Benefits of management accounting systems : Assignment
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Added on 2021-01-02
Benefits of management accounting systems : Assignment
Added on 2021-01-02
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Management accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Meaning and requirement of types of management accounting..................................................1Different methods of management accounting reporting............................................................2Benefits of management accounting systems..............................................................................3System and reports of management accounting integrated with organization............................3TASK 2............................................................................................................................................3Marginal and absorption costing..................................................................................................3TASK 3...........................................................................................................................................61. Advantages and disadvantages of different types of planning tools used in BudgetaryControl.........................................................................................................................................62. Use of different planning tools and their application for preparing and forecasting budgets..83. Evaluate how planning tools for accounting respond appropriately for solving Financialproblems.....................................................................................................................................10TASK 4..........................................................................................................................................101. Organizations are adapting management accounting systems to respond financial problems....................................................................................................................................................102. Management Accounting can lead organizations to sustainable success by responding tofinancial problems......................................................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONManagement accounting is a internal accounting that use by managers formanage and maintain organization through evolution. Managers of organizationevaluate and analyze books and accounts that helps in make planning, organizing,directing and controlling. On the bases of financial performance they make effectivestrategies for development and increase efficiency (Chenhall and Moers, 2015). It isvery important and it makes by management for short term and long term that helpful inget quick information for decision making. This report will be cover that requirement ofmanagement accounting, methods use in it, planning tools of this accounting, helps ofthese tools for solve financial problems.TASK 1Meaning and requirement of types of management accounting.Management accounting is very helpful in make financial report by managersthat useful for decision making because ABC ltd. Evaluate and analyze all report andbooks than take decision for meet objective. Data of books and statement that isprepared so all these documenting s evaluate by managers regarding cost, profit andsaving. So it is very important for ABC ltd for manage all works and activities andincrease profit. Following requirements of management accounting :- Cost accounting systems :- this system of accounting is very useful for makeestimate of cost. Through this ABC ltd evaluate gap between cost and profit becauseorganization do all works for earn profit and increase revenue. It is a technique and toolof reduce production cost of products and fix selling price. Cost accounting system ofpast present and future evaluate by managers for making decision about budget,investment and expand business so that is important for all types of organization.Inventory management system :- this system of accounting majorly use bymanufacturing organization for trace all activities about stock. Management of ABC ltdget all information about inventory and movement of stock and products. It includesproduct from manufacturing to warehouse and warehouse to shipping. These thingsmake easy to management of inventory and making decision for increase profitability.Through this system organization easily track whole supply chain and analyze quantityof products running in work in progress (Bromwich and Scapens, 2016).
Job costing system :- it is very important for those organizations that produceproducts according to demand of customers. Different types of peoples demand differentproduct design and quality so organization face difficulty in costing because it createsdifficulties for organization. So through this system it easily calculates all cost andrevenue of products according to per item. ABC ltd evaluate revenue on per productbecause it main purpose is increase revenue and profit always earn more than it cost. Onthe bases of this system management of organization take decision easily and makestrategy.Price optimizing system :- this system of accounting is use by all types oforganization and through this it evaluates that customer reaction according to price ofproducts. So ABC ltd easily make decision about price and cost of products. Customersalways wants to quality products at low price and if price of product decrease so theirdemand increase and organization attract customer through this easily. So managementof organization easily evaluate all things about customers and then provide according totheir choice and demand at reasonable price.Process costing method :- this costing method use by organization that producemass products and organization face difficulties to calculate per unit cost. Products passfrom many process during production so each process contain cost separately. Thismethod make easy to calculate cost of process.Different methods of management accounting reporting.Management accounting is a technique of evaluation of all financial reports and takedecision for expand business and increase investment. Through this it makes budget onthe bases of tax, revenue and expenses. Following are different methods:- Financial report :- this report includes many types of books and records thatkeep by ABC ltd of whole financial year. It includes balance sheet, cash flow statementand profit and loss account and income statement as well. Management of organizationuse this account for evaluation and knows about all operation.Pro forms cash flow :- this statement helps in keep all data and informationabout flow of cash in ABC ltd as per financial year. Cash flow statement includes alltransaction that related to cash. Cash inflow and outflow is two part of this statement ifcash comes organization through sales of products and return on investment that it
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