Management Accounting Systems and Reporting: A Comprehensive Guide

Management Accounting A1
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INTRODUCTION
Management accounting is the process of managing internal operational activities of the
business. It support the managers through providing financial or non financial information for the
decision making purpose (Azudin and Mansor, 2018). Management accountant needs to address
all the activities which happening around the business or which can affect the productivity as
well as profitability of the company. This report based on Tesco Plc which is UK based
supermarket chain and it was founded in 1919. This assessment covers the several topics such as
understanding of management accounting systems and applies the range of accounting
techniques to calculate the overall profit.
MAIN BODY
Task 1
P1. Explain the different management accounting systems
In all the business enterprises the managers are using various types of systems for recording
and analysing actual performance of business. All of them are known as management accounting
systems. It is very important for all the entities to make sure that they are using all of them
properly as it can help to keep detailed information of progress of entity. In Tesco Plc different
types of management accounting systems are used which are as follows:
Cost accounting system: It is mainly focused with recording all the costs that are resulting
in expenses for the entity. With the help of it, the managers of Tesco Plc analyse the actual costs
of carrying out the operational activities (Dierynck and Labro, 2018). It guides them to figure out
all the causes of costs and formulate effective strategies so that all of them could be controlled
for the purpose of enhancing profits. The essential requirement of it for the organisation is that it
helps to determine actual costs of operations which are beneficial for formulation of future
strategies.
Price optimisation system: Managers in most of the organisations use it to determine the
best rates for the items that are offered to the customers so that they can buy it and their
expectation level could be met. Tesco Plc is using it to make sure that it sets such prices for all
the products and services that are sold by it to the customers which can meet their expectation
and help to meet the organisational objective such as good profits, satisfied clients etc. Essential
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