Management Accounting in Airdri

Added on - 21 Feb 2021

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Management Accounting
Table of ContentsINTRODUCTION..........................................................................................................................2Activity 1.........................................................................................................................................31: Evaluate management accounting and requirements of different types of managementaccounting systems.................................................................................................................32: Explain different methods used for management accounting reporting.............................53: Calculate costs using appropriate techniques of cost analysis to prepare an incomestatement.................................................................................................................................7Activity 2.......................................................................................................................................10Explain the advantages and disadvantages of different types of planning tools.................10Compare how organisations are adapting management accounting systems to respond tofinancial problems................................................................................................................12CONCLUSION.............................................................................................................................14REFERENCES..............................................................................................................................15
INTRODUCTIONManagement accounting refers to the application of professional knowledge and skills,tools and techniques for preparing information regarding accounting that proved beneficial formanagement to build plans and policies in better way.On other hand management accountingunderstood as an processing and presentation of accounting data and information that helps inevaluation of performance of the management in better way.This report is based on the Airdriwhich is a UK based company that specialise in developing the all kinds of hand dryers as perthe current market trends.This report is based on the importance of the management accountingwith requirement of various kinds of management accounting systems that helps in dealing ineffective manner. It also includes various kinds of management accounting reporting methodsthat helps in giving accounting information in better way. Further it includes various kinds ofcosts to prepare income statement to interpret right information from the data and statistics. Itevaluates advantages and disadvantage of various kinds of planning tools and techniques forcontrolling budget. At last it includes comparison in organisations by comparing accountingsystems to combat from financial hazardous effects.Activity 11: Evaluate management accounting and requirements of different types of managementaccounting systems.Management accounting in which involves to prepare and accumulating timely financialand statical data to accumulate information from business managers that helps in taking day today decisions in proper way(Apak and et.al., 2012). Management accounting is one of importanttool that helps in taking major decisions by finding out financial problems in the businessprocess by enhancing the performance of an organisation to deal in effective manner byaccumulating important knowledge and information. For an organisation it is very much
important to understand and evaluate the various kinds of management accounting systems thatare as follows:Management accounting system that vary as per their use and objective. Each and everysystem should be designed to collect or accumulate information as per the need of themanagement in taking important decisions.Management accounting system is an tool andtechniques that helps in preparing information for external and internal parties such asstakeholders, regulators and lenders to accumulate information in taking right kind of decisions.These are the most basis kind of management accounting systems that are as follows:Cost accounting system:A cost accounting systemis a framework used by organisations for estimating the costrelating to the products and services. It can be conducted to evaluate profitability of anorganisation, valuation of inventory and controlling cost factor . In that system cost allocationshould be carried out by using either traditional costing and activity costing method (Christ andBurritt, 2017). Cost accounting is a kind of accounting system that aims to evaluate corporationsproduction cost by taking inputs costs at each and every production step by including fixed costsuch as capital equipment depreciation.In context ofAirdrithey use cost accounting system toevaluate the cost associated while producing products and services in better way by evaluatingpurchasing capacity of their consumer base.Inventory management system:Inventory represents to the business's stocked goods and materials with terms stock andinventory often used interchangeably (Edwards, 2013.). Inventory is very much important forup to do a task or duty, put inputs for producing products to ultimate consumers.Inventorymanagement system is very much important that helps in enhance the cash flow of anorganisation, better reporting and forecasting capabilities and reduction in storage the costs of it.In context of Airdri theymanage each and every activity of inventory by controlling by trackingtwo major functions by receiving and shipping. The major aim of the inventory management is toaccumulate inventory levels and helps to minimize the issues of under stock and overstock. Byevaluating tracking quantities in all warehouse locations that ultimately helps in taking greaterinventory decisions.Job costing system:
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