Management Accounting Applications - Report

Added on - 21 Jul 2020

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Management AccountingApplications
Table of ContentsINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1(P1) Management accounting and essential requirement of various management accountingsystems...................................................................................................................................1(P2) Various methods available in respect of management accounting reporting.................3(M1) Merits of management accounting systems..................................................................4(D1) Integration between management accounting systems and reporting............................5(P3) Cost calculation and income statement preparation by using marginal and absorptioncosting.....................................................................................................................................5(M2) Application of different management accounting techniques for financial reporting..7(D2) Interpretation of data that is produced by the reports....................................................8(P4) Merits and demerits of various planning tools that are used for budgetary control.......9(M3) use and application of different planning tools for preparation of budgets................12(P5) Manner in which accounting systems will be used for solving financial problems.....13(M4) Use of management accounting in the sustainable growth of the company...............15(D3) Solving of financial problems by using various planning tools...................................15CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
INTRODUCTIONManagement accounting is the process in which various activities are undertakenwhich includes measurement, identification and analysation (Ajibolade, Arowomole andOjikutu, 2010). All this is done so that decisions can be made in better manner by whichit will be possible for any organisation to achieve its goals and objectives as by this onlythe overall profitability of it will be improved. With the help of it performance will beevaluated on the basis of the plans that will be formulated by using the informationwhich is collected while carrying out various processes. All the data will be required tobe recorded and for that proper reports will be made which will be used by the ownerand managers for various purposes. There are various aspects that should beunderstood in respect of management accounting such as various systems andreporting methods, tools used in budgetary control, costing methods that can be used inpreparation of income statement and manner in which financial problems can be solvedwith the help of it. All these will be discussed in the below mentioned report which isprepared in relation to BKL for using it in trade show by the firm.TASK(P1) Management accounting and essential requirement of various managementaccounting systems.In every business, there are certain goals and objectives that are set by themanagement that are required to achieved by it in order to make the business asuccess (Albelda, 2011). For this purpose various processes are required to beundertaken which will involve identification, measurement, evaluation, interpretation andcommunication. All these processes will together be covered in managementaccounting. By this various information will be collected that will be used for the purposeof making reports and those will be used by the managers in taking the decisions. Asthe decisions that will be made will be correct due to the appropriate data, it will result inthe overall growth of the BKL. Risk management, performance management andstrategic management are some of the main areas in which management accounting isused.Essential requirement of various systems:1
All the systems which are available with the company shall be utilised as they arevery important. It is because the data will be collected with the help of them and by thatvarious decisions can be taken. Managers require different tyoe of information and thatcan only be gained by use of the systems.Some of the main systems that are present in this respect are described here under :1.cost accounting systems :perpetual inventory system is the system that isused for the purpose of recording of various data and that is considered in thissystem. In the whole process there are five parts that are required to beachieved (Arroyo, 2012). The first part will cover the input measurement aspectin which decision will taken regarding the amount of input that will be used by thefirm. Than various methods that are available for the valuation of inventory willbe used to calculate the value such as marginal and absorption costing. After thevalue has been ascertained it will be needed that total cost that has beenincurred in the process is determined which will be done with the help of costaccumulation methods that are present. Then cash flow assumption will becarried out and at last internal capabilities will be recorded which will be donewith the help of the various methods available that includes periodic method andperpetual method. The resources that are available will be allocated on the basisof the information and by this the profits of various departments will becalculated.2.Job costing system :this is the system in which the cost that has beenincurred in relation to various jobs will be taken into consideration (Bodie, 2013).As in any process there are various activities that will be undertaken and theycannot be allocated on individual basis, so in order to calculate the per unit costthis system will be undertaken by the company. In this all the cost of various jobswill be accumulated and than that will be divided by the total number of units thatwill be made and by this the unit cost will be determined. The cost will becompared with the estimates that have been set and by this variations will befound which will help the managers in determining the processes that areinefficient and those will be eliminated so that the targets that have been set can2
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