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Management Accounting - Airdri Ltd Assignment

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Added on  2021-02-19

Management Accounting - Airdri Ltd Assignment

   Added on 2021-02-19

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Management Accounting - Airdri Ltd Assignment_1
ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Various management accounting systems along with its requirements within anorganisation..................................................................................................................................1P2: Various management reporting system along with its benefits to an organisation...............2M1. Evaluation of benefits of various management accounting systems....................................4D1 Management accounting system and management accounting reporting are integrated withorganisation process.....................................................................................................................4TASK 2............................................................................................................................................5P3: Different costing methods and its use to calculate net profitability......................................5M2: Management accounting techniques and financial reporting documents............................9D2. Financial reports which applies to interpret many business activities..................................9TASK 3............................................................................................................................................9P4: Budgetary control tools along with its benefits and drawbacks to an organisation..............9M3. Usage of different planning tools for preparing and forecasting budgets..........................12TASK 4..........................................................................................................................................12P5: Comparison of how organisation adopt management accounting system so as to respond tofinancial problems.....................................................................................................................12M4 Analysis of how in responding to financial problems management accounting can leadorganisations to sustainable success..........................................................................................14D3 Various planning tools to resolve financial problems.........................................................14CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15
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INTRODUCTIONManagement accounting refers to the provision of financial information which assistmanagement to make corrective decision for the development and growth of business. Accordingto ICMA, Management accounting is an application of professional knowledge and skills inmaintaining financial accounts in such an understandable manner which makes easy for themanagement to frame an effective policies and control of operations of an organisation. Thepresent assignment report is based on Airdri Ltd. which deals in designing and manufacturingwarm air hand dryers consuming less energy and having unique features which is engaged inmanufacturing sector located in United Market. The report mentions the management accountingand reporting systems along with their types and application within an organisation. In additionwith this, two costing methods which includes marginal and absorption are properly explainunder this report with a proper calculation of net profitability. Apart from this, planning tools tocontrol budget and use of management system to resolve financial issues are also discussedunder this report.TASK 1P1: Various management accounting systems along with its requirements within an organisationManagement accounting system :It refers to the formulating and supply financial information to the organisational managerson proper time so this helps in their regular as well as short term decision making. It is aprocedure that recognize, summarise , record and present all the financial data or written recordin the books of accounts like balance sheet, profit and loss account, cash flow statements etc.Airdri Ltd. company use many accounting systems to keep their financial records that arenecessary in decision making process that helps in achieving their organisational goals(Arnaboldi, Lapsley and Steccolini, 2015) The systems that are used by Airdri Ltd. company aregiven as follows :- Cost accounting system :- It is system that is used by Airdri Ltd. company to calculatethe entire expenditure which is incurred in supply large varieties of goods and services afterapportion cost to all monetary service individually. It is very appropriate to followed by thecompany which is distributed its goods and services in various available range. Airdri Ltd. isused this system to find out the actual cost occurred at the time of production to find out the1
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profitability in the future of each and every product that is delivered to the customers (Bryer,2013). Price optimisation system :- This system is used by Airdri Ltd. company to find out thevariation in the perception of the customers at different price level of product and services that isoffered by different channels. This system is used by the company to find the profit margin incontext to change in price so it helps them in setting their price of the product by makingparticular profit in future period of time. In this managers of Airdri Ltd. appoint researcher toconduct the particular research regarding the satisfaction level of the customers towards theexisting price of the product or if it will get change in future period of time. Job costing system :- It refers to the system that helps Airdri Ltd. company incalculating the total manufacturing cost of the each commodity that is incurred in providingvarieties of goods and services after apportion cost to all fiscal service individually. It is veryappropriate to adopt by the enterprise which is deliver its goods and services in variety of price.Airdri Ltd. company uses such system to estimate the cost of each commodity so this helps theenterprise to find out future profit that is generated by each and every commodity (Cheng, 2012).Inventory management system :- This is a system which is used to track the level ofstock available in the industry that includes availability of raw material, organisational assets,etc. It also helps an enterprise to fulfil their customer needs and demand on time to build brandfaithfulness and trust towards the enterprise. Airdri Ltd. company uses this system to know theavailability of the stock so that it prevents from the overstock in which company has excessivestock and under stock in the industry. Inventory management system also maintain the wholedata regarding availability of stock in the Airdri Ltd. company. P2: Various management reporting system along with its benefits to an organisationThere are various management reporting system which can be adopted by AIRDRI LTD.company in order to continue its operations more smoothly. Here are some types of reportingsystems with brief description:PERFORMANCE REPORT:It is a report or a detailed statement that measures routine activity in terms of successover a specified time frame. The report should provide all the needed information to readers.They are routinely prepare by AIRDRI LTD. and it contains performance indicators which will2
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