Management Accounting: Meaning, Methods, and Planning Tools

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Meaning of Management accounting.....................................................................................3
P2 Different methods used for managing accounting reporting.................................................5
LO 2.................................................................................................................................................6
P3 Cost calculations using costing techniques. ..........................................................................6
M2 Use of MA approaches and development of financial reporting documents.......................8
D2 Producing financial reports accurately applying and interpreting data. ...............................8
LO 3.................................................................................................................................................8
P4 Advantages and disadvantage of planning tools used in budgetary control..........................8
M3 Use of different planning tools and application for preparing budgets & forecasts...........10
LO4................................................................................................................................................11
P5 Comparing the organisations using the management accounting systems..........................11
M4 MA systems for business success ......................................................................................12
D3 Planning tools to handle the financial problems. ...............................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting refers to setting and preparing the financial report so
that accurate information is to be provided to company regarding taking risk in growing
business perspective. Usually this report is prepared by the manger regarding
examining day to day activities which is undertaking in business to make planning for
longer term growth (Malina, 2018). Present report is based upon the CORUS UK Ltd.
Which is acquired by Tata Group in April 2007. CORUS company mainly deal in steel
related products. This report will include the matter relating to understanding the
concept of management accounting and also its techniques which they are dealing in. It
also includes the factors relating to planning tool used in managing the accounting. At
last the report cover the matter relating to examining the ways which is used in resolving
the financial problems.
LO 1
P1 Meaning of Management accounting
Management accounting is the internal process which the managers adapted to
examine the day to day operation to make the financial report (Hiebl, 2018). It helps
company to deal in accurate planning and also initiate with business strategies to
overcome from the risk which is associated in future perspective. It carries various types
of management accounting as:
 Inventory management systems: In this management is to be undertaken
regarding managing the inventories regarding inflow and outflow of goods or also
the stock which is kept in warehousing (Hopper and Bui, 2016). In respect of
CORUS, this is one of the necessary systems which is to be implemented by the
managers regarding examining the raw material or the quantity of the goods
which is needed to manage the raw materials in better way.
1. In context of LIFO, the raw material which is lastly buyer are supplied first as they
are fresh and carry the importance in respect of getting better quality.
2. In relation to FIFO, the inventories which is firstly carries is to be delivered firstly
so that it helps in examining the status of inventories in market.

3. AVCO refers to the determining the cost of goods which is used in respect of
dividing the number of goods used during the particular time period.
 Cost accounting systems: Management is to be required managing the cost in
respect of estimating the actual cost incurred with the actual cost spend (Cost
Accounting Systems, 2019). In relation to CORUS, this is beneficial regarding
managing the cost through estimating the profits gained regarding pertaining for
particular operational activities.
 Job costing systems: In this system, management of accounting is initiated
regarding estimating the actual expenses incurred from the job (Scapens, 2018).
As in this the labour cost, materials cost, equipment used to produce the finished
goods and the salaries or also necessities which is to be provided to employees
is to be managed or recorded in the accounting. In case of CORUS, this is useful
regarding managing the needs of the employees through providing accurate
services and also management is undertaken regarding estimating cost.
 Price Optimistaion: Pricing reflects the changes in prices of the particular
products which the company identified regarding fluctuation in changes in prices
of the products or services. Thus, managers of CORUS had to initiate this
procedure regarding managing the pricing system in better way, so that it helps
companies to take right decisions.
M 1: Benefits of management accounting systems:
It is necessary the management accounting is to be needed in business so that
they can examine the overall performance of the company through making the accurate
budgets or also manage the inventories in right manner (Hyndman, 2016). Thus, it
carries various benefits in CORUS regarding managing the accounting as:
 Job costing systems: It helps in increasing the efficiency in business, as through
getting accurate information about the resource which is utilized by the
employees regarding attaining the particular activity. Through these aspects, it
helps company to take right decision.
 Cost accounting systems: It helps in examining the actual cost incurred in the
company regarding disclosing the profitable activities and unprofitable activities
which is attaining in business (Hasyim and Jabid, 2019).