Management Accounting and Systems: Shell Case Study

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Management Accounting and Systems:......................................................................................3
Management Accounting Reporting...........................................................................................5
TASK 2............................................................................................................................................6
Using techniques for income statement......................................................................................6
TASK 3............................................................................................................................................7
Planning tools of budgetary control with merit and demerit.......................................................7
TASK 4............................................................................................................................................9
Financial provable of business and appropriate management accounting system.....................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Management accounting is classified as procedures and methods that concentrate on use
of organizational resources in order to help management staff in their task of maximizing
customer satisfaction as well as shareholder wealth (Kumarasiri, 2017). This emphasises on
information and details for entity's internal users and support their decisions taken in relation to
entity. This study contains comprehensive discussion on multiple aspects and areas of
management accounting and concerned systems along with core requirements in context of
corporation Shell. Company is running around more than 1100 service stations all around the UK
and is in partnership with Costa Coffee and Deli2Go. It also consists explanations on techniques
of MA and comparison of manner of utilization of MA in responding to multiple fiscal problems.
TASK
Management Accounting and Systems:
Management accounting is set of approaches mainly used for evaluating and recording
information on financial activities within organisations, for managers to utilize in planning,
progress, control, measurement and decision-making. Key role of management accounting in
business is to provide and circulate information/data to managing officials within information
especially for managing tasks and decision-making. Management Accounting encompasses
numerous accounting method and techniques that may be beneficial to management staff in
carrying out its functions of planning, coordinating Interacting and other related staff. MA's
primary functions are to gather, analyse and report data regarding company's operations and
financial resources.
Management Accounting Principles: The Management Accounting Principles are
guidelines designed to meet the key requirements of organizational management to enhance the
strategies of decision making, internal business operations, resource use, customer satisfaction,
and capability utilization required to optimally meet organizational goals (Larmande, 2016).
Here are tow major principles of MA, as follows: Principle of Causality: Principle of Causality allows modelling corporation's costs
depended on critical relationship among organisational inputs as well as outputs of
multiple resources used in distinct-distinct functions of organisation.

 Principle of Analogy: This principle regulate different users of managerial accounting
output information's quality to utilize involved knowledge or reviews through planning,
controls.
Management Accounting System: It regarded as specified frameworks utilised by
managing personnels to deal with different tasks of business and generate information for
managerial decision-making phase. In this regard following are several systems and their
requirements in context of Shell:
Inventory management system: It is a technique of management accounting which is
used to identify and monitoring each unit of product available in business entity. In other words,
inventory management system is the combination of hardware and software tools which helps
managers to analysing, controlling and maintaining stock level of the organisation. Managers
uses various technique to maintain stock level of their entity (Mkrtychev, Ochepovsky and Enik,
2018). They use ABC analysis, VED analysis, inventory management software’s to identify
minimum, maximum and dangerous level of their stock. Organisations apply this system in order
to effectively and efficiently manage operating cycle of their department.
Cost accounting system: It is a tool which is used by managers to identify cost of
manufacturing each product in order to control cost of inventory to maximize profitability level
of their organisation. Managers apply various techniques to calculate cost of each unite. Job
costing, process costing, and activity based costing are the part of this system. In this system
cost are calculated on the basis of allocation and absorption of expenses at each units.
Organisations uses this system to formulates polices and plans for optimum utilization of
resources through controlling cost incurred in manufacturing product.
Price optimization system: It is a framework of accounting system, managers uses this
system analyzing and selecting best price strategy for their product. This system helps to identify
factors affecting pricing policies of an organization. Managers take decision regarding selecting
price of product after analyzing market condition of their business environment. Managers uses
various techniques to maximize their profitability level through selling their product at best price.
Price strategy of an entity depends on the stage of their product life cycle (Ng and et.al., 2017).
Price optimization system also a part of management accounting which helps managers to take
best decision regarding selecting price which satisfied produces as well as customer also.