Management Accounting: A Comprehensive Guide for Tech (UK) Limited

Management accounting

Contents
Introduction:..........................................................................................................................................2
Task 1: (Report).....................................................................................................................................3
Task 2:...................................................................................................................................................6
Task 3...................................................................................................................................................10
Conclusion...........................................................................................................................................16
References...........................................................................................................................................17

Introduction:
Being the manager of the company, Tech (UK) Limited, who is the producer and the retailer
of the mobile charger telephone and the other gadgets also, the manager has to maintain the
accounting for the proper functioning of the company. For proper management accounting,
financial report has to be prepared. Due to the lack of financial information in the company
cost accounting system, inventory system, job costing system, etc. and many other
accounting methods have been taken into consideration. The company also uses the
absorption and marginal costing methods for proper decision making. The company has also
make different budgets to forecast the future. The auditor of the company has also compared
the accounting approaches with other companies to examine their financial position.

Task 1: (Report)
Introduction:
The report consists of functions of management accounting systems. It includes the
inventory management system, cost accounting system. Difference between financial and
management accounting. Management accounting a tool for decision making. This report
highlights the facts of management tools and techniques.
a) Explanation of management accounting and the essential requirements of management
accounting system which entails:
I. Distinguishing Management Accounting from Financial Accounting.
Management Accounting: It is a managerial task performed by the top level managers which
involves a process of Identifying, Measuring, Analyzing, Interpreting and communicating
information of the organization. This helps the managers in decision making which able the
company of achieve competitive edge. Examples are product costing, research and
development.
Financial accounting: It must be done with the various accounting standards techniques. It
focuses on doing everything with financial aspects of the firm such as preparing financial
statements, financial report, cash flow, balance sheet. It focuses on external matters. It is
doing everything in financial aspects.
II. The importance of management accounting information as a decision making tool for
department managers.
Management Accounting is a tool which guides to decision making. As it includes the use of
financial information which is an interpersonal tool of decision making. Decision making is
what deciding in the matters of operational and financial and scientific basis, so
Management Accounting guides to that by the management techniques such that risk
management, ABC model approach and financial reports, cash flow analysis, absorption and
marginal costing.
Through advance preparation of plans and actions it helps the managers to guide to decision
making. Managers already know where, when and why of the business so it becomes easy to
guide them in decision.
iii) Cost accounting systems (actual, normal and standard costing)
Also called as costing system used by firms to know the cost of the product for the stock
valuation and profitability analysis. Estimated cost is monitored by the actual cost. This is a
helpful tool as it makes know that how much inventory in each stage of production what is
its cost and how much our cost of production is. It allows to record keeping of the inventory
at each level of production.