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Management Accounting Analysis

   

Added on  2020-10-05

18 Pages4697 Words455 Views
Management Accounting

CONTENTSContents...........................................................................................................................................2INTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1(a): Definition of management and their essential requirement.............................................1(i): Comparison.......................................................................................................................2(ii) Importance of management accounting information........................................................2(iii): Cost accounting system..................................................................................................2(iv): Inventory management system.......................................................................................3(V): Job costing system..........................................................................................................3(b): (i); Various method of accounting reporting...................................................................4(ii): Importance of using reporting methods...........................................................................5M1: Benefits of using management accounting system.........................................................5D1: Critical analysis of various reporting system..................................................................5TASK 2............................................................................................................................................6(A): Different types of costing methods.................................................................................6M2: Analysing accounting techniques.................................................................................11D2: Data interpretation of calculated outcomes from income statements............................11TASK 3..........................................................................................................................................11(i): Types of budget..............................................................................................................11M3: Analysis of planning tools............................................................................................13D3: Critical analysis of financial issues...............................................................................13TASK 4..........................................................................................................................................14(i): Balance scorecard approach...........................................................................................14M4: Analysing financial issues............................................................................................14CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................16

INTRODUCTIONIn present scenario management is always planning to make use of appropriateaccounting techniques which will lead to increase better outcomes in coming period of time. Itseems to be one of the crucial role of managers to make use of reliable resources that aresufficient enough to attain maximum profit for the company (Hiltonand Platt, 2013) .Accordingto the mentioned case of Tech UK it has been analyse the company is planning to analyse theirfinancial statements because they are not able to earn valuable amount of revenues in last fewyears. For this purpose they have appointed a new accountant for auditing of their financialstatements. This project an aim is to evaluated accounting and reporting methods in effectivemanner so that every transaction can be recorded effectively. Apart from this, different types ofcosting methods are being used to calculate net profit for the company. However, use of varioustypes of budgets can lead to manage their future costs and expense. Evaluation of variousmanagement accounting techniques those are use for the purpose of resolving financial issuesthose are arises in an organisation.TASK 1(a): Definition of management and their essential requirementIn accordance with increase overall goodwill of Tech (UK) Limited in front of othercompanies they need to grab new opportunities by using appropriate accounting systems. Thiswill be consider more effective in recording all financial and non-financial transactions those aredone within an accounting period of time. The manager always looks to make use of reliablesystems which will be essential enough to increase overall productivity and growth for thecompany (Parker, 2012). Management accounting is known as one of the essential process ofcollecting, recording, summarising and evaluating all data in more vital manner in the set period.Managers are uses the provision of all information in respect to make better inform themselvesbefore they decide all essential matters within their organisation. These effective provisionsassist financial data and make advice to every company for using in the organisation andevaluation data that are made by company in last year. The process of formulating managementaccounting report and account that used to provide reliable and accurate financial and statisticalresults for the company. One more effective point is taken into account that financial andmanagement accounting is having some kind of differences those are mentioned below:1

(i): ComparisonManagement accounting Financial accountingIt used to provide data to people within everyorganisation to make further decision for futureplanning.This accounting is basically is mainly for thoseexternal parties those are associated with thebusiness. Such as investors.Management accounting cannot need any kindof rules and regulation because they alwaysformulate them.While financial accounting is entirely based onrules and policies those are used for thepurpose of recording financial transactions.It can be related with specific product and costrelated aspects those are based on theincreasing profitability for the company.It used to contain entire organisationperformances on the basis of their financialstatements.(ii) Importance of management accounting informationThere are various crucial benefits of using management accounting information that arecollected within an accounting of time from the managers. They uses this to be presented in frontof various stakeholders that are vital parties for making future decision making in their valuableprojects ( Renzand Herman2016 ). Some of them are Increase profitability: The primary motive of using accounting information to enhancemaximum profit by selling more products that are produced by Tech UK during theperiod of time.Forecast for future: Another important aspect of using management accountinginformation is to take crucial decisions that are entirely based on future productivity ofthe company. Every investment that is made by the company is considered more reliablein coming period of time.(iii): Cost accounting systemIt is known as one of the effective design which is being used by the company to determinetheir overall costs that are done within an accounting period of time. These are cost are used toanalyse products ability and inventory valuation and controlling measure that are effectingoperational effectiveness up to an extent (Soinand Collier, 2013). It is related with various typesof cost those are incurred during production of various product and services for the company.Some of them are mentioned below: Actual costing: These are said to be that cost which are actually incurred by Tech UKwhile production process. It is mostly related with direct material and direct overhead.2

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