Management Accounting

Management Accounting

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1 Explanation of management accounting along with essential requirements of its systems.................3
P2 Description of different methods which are used to report information of management accounting. .4
M1 Evaluation of benefits of all the systems which are used for in organizations...................................5
TASK 2..........................................................................................................................................................6
P3 Calculation of costs with the help of different costing techniques such as absorption and marginal
costing.....................................................................................................................................................6
M2 Application of range of management accounting techniques............................................................7
TASK 3..........................................................................................................................................................8
P4 Explanation of budgetary control along with advantages and disadvantages of different planning
tools.........................................................................................................................................................8
M3 Analysis of various planning tool’s use in preparing and forecasting budgets................................10
TASK 4........................................................................................................................................................10
P5 Comparison of different organizations on the basis of use of management accounting systems to
respond financial problems....................................................................................................................10
M4 Management accounting to respond financial problems and the way in which it can lead entities of
sustainable success................................................................................................................................12
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................14

INTRODUCTION
Management accounting is the mechanism that helps the company determine the running
costs that are further useful for the production of financial reports. It was also included in the
decision-making process made by the business director. The report will be prepared for review
by outside stakeholders such as customers, stakeholders, prospective buyers or the organization’s
owner (Almasan and et.al, 2016). This report based on the AJ & Sons which is a consulting firms
and provide advise to people in regard of their business. The company has different types of
clients in different sectors and one of client Innocent drinks is facing the problem of COVID 19.
Consulting firm AJ & sons provide the advice to apply management accounting system and
reports in order to maintain business. This report covers numerous topics including such
accounting systems or multiple accounting methods that we used with suitable techniques to
measure product costs. Along with to control budgetary system apply the different planning tools
in business entity. Furthermore use management accounting tools and systems to methods for
addressing corporate financial difficulties.
TASK 1
P1 Explanation of management accounting along with essential requirements of its systems
Management Accounting: Management accounting is a term that involves variations of
decision-making, efficiency processes, designing additional strategy for managing assistances
when formulating and executing strategic plans. The main elements related to the framework are
preparing, managing and decision-making. In context of Innocent Drinks, management
accounting is used to classify, gauge, compile, review, examine, analyze and evaluate useful
information to development of a framework in order to prepare, assess extended reach data in
order to ensure resource-related consumption.
Management accounting system: A modern approach containing activities to sustain
processes, to calculate price levels, to provide data and to promote monitoring of accounting
identified as management accounting systems. It works in planning, performance assessment,
numerical monitoring with subjective information that provides form of communication
(Alsharari and Abougamos, 2017). Different accounting systems in use at Innocent Drinks are as
defined as: