Managing Management Accounting Table of Contents

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
1) Importance of management accounting for decision making process towards improving
organisation's performance..........................................................................................................1
2) Different management accounting systems for preparing reports..........................................2
3) Critical evaluation on management accounting systems........................................................4
4).................................................................................................................................................5
a) Comparative income statement using marginal and absorption costing.................................5
b) Reasons behind profit variation..............................................................................................8
c) Reconciled statement of profit and loss account.....................................................................8
SECTION 2 (Nero Ltd)...................................................................................................................9
Part (a) Different planning tools.................................................................................................9
Part (b) Ways to prevent financial problems obtained at Nero Ltd..........................................10
CONCLUSION..............................................................................................................................11
REFERENCE.................................................................................................................................12

INDEX OF TABLES
Table 1: Income statement using marginal costing method.............................................................6
Table 2: Income statement using absorption costing method..........................................................7
Table 3: Fixed and under absorbed costs for 1st and 2nd quarter...................................................8

INTRODUCTION
Management accounting is composition of all accounting systems including financial,
cost, inventory and so on. It is essential for identifying actual position of business operations and
decision making for organisation's effectiveness. The present report is based on understanding
significance of management accounting regarding business activities of Nero Ltd. In this regard,
various types of management accounting reports, income statement for through marginal and
absorption costing is to be described. However, different budgetary control systems for
forecasting and decision making can be introduced through this assignment. Along with this,
financial tools for reducing economic problem of the entity is to express. Thus, learners are able
to understand importance of management accounting for decision making regarding business
operations of the organisation through this report.
SECTION 1
1) Importance of management accounting for decision making process towards improving
organisation's performance
Management accounting is multidisciplinary approach that evolves several tools for
decision making and organisation's effectiveness. For example; financial accounting, cost
accounting, inventory management accounting, performance management accounting and so on.
However, management accountant of the entity analyses all financial tools and further makes
decision regarding further business operations to improve its economic position. Moreover,
sevral tools are used for decision making such as costing, budgeting, variance analysis etc. In
which, organisation's performance is analysed at first and further strategies are prepared for
better quality services and enhancing effectiveness (Akhavan, Ward and Bozic, 2016). Along
with this, it remains helpful for optimum utilization of resources and fund that impacts on
productivity and profitability of the entity effectively. Therefore, various tools are recognised
that impacts on further operations and its competitiveness for longer time periodicity. Thus,
management accountancy reads, analysis and interprets the informations and data obtained from
the external and internal business environment and reports the data to the management. This
report helps the management in making policy related decisions in effective manner.
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