Management Accounting Systems and Reports

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Management accounting system and essential requirements of its different types..............1
P2 Methods of management accounting reporting......................................................................4
TASK 2............................................................................................................................................7
P3 Difference between income statement made through marginal and absorption costing........7
TASK 3 ........................................................................................................................................10
P4 Advantages and disadvantages of planning tools which are used for budgetary control....10
P5 Adopting management accounting systems for responding financial troubles .................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

Report
From: Management Accounting Officer
To: General Manager
Subject: Report covering management accounting system and reporting along with different
costing techniques for enabling organization to implement them.

INTRODUCTION
The system of recoding, analysing and using financial data and non-financial information
is known as management accounting. In the modern business era, companies are facing different
kinds of problems relating to managing their resources (Ahmad and Mohamed Zabri, 2012).
Managerial accounting focuses on expertise and assists an organisation in increasing their profit
by lower down the overall cost of operations and other activities. It also helps managers in
expanding enterprises by finding new ways of enhancing sales. There is a big difference between
management and financial accounting where first one is for growth of business while other is for
external stakeholders. Taj stores is situated in London. They are running a grocery shop which
started in the year 1936. Their employee’s strength is less than 50 and turnover is below 500000
pounds. This project will give complete explanation about different management accounting
systems. Some reporting methods will also become an important part of this assignment. Major
difference between marginal and absorption costing will get covered in the mid part of this
report. There are various planning tools which manager can use for controlling the budget and all
will be explained in this file (Aminbakhsh, Gunduz and Sonmez, 2013). At the end, this project
will talk about financial problems and their solution by management accounting tools and
techniques.
TASK 1
P1. Management accounting system and essential requirements of its different types
Making profit in this business world is not a difficult task if an organisation knows all
correct manner of managing all available resources. There was an era when companies try to
focus only on their financial activities because they think that if they will manage monetary fund
properly then they can find out solution of most of their troubles. But, with time, new business
issues have raised because of various reasons like globalisation and swift changes in rules made
by government, high competition, etc. Management accounting has many perks that assist in
forecasting and playing a crucial role at the time of making decisions relating to buying or sale of
investments. Cash is an important asset of company and tools of managerial accounts predict
need of this liquid asset at a particular time period. Financial accounting is mainly used for
showing stakeholders that firm has successfully achieved mentioned goals and if they fail to
reach these targets (Chen, Weikart and Williams, 2014). There are many differences between
managerial and financial accounts that are shown as below:
1