Management Accounting: A Comprehensive Guide to Planning, Costing, and Reporting

Management accounting
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Table of Contents
Introduction......................................................................................................................................4
LO1: Demonstrate an understanding of management accounting systems.....................................5
P1 Explain management accounting and give the essential requirements for different types of
management accounting..............................................................................................................5
P2 Explain different methods used for management accounting reporting.................................8
M1 evaluate the benefits of management accounting systems and their application within an
organizational context................................................................................................................10
D1 provides a critical evaluation of how management accounting systems and management
accounting reporting are integrated within organizational processes........................................11
LO2: Apply a range of management accounting techniques.........................................................12
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costing......................................................................12
M2 Apply a range of management accounting techniques and produce appropriate financial
reporting documents..................................................................................................................15
D2 Produce financial reports that accurately apply and interpret data for a range of business
activities.....................................................................................................................................16
LO3: Explain the use of planning tools used in management accounting.....................................17
P4 Explain the advantages and disadvantages of different types of planning tools used in the
budgetary control.......................................................................................................................17
M3 Analyze the use of different planning tools and their application for preparing and
forecasting budgets....................................................................................................................19
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LO4: Compare ways in which organizations could use management accounting to respond to
financial problems.........................................................................................................................20
P5 Compare how organizations are adapting management accounting systems to respond to
financial problems.....................................................................................................................20
M4: you should analyze how, in responding to financial problems, management accounting
can lead organizations to sustainable success............................................................................23
D3: how planning tools for accounting respond appropriately to solving financial problems to
lead organization to sustainable success:...................................................................................24
Conclusion.....................................................................................................................................25
References......................................................................................................................................26
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Introduction
Many types of problems and challenges are faced by business organizations in modern business
scenario and management accounting system is very useful to handle these problems. This
assignment report contains information about some management tools which are very supportive
of cost control and decision-making process. The assignment also defines management reporting
system which is very important in order to manage the coordination between different
departments. Cost determination is must in order to manage the cost at the appropriate level and
this report illustrates summery about two cost methods which can be used in effective cost
control. Budgets are also an important part of managerial work and appropriate budgeting helps
to manage the business operations in a profitable manner. After studying this assignment report
user will clearly understand the importance of management planning tools for a business
organization and also, how can a business use management tools to ensure the sustainable
success in future.
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LO1: Demonstrate an understanding of management accounting systems
P1 Explain management accounting and give the essential requirements for different types
of management accounting.
In the carrying out of the operations in an effective manner it is required that proper information
shall be used and for that management accounting systems shall be used. They will be providing
the company will all the relevant information. There are several such tasks which are to be
undertaken in the business and will be including the use of this data. Some of them are planning,
controlling and directing and motivating. By them, all the set objectives of Zylla will be fulfilled.
In order to attain the best results, it is required that proper functioning shall be made and for that
plan will be prepared in which it will be specified that what all activities are to be carried out and
in what manner. This will be prepared with the help of the information that is collected in the
process of management accounting (Bukenya, 2014). The plan shall be communicated to all the
relevant parties so that they can have the directions in respect of it. They will then be used to
perform all the operations. On the basis of that Zylla will also be able to set the control system by
which control will be made on all the activities. In this company will also be using certain
principles which are of causality and analogy.
In addition to management accounting, financial and cost accounting are also carried out and
with the help of them, remaining processes are undertaken. There will be need of them as all the
departments can use them in the manner by which they can attain their targets. There are certain
differences which exist between them which are as follows:
Management accounting Financial accounting
This is used in the process such planning and
controlling which are used in the business.
The main decisions which are taken with the
help of this are related to investments and this
will be used by the outside parties.
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There will be functioning which will be
performed in relation to a particular
department.
There will be processes which will be
performed for the whole company.
This is at the option of the company to
undertake this process or not.
There are several such requirements which are
to be mandatorily complied with under this
process.
There are no policies and standards which are
to be followed and so is the format.
The company will be required to prepare all the
reports in the format which is fixed under
standards.
There are several such systems which help in collection process which is undertaken in respect
of the information and they are explained below in detail.
Cost accounting systems: By the help of this system all the cost which are incurred in the
business are determined. For these various methods are there which will be used and they include
standard costing in which budgeted amounts will be used (Zaleha Abdul Rasid, et. al., 2014).
Then the actual costing is used in which all the actual expenses will be undertaken. Another one
is normal costing which is also used by the company.
Price optimizing systems: The profits of the company depend on the price which is charged by
the company. For this, there is the need to determine the cost as the then only price will be
determined. There will be various strategies which will be used in this. All of them are divided in
cost based and market-based. In the base of the cost-based method will be taken as cost and then
there will be certain profit which will be added to it (De Toni, et. al., 2017). In market-based
methods, all the market forces will be considered and some of them are market penetration
pricing and skimming method.
Inventory management systems: There is the stock which is to be retained in the business in a
required quantity and for the determination of that all the knowledge about important aspects of
that factors shall be gained. In this process, there will be the use of economic order quantity
technique which will be helpful in this case. The valuation methods will be undertaken so that
the appropriate value will be determined.
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