Management Accounting Principles, Systems, Reports and Techniques for British Associated Foods

UNIT 5 MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Explaining principle of Management Accounting (MA).............................................................1
Describing role of management accounting and its system.........................................................2
Describing Different types of MAS.............................................................................................2
Explaining different management accounting reports along with its integration in firm............4
Calculating cost using appropriate technique such as absorption & marginal............................5
Evaluating integration of MA within organization......................................................................7
Explaining benefits of function to organization..........................................................................8
PART 2............................................................................................................................................8
Comparison and contrasting planning tools utilized in management accounting.......................8
Ways in which management accounting deals with financial problems in the organization....10
Recommendations......................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is concerned with having both monetary and non-financial
information in order to make sound decision. In the present environment of business complexity
and competition has inclined which require firm to pay attention on developing significant
technique of management accounting for making strategic decision. The current report is based
on British Associated Food which operates in manufacturing sector by offering food product.
The current report will pay attention on explaining principles of management accounting for
gaining depth insights. It will highlight role & different types of management accounting system
along with benefits and drawbacks. The present investigation will highlight different methods of
management accounting reporting. It will give emphasis on presenting income statement as per
the two technique such as absorption and marginal. Integration of management accounting
within company & benefits of functions will be included in current study. The study will focus
on explaining planning tools and ways to solve financial problem by comparing two firms to
get depth understanding.
PART 1
Explaining principle of Management Accounting (MA)
A manufacturing organization like British Associated Foods has to follow principles of
management accounting in its operations. Following are the principles of management
accounting,
Designing and compiling :
The accounting information is needed to be recorded, with statements that have evidence
on the present, past or future results. It is considered to be the design which helps in the
compilation of the meetings which are needed to be the problem in the business.
Control at source accounting :
As per these principles the costs are better controlled at the points at which they occur.
This is the way of controlling the exercise through employees materials and service providing
devices.
Stability and consistency :
These are procedures of management accounting and thus, needs to be kept stable and
consistent as possible. It helps the management for making decisions and plans for hampering a
rapid change in the policies and procedures (Pylypiv and Pіatnychuk, 2018.).
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Forecasting and detection of problems :
The information of the management accounting to the management is for the analysation
of the existing problems which are considered to be the problems which impact the future,
identity problems of the steps for their solutions.
Describing role of management accounting and its system
MA play crucial role in providing the crucial information for making strategic decision.
In order to become successful in the present working environment, MA helps in gaining number
of benefits that incline productivity and effectiveness of operational practices. Management
accounting ensure that there is optimum utilization of resources by evaluating requirement of
each department (The Role of Accounting Management in Decision Making, 2022). It provides
assistance in planning, allocating and monitoring monetary resources in turn desirable outcome
can be derived. this contribute in setting the coordination among all the functional areas through
communicating essential data insights so that productiveness among employees can be inclined.
There are several activities in business which is required to be managed by British Associated
Foods (BAF) through formulating proper policy in order to facilitate coordination & control.
Reporting is as well exerted by using management accounting reports so that significant
information utilization for organizing and managing operational activities of manufacturing
procedure can be done. In addition to this, trend, cost analysis, price fixation, etc. are executed
by MA.
Management accounting system refers to the tools that help in gaining crucial insights
about the processing of business in turn formulation of sound decision can become possible
(What Is a Management Accounting System? 2022). There are different types of Management
Accounting system that are considered to be essential for managing functioning of company.
This includes inventory management, cost accounting and job costing and price optimization
system which allows firm to get ability to accomplish requirements in order to attain
predetermined objectives.
Describing Different types of MAS
Cost Accounting System (CAS)
It is one the framework that is taken into process for estimating the cost of their products
for profitability, inventory and expenditure control. British Associated Foods can implement this
system to have proper understanding about the prevailing cost so that identification of irrelevant
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