Management Accounting: Types, Techniques, and Applications

Management accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems.................................................................................................1
P2 Different methods used for management accounting reporting.............................................2
D1 How accounting system and reports are integrated in organization processes......................4
Task 2...............................................................................................................................................4
P3 Calculation of cost by using appropriate technique of cost analysis .....................................4
M2 Application of range of technique that produced to financial reports ..................................4
D2 Produce financial reports that are applying accurately and interpretation of data for running
business........................................................................................................................................4
Task 3...............................................................................................................................................5
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control. .......................................................................................................................5
M3 Analyse the use of planning tools and their application that can help in forecasting ..........6
Task 4 ..............................................................................................................................................7
P5 Compare how organisations are adapting management accounting systems to respond to
financial problems........................................................................................................................7
M4 How financial problems can be resolve and management accounting system leads to
sustainable success ......................................................................................................................8
D3 How planning tools for accounting respond uses to solve financial problems......................9
CONCLUSION................................................................................................................................9
REFERENCE.................................................................................................................................10

INTRODUCTION
For every business organization accounting is the important aspect which uses by
organization for the purpose of managing all information and developing the business. This is
important for industry to focus on accounting information by recording, identifying and
managing the financial information that can help to make the right business decision by
operating all functions and activities (Bui and De Villiers, 2017). The main purpose of using
management accounting is to analysis the business situation and make the effective decision
which can help to continue the all activities and functions. This organization considered in
reports is Capital Joinery Ltd that is manufacturing organization selling products and services.
The management of such company plays important role by collecting and recording the
information. Topics are discussed in report are type of management accounting system, reports,
tools that uses for budgetary control, and system that uses to solve the financial problem
effectively.
Task 1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems.
Management accounting define as the action of building the organisation goal through
identifying, analysing and communicating data information to higher authority is known as
managerial accounting. It focuses on accounting goal at informing administration about
operational enterprise prosody. It include the data which is related to the monetary value, cost,
goods and services which is bought by the organisation. Budgets are also used the quantify
decisions, which is made in production planning. Management accounting used in internal
elements which is related to the account for business transactions.
There are different types management accounting system.
 Inventory management system: It is a chronological sequence approach to sourcing
and storing and selling inventory along with raw material, finished products. It also
defined as correct stock at up to the level, in right place, at the correct time and the actual

cost along with price. It is essential for Capital Joinery Ltd, to know about inventory and
manage the all functions effectively. This increases the business performance in
competitive environment (Quinn and Hiebl, 2018).
 Cost accounting system: This system is also known as product costing system, it is a
structure which is used by the organisation to approximation the cost of their goods for
profitability investigation, inventory rating and cost control. Capital Joinery Ltd is using
such system to analyse the cost that incurs while operation and manage the all functions
accurately.
 Job order costing: This process is also used for determination of cost for
manufacturing each goods. This method is used when business concern produce a variety
of goods which are antithetical from others and it calculate the cost for particular job. It is
important for selected organization by accumulating the cost and managing the all
performance effectively (Alawattage, Wickramasinghe and Uddin, 2017).
 Price optimization: In this process, use the mathematical justification, how consumer
will respond to different prices of its goods and services. This is appropriate and suitable
system for chosen organization which uses to set the prices of their products and services
after manufacturing and producing the products.
In the context of Capital joinery Ltd used these system on monthly basis or as per the
requirement which includes the variables and differences in term of financially aspects. Which
shows the overview of the financial management.
P2 Different methods used for management accounting reporting
For management of organization it is important to know how a business can be operated
and manage the all functions by developing the activities. Accounting reports are special
document of organization which is prepared by management by analysing the financial
information and situation of business. This provide the good understanding and information how
a business can be operate and manage the all functions. The selected organization is using
different types of accounting reports that are as explained below:
Budget report: Budget accounting report are very complicated in measuring
organisation outcome and also generated as complete micro enterprises and according to