Management Accounting - Apis Limited
Added on 2020-01-07
17 Pages5565 Words121 Views
MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................3TASK1.............................................................................................................................................3P1 Explain management accounting and their different types of management accountingsystems........................................................................................................................................3P2 Explain different methods used for management accounting reporting ...............................5P3 Prepare an income statement using marginal and absorption costs.......................................7TASK 3..........................................................................................................................................11P4 Advantages and disadvantages of budgetary control planning tools...................................11P5 Comparison between how organisation could use management accounting so as to respondto problems related to finance...................................................................................................14CONCLUSION..............................................................................................................................16REFERENCES .............................................................................................................................17
INTRODUCTIONManagement accounting is a process that is used by the management in order to identifyand present the financial information in an efficient manner. On the basis of this data, managercan make their plans and can take decisions so that they can achieve profits. This is more usefulfor the internal manager and executives as through this they can control their expenses. The topmanagement can use this information in order to forecast the data on the basis of the pastinformation (Brosel, Toll and Zimmermann, 2012). Through this, they will be able to improvetheir growth and brand position in the market. The present report is based on Apis Limited whichperform their operations in hospitality industry. They are focusing on their business activities sothat their overall performance can be improved in an efficient manner. In this context, reportexplains the different types of management accounting system and methods that are used in orderto manage the overall accounting system. Along with this, it explains the cost techniques that areused to prepare to income statement. The advantages and disadvantages of the different planningcontrol techniques and budgetary control are explained in detail. TASK1P1 Explain management accounting and their different types of management accounting systemsManagement accounting refers to preparing or managing accounts, that provides straightand timely financial content to the managers. It is helpful for them to take short term and day today decisions. Although management accounting, also provides annual reports to the externalstakeholders. Apis Ltd. also prefer to use to managerial accounts and financial reports. Thesereports are related with sales revenue, available cash in organisation, accounts receivable,accounts payable, outstanding debts, raw material; amounts of others in hand and inventory. Itengaged with the planning of information that is helpful to the managers in planning andcontrolling their business operation's. It is also accommodating for those only peoples who areinvolved in decision making process (Briciu, Groza and Ganfalean, 2009). Apis Ltd. Industrymostly uses management accounting system to meet requirements of managers regarding withfinancial reports and data. It is an internal function of any business and which is responsible forreporting and collecting any financial information. It is a activity of presentation, analyse and interpretation of financial information in orderto assist the process of management as daily operations, policy creation and decision making.
The objective of management accounting is allocation of resource and analyse the risk in order toexploit the risk. It is also helpful in measuring performance of employees and measurement ofefficiency of employees. Management accounts also lean in providing content about executionthat is more often than financial accounts (Michalski, 2012). So management accounting isbased on cost and financial accounting. Management accounting is system of financialstatements through ration analysis. The main of management accounting is financial planning ofeach and every activity that is related with economic resources of the business. There aredifferent types of management accounting; - Cost accounting system: A cost accounting system is tool which is used to assess the costof the product in order to make the profits in a most optimum manner. However, there isno such tool which can be used to ascertain the appropriate cost, but by applying the costaccounting system, company could attain the idea to reduce the cost of a product. Now,there is a strong need to know about the product cost in order to make the productprofitable.Job costing system: Under this costing technique, there is need to know themanufacturing costs individually for each job. This technique is useful for the firmswhich are engaged in the manufacturing process. Batch costing system: this is the technique which is used like job costing technique. It isa kind of specific order costing technique. Under Each batch, there are so many units arecovered. So, there is need to assess the total cost of the batch. Inventory management system: This system is used to know the inventory levels, ordersand deliveries. This is the system which is used to assess the stock and manageaccordingly.Price optimisation system: This is the system which is used to identify about theconsumer’s reaction at different at the various prices of the products or services. P2 Explain different methods used for management accounting reporting:These methods are regulating by Apis ltd. In management accounting process. They aresuch as follow: -
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