Assignment on the Management Accounting(MA)
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Added on 2020-06-06
Assignment on the Management Accounting(MA)
Added on 2020-06-06
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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 ...........................................................................................................................................1P2 ...........................................................................................................................................3TASK 2............................................................................................................................................5P3 ...........................................................................................................................................5TASK 3............................................................................................................................................7P4 ...........................................................................................................................................7TASK 4..........................................................................................................................................10P5..........................................................................................................................................10CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONManagement accounting plays a vital role in business that it helps to manage and controlvarious operational activities and resources costs in order to increase profitability and productionwhich also help to respond financial issues. The report will cover management accounting withdifferent types of accounting systems and its importance towards decision-making. The reportwill also demonstrate a well understanding of method used for management accounting reportingand Income statement using marginal and absorption costing methods for Guildford. Planningtools for budgetary control and management accounting techniques used to respond finance-issues within firm will be discussed in this report.TASK 1P1 Management accounting: It can be said that in Guildford tyre business management accountingis important for managers in order to manage and control operational activities. Managementaccounting systems are used by managers to determine the cost of different resources within firmin order to prepare financial reports that helps to control the cost effectively. Such reports can befinancial or non-financial, internal or external efficiently (Abdullah and Said, 2015). This willalso help to make strategies and plans that helps to manage operational activities in order tomaximise profitability and production. Management accounting is also known as managerial orcost accounting.Accounting system: Management accounting system helps managers by providing usefulinformation and data that helps to facilitate various business resources within firm effectively.Information regarding business operational activities will help to meet requirements anddemands of business in order to make decision-making process more effective and efficient.Management accounting system involves costs of production, operational activities and data andservice.Cost accounting system: Cost accounting system is used by managers to evaluate the cost ofvarious resources within business such as cost of products and services offered by firm in themarket towards customers and cost of departmental activities etc. this will provide some usefulinformation to managers that helps to manage and control cost of business resources (Botes andSharma, 2017). This will also help managers to make effective decision making in order tocontrol the cost of business operational activities. For an example, the cost system will be1
applied on retailers, manufactures, government departments and proprietorships effectively. Itwill help to evaluate price of product and service.Inventory management system: Inventory in business refers to business resources such asGuildford tyre products, raw materials, finished goods and work in progress. The system helpsmanagers to control and manage inventories at various inventory levels effectively. This will alsoprovide information to evaluate availability of stock, how much quantity should organisationorder and haw can the quality of products can be managed that will help to drive businessperformances in various departments effectively (Budding, Grossi and Tagesson, 2014). Cost ofinventory refers to cost of raw materials, facilities, insurance, utilities and tax as well as capital.For an example, The business is able to evaluate cost of transportation, stock and raw materialsagainst shortage in order to manage work in progress. This will also help by providinginformation regarding shortage of stock and planning for managing business resources andactivities.Job costing system: Job costing system is a procedure of accumulation and cost recording. Itwill help managers in Guildford to determine group of people n which the cost of various humanresources can be managed and controlled effectively. For an example, job costing system isuseful for only those organisations where the production of products and services is 'One off'. Itis also undertake by managers for a special or specific requirement or customer. A short periodof time is consumed by firm to complete the order provided by customer in the marketeffectively. This will also help to control and manage decisions regarding employeesperformance that will help to increase production and profitability. Price optimising system: It is system in which the price of products and services offered by firmin the market towards customers is changed according to their demands and requirementseffectively. This will help to enhance profitability and production by knowing sensitivecustomers in the market to change the prices accordingly. Price optimising system is normallybased on customer feedbacks and suggestions to make necessary changes efficiently. This willhelp managers to achieve customer satisfaction and sensitivity that helps to increase profitabilityand production. This will help to retain customer satisfaction and loyalty towards brand whichhelps to enhance productivity and profitability. In addition to this, managers are also able to takedecisions that helps to improve and develop price optimising system effectively. 2
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