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Management Accounting And Its Applications

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Added on  2020-10-22

Management Accounting And Its Applications

   Added on 2020-10-22

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Management Accounting AndIts Applications
Management Accounting And Its Applications_1
Table of ContentsINTRODUCTION...........................................................................................................................1Task LO1.........................................................................................................................................1Explaining the meaning of management accounting and essential requirements of its system..1Explaining various methods that are used for the management accounting reporting................2Evaluating the benefits and application of the management accounting systems in theorganization. ...............................................................................................................................2Critically evaluating the integration of the management accounting system and its reportingwithin the enterprise....................................................................................................................4CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
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INTRODUCTIONManagement accounting is the process that identifies, measures, analyze, accumulate thecommunication and the preparation of the financial information. It is used by the management toevaluate, control and plan the resources in the enterprise. The present study is based on ABC Ltdcompany, a medium sized firm which deals in manufacturing business. Furthermore, the reportexplains essential requirement of the systems and reporting of the management accounting. Task LO1.Explaining the meaning of management accounting and essential requirements of its system.Management accounting is the process of analyzing and preparing the management reports andthe accounts that facilitate accurate financial information relating to the operations and the costof the business. It enables the managers in making the decisions and in managing the operationsof the ABC Ltd. Effectively and efficiently (Maas, Schaltegger and Crutzen, 2016). There areseveral systems of management accounting which plays a crucial role in assessing the cost, priceand inventory of the organization. Cost accounting system- It is the system that is used by ABC Ltd. For estimating theproduct cost for analyzing the profitability, cost control and the valuation of the inventory. It iscritical for the managers of the firm to evaluate the cost for making the operations profitable. Inventory management system- Under this system the supervision of the stock items andthe non -capitalized asset is made by the managers of the firm. It is crucial as it helps theenterprise in managing the flowing of the goods from the manufacturers to the warehouses andby these facilities to the point of scale. Job costing system- It is the process of ascertaining the information regarding the costsattached with the particular production or the service job (Quattrone, 2016). This system isessentially required for submitting the information of the cost to the customers under the contractwhere reimbursement of the cost takes place. Price optimization system- It is the system where the mathematical analysis is made bythe ABC Ltd. in order to determine the response of the customers at different price levels for itsservices and the products through various channels. 1
Management Accounting And Its Applications_3

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