Management Accounting: A Comprehensive Guide for Business Success

BUSINESS MANAGEMENT ACCOUNTING
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Table of Contents
Introduction...................................................................................................................... 3
LO1: Demonstrate an understanding of management accounting systems.....................3
Explain management accounting and give the essential requirements of different types
of management accounting. [P1].....................................................................................3
Explain different methods used for management accounting reporting. [P2]...................5
LO2: Apply a range of management accounting techniques............................................8
Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costing. (You may use attached data or your
own) [P3]..........................................................................................................................8
LO3: Explain the use of planning tools used in management accounting......................11
Explain the advantages and disadvantages of different types of planning tools used in
budgetary control [P4]....................................................................................................11
LO4: Compare ways in which organizations could use management accounting to
respond to financial problems........................................................................................15
Compare how organizations are adapting management accounting systems to respond
to financial problems. [P 5].............................................................................................15
Conclusion..................................................................................................................... 18
Reference List................................................................................................................ 19
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Introduction
Business process in the last few years got very much complicated and even tough to
run in a systematic way. Therefore, many companies have adopted the use of
accounting management, which is considered to be one of the best way to handle
business operations. In this assignment, evaluation of system management from the
business context of Zylla is made to understand the effectiveness of system
management in the organization. Business accounting management is considered to be
a set of actions that are made to ease the complexity of the business process. Zylla is a
company that has business market in different parts of the world with its headquarter in
UK. This assignment will analyze the impact of accounting management in the business
process and this assignment will help the higher authorizes regarding the suitability of
accounting management in the business process.
LO1: Demonstrate an understanding of management accounting systems
Explain management accounting and give the essential requirements of different
types of management accounting. [P1].
Business accounting management is the set of activities through which an organization
makes effectives business process by reducing the various hindrances, which limits the
business performances. Management accounting is the systematic process, which
allows an organization like, Zylla to perform their business process in the required
manner. As Zylla, an international company, which performs business activities in
different parts of the world, it is very much necessary to adopt management accounting
in order to perform the business activities more effectively. Management accounting will
help the managers of the business to understand the business conditions more
specifically, which will allow them to make proper decision regarding business
strategies.
Financial accounting and management accounting are completely different activities,
which allow the business to understand the business process more closely.
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Management accounting and financial accounting differs in may areas and they are
discussed below:
 Financial management are activities that are limited by various rules that are
made by the standard boards of accounting while, management accounting are
not restricted by any rules and regulations.
 Financial accounting is compulsory for any business that is making business in
the market. Whereas, management accounting is not mandatory for any firm that
is making business in the market.
 Purpose of various external public of a business is met with financial accounting
while, management accounting does not meet any purpose of any external public
of the business.
Before implementing the management accounting in the business process of Zylla, the
managers of the business must look upon few factors like, management of the
inventory, cost accounting and costing of job. These factors will help the managers to
understand in which area there is need for management accounting. The following
factors and their systems are discussed below:
Inventory management system
The management of inventory is an essential part of a business because it determines
the sales of the business. It is important to make a smooth and effective sale in order to
grow the company, which can get managed by choosing the appropriate management
accounting system for inventory (Gluhovsky et al., 2016). Some of the effective
management accounting systems involves FIFO, AVCO and LIFO. The managers of the
chosen firm must understand the importance of these three systems to identify which
system can support the business and must adopt the suitable system. This will allow the
business to make proper sales in the market.
Cost accounting system
One of the essential factor that a business always consider is controlling the level of
cost and level of income and this system is designed in order to control these factors.
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