Integrated Management Accounting Systems and Management Accounting Reporting

Management accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
A. Explain management accounting and different types of management accounting system....2
B. Different types of the management accounting report with their importance........................4
C. Benefits of the management accounting systems...................................................................5
D. Critically evaluate how the management accounting systems and management accounting
reporting are integrated in your organization..............................................................................7
TASK 2............................................................................................................................................7
A. 1) what is marginal costing and absorption costing...............................................................7
2). Prepare the income statement as marginal and absorption costing method..........................7
B. Calculate the following with breakeven analysis...................................................................9
C. Apply the range of management accounting techniques and produce appropriate financial
reporting documents accurately................................................................................................10
D. Produce financial reports that accurately apply and interpret the data for the business
activities shown in the scenarios in Task 2 above.....................................................................11
TASK 3..........................................................................................................................................12
A. Advantages and disadvantages of budgetary control with examples...................................12
B. Applications of Planning Tools:...........................................................................................16
C. Management accounting systems to respond to financial problems....................................17
D. Management Accounting Techniques used in solving financial problems..........................19
E. Planning Tools......................................................................................................................20
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................22
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INTRODUCTION
Management accounting system plays an important role in the organization decision
making. It helps managers to perform process of decision making to attain organizational goals.
Present report will provide detailed meaning of management accounting and its systems. The
report consist of various type of report which are implemented inside Fontain motors which is
the motor dealership company. The assignment will criticize benefits of various types of
accounting system with various types of techniques like marginal costing and absorption costing.
Later, report will provide report suggesting implementing various techniques of management
accounting.
TASK 1
A. Explain management accounting and different types of management accounting system.
Managerial accounting is used by managers in organization. In these managers use
provision of the information of accounting in order to better inform other managers to take better
decision for organization.
It is the process of preparation of management reports and accounts that give close and
on time financial and statistical substance needed by managers to make day to day and short term
decision. It is also called management or cost accounting. It analyzes the business cost and
operation for preparation of internal financial report, accounts to aid managers and records for
purpose of decision-making. In the cost accounting, managers interpret these data and estimates
into knowledge that will finally be uses to escort decision making.
Different types of management accounting system that Fontain motors uses
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There are various types of management accounting system which can be used by the
Fontain Motors. Managers requires to perform an analyses by the professional of venture. The
following managerial information system are discussed under:
Cost accounting: It is an accounting method that focuses to inhibit Fontain motor's cost
of production by evaluating inputs costs of each step of production as well as fixed cost (Van der
Stede, 2016).
In this method, all the cost incurred in carrying out an activity or execute a purpose are
gathered, categorized, and transcribed.
Tax accounting: It is very different throughout the world. It focuses on the return on tax
and payments rather than preparing of public financial statements. It is used in Fontain motors,
as it determine taxable income, preparation of federal and state income tax returns planning of
the operations inside organization.
Financial accounting: Financial accounting helps the Fontain motor's in preparing the
financial statement and also identifying financial health of t business. The use of financial
accounting in Fontain motors is that it accumulate and report on financial information about
performance, financial position, and cash flows of a business.
Management accounting: With the help of these financial statements', management of
Fontain motors helps to take decision to achieve organizational goals.
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Accounting system design: It is a computer based data system which tracks all records
of Fontain motors. It considers single or double entry, account code structure, cash or accrual
basis, Divisional representation, Reports, Procedure, controls etc.
Non for profit accounting: This type of accounting techniques do not have any
commercial owner. In this system funds are generated in accounts and get utilized for welfare of
the society (Tucker and Schaltegger, 2016). It will be used for social care and health service,
technical development, donation etc.
Auditing: Auditing is systematic analysis of financial data of Fontain motors. It is a
systematic and independent examination of books, accounts, statutory records, documents and
vouchers of an organization.
Budgetary accounting: It is a procedure of account in which sum of money that Fontain
motors formed to consume and amount that really have been consumed are included in accounts
so that you can witness how much of budget is left.
Inventory and manufacturing report: Organization that produce the physical products,
particularly those in manufacturing with low responsibility endurance, find these reports
precious. They help centralization of information on inventory reimbursement, labor, and other
forms of expenses involved in the process of production.
B. Different types of the management accounting report with their importance.
Management accounting reports are important part of t business which make sure that the
organization have a complete picture about performance of business. A systematic detailed
report should be made in every four month to provide the financial position of the business
finances. This is particularly captious for small business owners, who can derive important
insights from these important representation (Senftlechner, and Hiebl, 2015).
There are various types of reports that are valuable for protecting a business and
managerial accounting report. Reports that helps in analyzing performance of business are
discussed under.
Budget report
This report is most fundamental report in managerial accounting. It helps the owner of
organization to understand and control cost of firm, whether it is a small organization or has
many departments (Shields, 2015). With help of evaluation of expenses in prior years, it became
possible to make estimation of budget for year and how to overcome cost.
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Accounts receivables aging report
Many business offers credit to customers, this type of report is crucial in this case. It
renders overview of credit balances according to age, include many categories for items that are
30, 60, and 90 days late (Renz, 2016). This can aid to set the credit policies to line up them with
customers' defrayal capabilities.
Job cost report
This report provides slight view of total cost accumulated from one single project
comparing to anticipated revenue obtained by that project (Nielsen, Mitchell, and Nørreklit,
2015). This type of reports helps manager to evaluate profit of specific types of jobs and
optimization of operation by focusing on jobs that are profitable.
Inventory and manufacturing report
Organization that produce physical products, particularly those in manufacturing with
low responsibility endurance, find these reports precious. They help centralize information on
inventory reimbursement, labor, and other forms of expense involved in process of production.
C. Benefits of the management accounting systems
Following are the benefits of the management accounting system.
Management accounting
system
Benefits
Cost accounting  It measures the efficiency than to maintain and
improve it.
 It provides information about profitable and non-
profitable activities (Messner, 2016).
 The good cost accounting system destruct wastes,
losses and inefficiencies by mending t standard for
everything.
Management accounting  The actual performance in comparison with budget is
done by management accounting
 With application of both budgeting and planning
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