Management Accounting - Airdri

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Added on 2020-10-05

Management Accounting - Airdri

Added on 2020-10-05

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Management Accounting

Table of ContentsINTRODUCTION...........................................................................................................................1TASK1.............................................................................................................................................1P1. Importance of different kind of management accounting system....................................1P2 Different type of management accounting reports............................................................3M1 Benefit of various kind of system. ..................................................................................4D1: Importance of Several reporting approaches and integration of accounting system.......5TASK 2............................................................................................................................................5P3: Method utilized by company to analyse cost...................................................................5M2: Different form of Accounting techniques and tools.......................................................8D2 Formulation of business statements from collected data..................................................8TASK3.............................................................................................................................................8P4 Assorted planning tool help in controlling budget. ..........................................................8M3 Analysis of various planning tool and its application for forecasting...........................10TASK 4..........................................................................................................................................11P5: Financial issue and resolution of these problem and comparison with other company.11M4 Analysis of planning tool to deal with financial issue...................................................12CONCLUSION..............................................................................................................................12REFERENCES .............................................................................................................................13

INTRODUCTIONIn recent time, company uses different concept and procedure of management accountingin order to determine, examine, figure out and record useful financial information. This collecteddata is presented to internal management so that they can make effective decision to improve theperformance and productivity of company(Amidu, Effah and Abor, 2011). This system help tomeasure financial issue and operation performance and help management to improveperformance. Airdri hand dryer manufacturer uses techniques and system of managementaccounting that help them to manage their operation and business in impressive manner.In this project, various accounting system and reporting method is discussed that is usefulfor Airdri. Company makes budgets and use different planning tool those are helpful in controlof their resources. Issue of financial problem is solved by using management accounting systemis also covered in this report.TASK1P1. Importance of different kind of management accounting system.Management Accounting is considers as a process of making management report andaccounts that help them manager to have accurate and timely financial information to make longand short term decision. Management accounting is the preparation of monthly or weekly data,report for internal managers and other officer that is important for measure and improveperformance of employee. These report are generally summary of available cash balance, salesincome, account payable and receivable, stock in hand etc (.Carlsson-Wall, Kraus and Lind,2015). Management of Airdri collect important data that help them to organise and manage theiravailable resources effectively. So, management accounting is that important tool for Airdriwhich help their top manager in better planning and controlling of resources this will help toincrease profit. Manager of company uses different accounting method, system and tool whichease the work of management activity. It is important in many ways some of these are discussedbelow:Help in decision making- Having accurate information help manager to make valueddecision that have positive result to the organisation.Identify future goals- Assorting of data by manger help in examine and identify goal andaid in making proper action plan to achieve these future plan.1

Easy in plan formation- Planning is important for every organisation as it help in properuse of resources. Manager of Airdri have proper plan to use their resources and attain allpredefined goals.Management accounting is a managerial activity that includes internal system that Airdri uses toevaluate and compare its processes for their manager. These system are cost accounting, stockmanagement, price optimisation and job costing that is discussed underneath:Cost accounting system: Manager uses this system in recording, categorising, estimatingthe cost of every operation, products for analysis of company profits.. This costingsystem is further classified on the basis of its uses those help management such asnormal, actual and standard costing (Granlund 2011.Johnson, H.T., 2013). Airdri is amanufacturer of hand dryer so their manager through this system tracks the flow of fundsand also record and compare cost involved in the production of product. Inventory management system: This system is associated with effective analyse andmeasurement of all non capitalised inventory used within an organisation. Themanagement uses two main type of inventory management system like periodic systemthat is recording of stock on monthly or weekly basic and perpetual system. Airdri alsofollow various method of these system such as FIFO, LIFO and ABC analyses whichhelp in effective management of available resources. Manager of Airdri uses this systemin creating effective work order, maintain bills of products and all manufacturer relatedinvoices.Price optimisation system: This system is connected with evaluation and calculating theprices of product that are likely to give best income or outcome and increase profitabilityof business. This not only the process of fixing price but also to hit or achieve revenueand margin targets through total sales of product.In Airdri Manger uses this system tofind and fix best price of their hand dryer that will not effect the customer demand andcompany is going to maximise their profit by satisfying customer.Job costing system: This system includes the recording and accounting of cost that areincur to a particular job as well as cost of employee involved in business operation. Thissystem have types of costing method also such as batch costing product and processcosting. Manager of Airdri with this system account different cost involved in production2

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