Management Accounting of Ever Joy

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
a) Differences between Management Accounting and Financial Accounting.......................1
b) Cost accounting system......................................................................................................2
c) Inventory management system...........................................................................................2
d) Job costing system..............................................................................................................3
e) Different types of Management Accounting Report..........................................................4
f) Importance of the department producing timely, accurate and relevant information.........5
LO 2.................................................................................................................................................5
a) Break even analysis............................................................................................................7
(b) Total number of ticket needed to be sold..........................................................................7
(c) Calculation for desire profit..............................................................................................7
LO 3 &4...........................................................................................................................................8
a) Planning tool and problem solving tools to lead the organisation to sustainable success..8
b) Financial governance to respond to financial problems.....................................................9
CONCLUSIONS............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Managerial or management accounting refers to the process of collecting, analysing,
assorting, identifying, posting of financial information in annual report that help them to make
effective strategies and achieve organisation goal. In general, it is also defining as the cost
accounting as it includes recording of each and every expenses and income for financial year.
Ever joy enterprises is one of leading company in UK that operate its business in leisure and
entertainment industry. As management accountant the overall aim of this unit is to introduce
the fundamentals of management accounting to this Ever Joy enterprises.
In this project report different management accounting system and report are discussed.
Various costing method are applied to to calculate net profit margin and importance of planning
tool that help in making budgets are shown. Different accounting approaches are discussed to
solve financial problem within company.
LO 1
a) Differences between Management Accounting and Financial Accounting
Management accounting is a process of evaluating different cost incurred in business and
operation activity to form internal financial annual report. Whereas financial accounting is
related to the process of planning, directing, monitoring, organizing and keeping fully control on
monetary and other resources of company. It is related to recording of useful financial data that
help manager to make decision related to operation and performance of employee so that
business goal could be achieved. There is various system of management accounting that help in
easy recording of cost, jobs, performance, price that have be involved in production process and
making company to work effectively. Management accounting system work at each level in
company that help managers to record every single transaction happened with organisation such
as non-financial information too (Mistry, Sharma and Low, 2014). There is different role of
management accounting such as to make sure about the security of financial data of company,
overview and pass opinion on all financial matter and helping manager to make strategies to
achieve company goal. Principle of management accounting are developed in the context to
provide help internal management and improve decision making process to support organisation
goal. These basic principle gives direction on identifying past, instant and coming information
that regard financial and non-financial data from internal and external origin.
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Difference between management and financial accounting:
Basis Management accounting Financial accounting
Objective
Role
This process is related to
developing report from financial
information that is helpful for
internal manager to make effective
decision and ascertain ways to run
company more efficiently.
It aims at providing both qualitative
and quantitative information to
manager.
This process is related to forming of
financial statements for external parties
which are shareholder, investors, public
regulator etc. with proper accepted
accounting principle.
It aims on providing true and fair value of
the financial position of company to
different parties.
There is various accounting system such as job costing, inventory system. In Ever Joy
enterprises management applies different management accounting system that help them in
proper working that have been discussed below:
b) Cost accounting system
Cost in management accounting means the process of reducing expenses from operation
and production process so that less expensive product is being offered to customer. This system
is related to estimating the faithful of cost of different product and services so that profitability of
company could be determined. In Ever Joy enterprises manager tries to control expenses and cost
involved on promotion activity and amount spent on improvement of entertainment services.
There are basically two type of cost direct and standard that are being formulate by manage of
company. Direct cost refers to that price that could be instantly attributed to the manufacture of
specific product for example deprecation and administrative expenses. Whereas standard cost
means estimated expense/cost that is going to be incurred on production of good and spend on
performance of services for example cost of labour, material and other overheads (Moser, 2012).
There are various types of costing techniques such as:
 Normal: These are direct cost that are assigned to jobs at the time they incurred.
Production overhead is being applied using pre-determine overhead rates.
 Actual: Under this cost production overhead is assigned when the actual value is taken
into account.
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