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Management Accounting of 4COM

   

Added on  2020-07-23

16 Pages4572 Words34 Views
MANAGEMENTACCOUNTING
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INTRODUCTIONManagement accountingis the processes and tools that focus on the positive utilisation oforganisation resources, in order to support manager in their responsibility to increase customervalue and shareholder interest. The main purpose of the accounting system is to gain long termadvantages for the cited company (Ihantola and Kihn, 2011). It consist of continuousdetermination of the cost of product and services, data for managing and controlling operationsin order to measure the performance. The primary information those are more valuable for themanagers are fulfil through through analysis short term and long term decision regardingaccounting of financial transactions. The project report consist of four tasks which covers significance of accounting systemand it use in organisation growth. How various types of accounting system and reporting areuseful for the company are explained under this report. At the same time costing method can beeffective in calculation of net profit for the cited company. The report also covers various typesof budget and its merits and demerits in development of an organisation. Overall projects discussabout how company can overcome its financial problem which are arises in an businesses.TASK 1P1: Management accounting and its essential use in an organisationAccounting are related with collecting, recording and summarising of financial data inthe company's books of accounts. These are used by the company in planning and controlling oforganisational operations. It is interrelated with the management to make effective decision forthe growth after analysis financial statements of the 4COM company. The short term and longterm goals are depend upon the financial position on the company from the past few years. It isevaluated with the aims to get positive results in future time. The prime objectives of thecompany is to generate maximum profit with its available resources. In that context, accountingsystems help and provided right direction to the company to invests their capital in the rightplace. It is observed that financial statements are considered as one of the important aspectswhich is analyse the productivity and performance level (Hansen, 2011). The accountinginformations are used by the managers to get competitive advantages over the other. In order toidentified the position of the company managers are continuously prepare report as on regularbasis. It will help them to estimate total costs which are incurred by the company during the1
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production process. The major aspects of the accounting systems are used to get timely andaccurate results from the inputs. The overall reports are prepared and submitted by the managersto the top management in order to take appropriate decision regarding future growth of thecompany. A perfect planning can always begun with the right kind of accounting system carriedin an organisations. These all done in order to achieve organization as well as individualobjectives. In earlier time managers are not able to maintain their record because they are usingmanual system to do so (Endenich, Brandau and Hoffjan, 2011). But with, the implementation oftechniques and latest technology it changes the complete scenario. Now, there are most effectivesystems available with the company which can be applied in order to achieve its desire objective.Types of management accounting systems which are used by managers are explainedunderneath:Cost accounting system: According to this system, total estimation of costs are analysedwhich are incurred during production process. On that basis, various decisions are framed andprices are set for the product produced. It includes various costing methods such as, Normal,standard and actual costing.Price optimisation system: It is said to be an important aspects of accounting which areuse by 4COM in their operational activities. It is based on the concept that evaluate pricesensitivity of customers, whether they are able to pay for there products. The company observethat how customers react towards different prices fixed by the company for there products.Inventory management system: Under this, overall control and monitoring of stocks ofthe company are determine. It is the responsibility of the managers to over looks all the level ofstocks which are stored into the factory. Job costing: In this system of accounting, the process through which costs a citedcompany is incur to a particular job an individual and business concern is associated with. Itmainly used when the products are produce and are sufficiently various from each other. Batch costing: It is very similar to Job costing as costs are determine by a batch in-spiteof a individual product. It is indicated with a batch number which consist of production year andbatch lot.Some essential aspects of accounting systems are:2
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