Management Accounting: A Comprehensive Guide to Systems, Tools, and Applications

Management Accounting
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Contents
Introduction:..............................................................................................................................3
LO1: Demonstrate an understanding of management accounting systems..................4
P1: Explain management accounting and give the essential requirements of
different types of management accounting.....................................................................4
P2: Explain different methods used for management accounting reporting..............6
M1: Evaluate the benefits of management accounting systems and their
application within an organizational context................................................................7
D1: how management accounting systems and management accounting
reporting are integrated within organizational processes.........................................8
LO2: Income statement under marginal and absorption costing.....................................9
LO3: Explain the use of planning tools used in management accounting...................12
P4 Explain the advantages and disadvantages of different types of planning tools
used in the budgetary control..........................................................................................12
M3 Analyse the use of different planning tools and their application for preparing
and forecasting budgets...................................................................................................13
LO4: Compare ways in which organizations could use management accounting to
respond to financial problems.............................................................................................14
P5 Compare how organizations are adapting management accounting systems to
respond to financial problems.........................................................................................14
M4 Analyze how, in responding to financial problems, management accounting
can lead organizations to sustainable success............................................................14
References.............................................................................................................................17
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Introduction:
Management accounting is a tool for the effective management of business
enterprises. Present assignment describes the same. This assignment incorporates
definition and different types of management accounting system. Methods of
management accounting reporting are also discussed in this assignment. In this
assignment various gains of management accounting system and how management
accounting is beneficial for enterprises, is discussed in detail. With the study of this
assignment user can understand the techniques of cost accounting system. User
also enables to understand the Income statement under cost accounting techniques
like marginal and absorption costing. Budgetary control system also explained in this
report. Report describes how planning tolls of management accounting is helpful for
budgeting. various problems which are faced by business in day to day work and
how business organisations are using management tools for solving them is also
defined in this report. In addition, report defines relation of planning tools with the
sustainable success of business briefly.
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LO1: Demonstrate an understanding of management accounting
systems.
P1: Explain management accounting and give the essential requirements of
different types of management accounting.
Management accounting: management accounting is a system of examination,
inspection, and broadcasting of financial and non-financial data collected with the
use of cost and finance accounting for the policy planning of an organisation.
Management accounting tools provides support for manage the business activities
according to the goals of company (Kristandl, et. al., 2014). In addition, Management
accounting includes the finance accounting and cost system.
Management accounting process includes the three major steps. They are:
Image 1, steps in management accounting
By Author, 2018
Various types of management accounting system and the requirement of these
systems are as below:
Cost accounting system: cost accounting system is a procedure to examine the
cost of each product. This can be done on the basis of activity based costing or
historical costing. This technique is helpful in profit determination, cost reduction, and
inventory management (blocher, 2016).
Various needs of this system are:
 Proper availability of cost related data for analysis.
 Presence of internal control system.
 Coordination between different departments.
 Effective control on inventory in and out.
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Planning
Execution
contolling
and
monitering