Assignment on (MA) Management Accounting

Added on - 06 Jun 2020

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MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Explain management accounting and give the essential requirements of different types ofmanagement accounting systems..........................................................................................1Essential requirements of different types of management accounting systems.....................4P2: Explain different techniques and methods used for management accounting reporting.5M1 Evaluate the benefits of management accounting systems and their application withinMarks and Spencer...............................................................................................................11TASK 2..........................................................................................................................................12P3: Calculate costs using appropriate techniques of cost analysis to prepare an incomestatement using marginal and absorption costs....................................................................12M2 Accurately apply a range of management accounting techniques and produce appropriatefinancial reporting documents.............................................................................................13TASK 3..........................................................................................................................................15P4 Ascertaining planning tools and budgetary control technique with merits and demerits15M3 Analyse the use of different planning tools and their application for preparing andforecasting budgets..............................................................................................................23TASK 4..........................................................................................................................................23P5 Comparing the organisations implicating various management accounting techniques todeal with financial problems................................................................................................23M4 Analyse how, in responding to financial problems, management accounting can leadorganisations to sustainable success....................................................................................25CONCLUSION..............................................................................................................................26REFERENCES..............................................................................................................................27
INTRODUCTIONTo resolve the financial and managerial issues in the organisation there is implication ofvarious management accounting system techniques. These are the techniques which will bebeneficial and adequate for the professionals in recording the transaction, summarizing it andhaving the adequate analysis over the issues of the operations. In the present report there will bevarious costing and reporting technique which helps in ascertain the costs and fund requirementsfor venture. It also highlights the use of planning tools and budgetary control techniques in thebusiness performance as to have the better information regarding the profitably and efficiency ofthe business. There has been analysis of the financial data of Eastern Ltd on the basis of marginaland adsorption costing techniques.TASK 1P1 Explain management accounting and give the essential requirements of different types ofmanagement accounting systems.Management accountingManagement accounting can be understand as per analysing the role of management andaccounting techniques therefore, management is denoted as making the effective plans andcontrol system to set the overall operational criteria of venture. On the other side, accountingrefers to recording all the transaction held in a period to analyse the cost and profits (Cooper,Ezzamel and Qu, 2017). However, the management accounting is the process where all thetransactions were recorded by the accountants and they analyse the outcomes and makenecessary decisions.Features of management accounting system:There has been several features of management accounting system which will bebeneficial and helpful to the entity in terms of making the adequate analysis of performance andefforts made by professionals of venture (Ax and Greve, 2017). However, the managementsaccounting mainly used for decision making which enables the entity to have standards costingand budgeting techniques. The main features of this technique are:It studies the causes and effect relationship in consideration of financial accounting,profits and loss accounts.1
It determines the total elementary costs such as fixed, variable and semi-variable costs.It is totally different from financial accounting as it is useful for managerial decisions.It helps in modifying the data and have the proper interpretation of such analysis.Principles of management accounting:There are various kinds of management accounting techniques which will be helpful toventure in terms of attaining the adequate revenue with better efficiency. However, suchtechniques will be helpful to the entity in terms of achieving the business objectives with properallocation of the resources (Kenno and Free, 2017). However, the main principles of this systemare as follows:The transactions were to be designed, recorded, reported and relevant statements werepresented by the accounting professionals on periodic basis.These cost are to be controlled on the basis of relevant sources and proper analysis.The accounting system facilitate the return on investment over the projected plan ofventure.The management accounting information system:2
There are various kinds of management accounting reporting system which are meant tobe performed and analysed by the professionals of venture. Managerial professionals need tomake proper analysis of the financial accounting techniques for the operations of the business. Ithelps in recording the transactions in the data set and provide the accurate results (Latan andet.al., 2018).Types management accounting system:Cost accounting:The costs accounting will be profitable in terms of analysing the costsincurred in each functions of venture. There are various costs accounts which will be helpful tothe entity in terms of analysing the requirement of funds for the operations. However, these costsincludes job costing, batch costing, variable, fixed, direct and indirect.Tax accounting:This is necessary for the business growth of venture to have the betterrevenue as well as periodically making payments of the taxes. It is essential for entity in terms ofmaking the payments of corporate taxes, duties, transportation charges etc.Budgetary:The professionals in venture need to present their estimation towards therequirement of funds and costs going to be incurred in the particular activity. The budgetsinclude several budgets such as sales, cash, production, promotion etc.Auditing:It will be helpful to entity in context with having a periodical audit of theaccounts which will facilitate the overall information regarding the performance of venture.Financial accounting:It includes preparation and presentation of all the financials offirm such as balance sheet, income statements, cash flow statement etc.Management accounting:There is need to include all the management accountingtechniques which will be helpful to them in terms of analysing status of the costs and resourcesavailable to them.Accounting system designing:This a computer based data system which keeps therecords of all the necessary transactions held in venture. Therefore, the motive is to design theaccounts and the source of information which must be cost effective in order to facilitate theinformation. It includes Single or double entry, account code structure, cash or accrual basis,Divisional representation, Reports, Procedure, controls etc.3
Non for profit accounting:This type of accounting technique is not having anycommercial owner as the funds generated in the accounts will be utilised for the welfare of thesociety. It will be used in health and social care services, educational or technical development,donations etc.Inventory management system: this technique will be helpful to venture in terms ofmaking the adequate analysis over the availability of resources in the organisation as well asproper management of inventory it checks the numbers of imported goods as well as numbers ofexported goods. Therefore, such determination will be beneficial in decisioning the productionlevel of the business.Job costing: To determine the level of funds utilised while performing a particular job ortasks. However, there are various departments and different jobs are being performed by theindividual which is need to be managed and monitored. Moreover, it helps in analysing the costsincurred in each operations such a direct material, labour and overhead expenses.Price optimisation: To analyse the satisfactory costs over the products and services thereis need to have appropriate pricing decisions. It must meet the costs of the operations as well asmust be convenient for the consumers.Essential requirements of different types of management accounting systemsThe requirements of different kinds of management accounting system which will behelpful in various operational factors such as:It helps the ascertaining the costs incurred in each business operations such as labour,material, manufacturing, selling etc.It manages and executes the price fixation with the help of various budgetary techniques.It will be beneficial in reducing the costs as well as proper control over the level ofwastage.The Unprofitable or unfruitful activities will be identified and which will help themanagers to make the decision to find the alternative solution.The accuracy of the financial accounts will be checked and analysed4
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