logo

Management Accounting Assignment | TATA Motors

   

Added on  2020-06-04

16 Pages4725 Words1002 Views
Management Accounting

TABLE OF CONTENTSINTRODUCTION......................................................................................................................3P1 Management accounting and essential requirements of management accounting...........3P2 Discussing three management accounting reporting method that can be used by Tatamotors.....................................................................................................................................6TASK 2......................................................................................................................................7P3 Producing income statement as per marginal and absorption costing system..................7TASK 3......................................................................................................................................7P4 Discussing tools which are used by Tata Motors for budgetary and financial control.....7P5 Comparing two business units in relation to the manner in which they have usedmanagement accounting systems for responding financial problems..................................11CONCLUSION........................................................................................................................12REFERENCES.........................................................................................................................13

INTRODUCTIONManagement accounting plays crucial role in the business to resolve complexproblems by taking effective decisions. Present report deals with importance of managementaccounting to Tata Motors which is engaged in automotive industry and satisfying customers.Various systems and reports of management accounting are discussed in the report.Furthermore, marginal and absorption costing techniques are also assessed. Moreover,functions of management accounting and requirements in the organisation are also listed.Various planning tools are provided with advantages and disadvantages and also howmanagement accounting can be used to respond to financial problems are discussed in thisreport. Thus, management accounting has immense importance in the corporate world toassess performance, improvise over the same, and take enhanced decisions. P1 Management accounting and essential requirements of management accountingManagement accounting is quite useful as it provides valuable advice to managementin taking effective decisions for the betterment of the company. This type of accountingdraws results from the financial accounting and provides clarity to management to makeenhanced decisions. Tata Motors, which is an automobile giant,also takes into account thisinformation so that it may be able to make improvement in the operational tasks with muchease. This means that management accounting information assists managerial personnel’s intaking enhanced decisions (Cooper, Ezzamel and Qu, 2017). Internal operations can beimproved with the help of this information and as such, company is able to perform well andas such, management accounting information is quite useful for Tata Motors to improve itsperformance in effectual way.Moreover, costs are controlled in Tata Motors so that revenue may be maximised byreducing the expenses and as such, cost accounting is major type of management accounting.If expenditures exceed revenue, firm incurs losses and to overcome the same, cost relatedreports are prepared which help company to cut down expenses in the best possible manner.Thus, internal operations can be controlled and strengthened in effectual way. In relation tothis, functions of management accounting can be enumerated as follows-1. Planning-

Planning is essential for the business and as such, budget is prepared. Managementaccounting help to take decision and budget can be prepared as whole process of budgeting isbased on the accounting reports. For instance, if Tata Motors assess target profit for comingperiod and should also assess what are the plans for successful achieving objectives. 2. Organising –This is another useful function to organise framework within which employees willcarry out tasks in a better way. This means that allocation of responsibilities and duties areimparted to each and every employees si that objectives can be easily met by the company.Thus, divisions of the organisation carry out their functions quite easily as they all becomeinterlinked with one another (Sharma. 2018).3. Controlling-This is another major function of management accounting as control and performancereports are provided to the management. The reports are then matched with budgeted resultsso that actual output may be assessed. If deviations are found, then corrective actions aretaken to remove the same and improvement is done. Thus, variances are eradicated andimprovement can be made for achieving desired goals. 4. Decision-making –Decision-making is the essence of management accounting as by using thisinformation, top managerial personnel’s are able to take enhanced decision for the bettermentof the company. Without performing above three functions, manager cannot plan and chosefor the best alternatives, which would help company to prosper with much ease.Difference between management accounting and financial accounting is described below-Management accounting Financial accounting1. Information is provided to managerialpersonnel’s for taking effective decisions(Jermias, 2017).1. Information is imparted to users who havestake in the business.2. Management accounting has its focus onmaking company internally strong andachieve goals.2. While, financial statements are provided tostakeholders to analyse and take decisions.3. Management accounting is not mandatoryto be accomplished by the firm.3. Financial 4accounting is mandatory so thatfinancial statements may be provided to usersof accounting information.4. Detailed information regarding costs and4. Overview of various aspects are listed in

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Management Accounting Report - Tata Motors
|19
|5698
|54

Management Accounting Assignment: Agmet Company
|20
|4580
|49

Management Accounting and its Essential Requirements
|20
|5188
|82

Management Accounting Assignment - Morphy Richards
|18
|4706
|80

Management Accounting - Tech Ltd
|16
|3979
|83

Management Accounting of Agmet
|18
|5320
|45