Management Accounting System (doc)

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1...................................................................................................................................1
PART A...........................................................................................................................................1
Management accounting..............................................................................................................1
Management Accounting Systems..............................................................................................1
Benefits of management accounting system................................................................................3
Functions of Management Accounting........................................................................................4
Importance of Management Accounting (Integration)................................................................4
The techniques which are useful in management accounting reporting......................................5
PART B...........................................................................................................................................6
Annex (A): (QUESTION 3)........................................................................................................6
Annex (B):(QUESTION 1)..........................................................................................................7
ACTIVITY 2...................................................................................................................................8
PART A...........................................................................................................................................8
Uses of Different planning tools..................................................................................................8
Annex (3) (Question 3)..............................................................................................................10
PART B.........................................................................................................................................11
Comparison of the way in which management accounting helps to deal financial problems:..13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Management accounting defines as the process of preparing management reports &
accounts which gives proper & timely financial and statistical information which is required by
the management to take business decisions for the growth of organisation. It produces financial
reports which is useful for shareholders as well as stakeholders. Management accounting reports
reflects the amount of available cash, sales revenue generated, accounts receivables, raw
material, stock etc. It is helpful to analyse the business activities which is beneficial for the
management to take effective decisions which contributes in the success of corporation. To better
understand this concept, Jaguar Land Rover has been chosen which is a British Multinational
engineering company of cars and it established in United Kingdom. In this report there are
followings are covered There are various topics has been discussed in this report such as:
management accounting systems of reporting, functions of management accounting, planning
tools and technique which are used in budgetary control. Apart from this, it also discusses about
the issues which arises in the corporation in context to financial problems.
ACTIVITY 1
PART A
Management accounting
Management accounting is the process of preparing management reports & accounts
which accurate and timely financial and statistical data and information. i It provides the
accounting information which provide help the organisation to make different policies that is
helpful to conduct regular operations in order to achieve the goals and objectives. As the finance
manager of Jaguar Land Rover handles the accounting matters and provide the suggestions for
the growth of company so that it can accomplish its objectives (McLaren and Mitchell, 2016).
Management Accounting Systems
Management accounting systems are the internal system which is used by the company to
measure & evaluate their procedures in context to the management of corporation. To manage
the accounts, management accounting systems plays an important role. There are different
methods which can be implemented by the management in this context. It is helpful for the
Jaguar Land Rover to manage the business and make effective strategies for the growth of
1

company and relevant data and information can be provided which is helpful to take better
decisions. Management accounting systems are described as below:
Inventory management system: This system provides help the management to manage
the stock and keep records about the inventory so that unnecessary expenses can be minimised.
There is various software which can be used by the Jaguar Land Rover to manage the inventory
and it involves Netsuite ERP, Zoho Inventory, SellerCloud etc. Software’s can scan and gather
stock data. It also assists that how much stock is require on day to day basis and how much it is
require to meet the uncertainties and how much units are needed to be buy and at what time. For
the smooth functioning and production, it is very helpful for the organisation. As company use
this tool so that it can effectively manage the spare parts & articles of vehicles.
Price optimisation system: As per this system, an organisation can analyse how
consumers can respond to distinct prices for the products which are provided by it. By using this
method Jaguar Land Rover can set suitable price which meet the expectations of consumers and
help the organisation to fulfil its objectives and maximize the profits. By using this method,
management of company can analyse what prices are needed to be set so that it can generate
maximum profits by satisfying the demands of consumers. As Jaguar Land Rover can adopt this
tool to differentiate the prices set by rivals & maintaining reputation in the market.
Job costing system: This method has emphasis to collect information regarding the costs
associated to a particular job. It has emphasis to accumulate the information which is related to
the direct material, direct labour and overhead. By using this method, Jaguar Land Rover can
analyse accuracy of organisation’s estimating system that is useful to set the prices which is
affordable and help the company to generate maximum profits. This method has focused to
control the expenditures and reducing the risk by increasing the profits. By using this method
corporation can analyse the profit & loss of each job. To manufacture the cars where are various
process which are required to be follow and each process adds the value in that product. If
management use this system than it can know the cost of each job which incur while the
production process (Macinati and Anessi-Pessina, 2014).
Cost accounting system: This system is generally used by the manufacturing companies
to record the production activities which used in perpetual inventory system. This system can be
used by the Jaguar Land Rover in context to analyse the cost and it works by tracking raw
material which goes through various productions process & converted into final products. This
2