Methods of Management Accounting Report

Added on - 18 Dec 2019

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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1...........................................................................................................................................4P1 Management accounting and requirement of different types of management accountingsystem..........................................................................................................................................4P2 Methods which are used for reporting of management accounting.......................................5TASK 2...........................................................................................................................................7P3 Cost calculation with the help of marginal and absorption cost techniques..........................7TASK 3..........................................................................................................................................11P4 Advantages and disadvantages of the budgetary control planning tools in the case ofAustin Fraser.............................................................................................................................11TASK 4..........................................................................................................................................13P5 Comparison of how organisations adapt system of management accounting for respondingto financial problems.................................................................................................................13CONCLUSION.............................................................................................................................15REFERENCES..............................................................................................................................16
INTRODUCTIONManagement accounting is basically defined as the way through which cited entities willbe able to analyse financial statements and it will assist management who will help in givingdetailed description of the company's financial position, which is generally required by thevarious stakeholders of the company. It is defined as the occupation which helps to give supportto the administration or management in the process of decision making, proper planning and alsohelps in the management of employees performance (Kaplan and Atkinson, 2015). It also givessupport in the making of financial report and control for supporting management in the strategyformulation and implementation. These accounting provisions are being used by the managers soas to get important information for taking decisions, which helps in the proper management ofthe functions. This report is based on the Austin Fraser which is a recruitment consultantcompany and deals in the information technology, engineering and various sectors of lifescience. This report will provide help regarding different methods of management accounting,and will also support in determining disadvantages and advantages of planning tools ofbudgetary control. Reports which are based on the management accounting will helps to showwhat kind of amount is available with the company and will also help inn the analysis of profitgeneration.TASK 1P1 Management accounting and requirement of different types of management accountingsystemManagement accounting is the way which helps in analysing, using, sourcing andcommunicating different decisions which are in relation with finance and non financeinformation for generating and preserving value of the entity. It is the combination of accounting,financing and administrating the different skills and techniques of the business which is requiredfor adding value in any entity (Macintosh and Quattrone, 2010). Management accounting keepson working in the overall business, it not just give advice to managers, implicate and financeimportant decision, formulate business strategies and monitor risk of the business. It tends to useeach and every kind of information and not just the information which is related to the finance,which will help in leading business to the success. Marginal absorption and costing is one of the
tool and technique of accounting through which entity can prepare effective and efficientstrategy to maintain productivity in the business.There are several management accounting system which will be helpful in thedevelopment of Austin Fraser. Management accounting also provides support in the to reduceexpenses of operational activities. It is used by the business owners to review operation's cost ofthe activities and the economic resources which will be used by the entity. It helps to understandproperly that how much money should be required by the business (Baldvinsdottir, Mitchell andNørreklit, 2010). It is also used for conducting various analysis on the quality of the resourceswhich will be used in the production. Management accounting also helps to improve the cashflow because budgeting is its important part. Owners of the business use budget so as to get thefull analysis of the financial map which will help in the maintenance of future expenses. Masterbudget can also be prepared by the company for the analysis of needed expenses. It helps toincrease the financial returns as by this forecast report can be prepared related to finance for thesales and demands of customers.Management accounting is required for the different purpose and these requirements canbe defined as :Traditional based management accounting : This is the very important managementaccounting system, it helps to focus on the cost which is a means of job order and a wayto process cost. This method will be helpful for the Austin Fraser , as the entity will becapable to allocate different types of cost which is relation with material, labour andmanufacturing. This system is the most useful and necessary for the entity. Job ordercosting is used in the manufacturing companies who have large projects (Ward, 2012). Sofor this, such type of techniques will be helpful for tracing and the company will be ableto allocate resources easily in the desired project. Process costing techniques helps in theallocation of different processes.Lean management accounting : This is the kind of term which is used by the mentionedentity for the need of change in relation with control, administration, accounting andmeasurement which will help to assist the lean manufacturing and thinking. It isrevolutionary as it not just focus on the cost , but is also helpful in the support to makestrategies for controlling and reducing the management cost. This type of accountinghelps the management accountants to define different strategies which are in regards with
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