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Management Accounting and Budget Analysis

   

Added on  2020-06-06

15 Pages3490 Words67 Views
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Management Accounting
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Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................4P 1 Explaining management accounting.....................................................................................4P 2 Different methods utilised for management accounting reporting.......................................5TASK 2............................................................................................................................................7P3 Calculating costs per unit under both absorption costing and marginal costing ...................7P 4 Advantages as well as disadvantages of different planning tool utilise for budgetarycontrol.........................................................................................................................................9TASK 4..........................................................................................................................................11P 5 Comparing financial performance of RYANAIR with one of the twoEasy Jet................11Comparison of Financial performance of RYANAIR enterprise with ........................................12Financial information on south west Airline.................................................................................14CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................16
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INTRODUCTIONManagement accounting is refers to as system of planning , recording, controlling thefinancial resources in an organisation. Objective of this accounting system is to help businessentity in controlling the cash flows. It allows manager to record all financial transaction whichcan be used for estimating the costs or expenses which are to be incurred when executingspecific activity. Managerial accounting is also defined as procedures of making essential dataavailable to company managers who directly responsible for a firm's operations. This accountingsystem assist manager in making suitable decisions related to an organisation. Managerial ormanagement accounting includes the integration of both financial and non-Monetarystatements .It intends to provide useful information to the management so that the managementcan take effective decision for the business. This accounting system plays significant role indelivering information about the financial position of the company to both internal and externalstakeholders.The present report have focus on developing the understanding about the concepts as wellas importance of management accounting in an organisation. It has focus on identifyingdifferent methods used for management accounting reporting.
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TASK 1P 1 Explaining management accountingManagement account is defined as process of recognising, evaluating, analysing,interpreting as well as communicating the financial target of company. This accounting systemalso includes recording of financial transactions in systematic format. The financial transactionare recorded with the purpose of identifying the amount of income earned and expenses made byan organisation during particular financial year. Management accounting is considered to be asan effective system which helps manager in making suitable decision-making accounting recordsboth financial and non monetary transactions which provides management an ease in makingsuitable judgement. It supports manager in formulation of appropriate strategies, plans andpolicies for an enterprise. Purpose of management accounting is to help stakeholders analysingthe financial performance of company in the market. This accounting decision supportsinvestors in making decision related to the further investment in the future. The main aim ofmanagement accounting system is to assist business entity in improving financial performance.Management accounts also supports manager in ensuring effective as well as efficient utilisationof funds. Budgeting procedure is followed by manager in RYANAIR for managing liquidity offunds. This technique have assisted an organisation in controlling the cost and managing the cashtransactions. Management accounting system also helps manager in making appropriate financialplan for business.There are several types of management system which can be used by RYANAIR formanaging funds. These accounting system has varieties of uses-Cost accounting system- It is considered to be as the most effective as well as usefulmanagement accounting system In terms of determination of cost of goods. Cost accountingsystem helps manager in setting the price for product or services. By utilising this accountingsystem manager in an enterprise estimates cost which incurred in producing specific products ,then on the basis of total expenses profit margin is decided.Cost accounting system is beneficial as well as useful in companies which has severalfunctional units. This accounting system can be implemented by RYANAIR company as thiswill assist help manager in estimating or evaluating the cost which has been incurred by firm onproducing specific goods. It is very much essential for manager in RYANAIR enterprise toensure defectiveness of accounting system.
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