard
and Roslender, 2011). There is a duty of the accounting officer to adopt an accurate measures
firms financial related transactions. 4Com plc needs to make their their business operations so
effective and efficient. 4Com plc is small firm that are connected with the production of
electronic products in order to frame a perfect system to records their daily transactions few
accounting system that could by 4Com plc are as follows:
Inventory management system: This is required to make automatically manages
inventory system which is used in order to control, locate and manage objects and material. The
key objectives of such accounting system is to find out stock levels, order summary, sales report
and delivery timing. This is basically connected to those firm which deals in large scale
production of units, 4com is one of them.
Cost accounting system: This is mostly the system which is used by the firm in order to
gather, record, analyse and assess various method that are related to cost efficiency and
performance capabilities (Ahadiat, 2013). In order to assess the cost of a product, 4Com needs to
make their normal, standard and actual costing.
Pricing optimization system: This is the most important tools that can be used in order
to fix the price of the product. The company needs to fix their product prices in such a manner so
that the company could get most effective strategies in terms of price. Management accountants
will fix the price the so that company could get the optimum revenues by attracting most of the
customer.
Job costing system: This is the process under which cost of the lot is determined. This is
concerned to process via which determination of costs of a lot are identified. This job costing
system is totally used by the firm where the goods are made are totally different from each other.
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