Management Accounting : Galway Plc

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Management accounting with its essential requirements......................................................3
P2. Methods used in management accounting reporting.............................................................5
M1. Benefits of accounting systems............................................................................................6
D1. Ways in which accounting systems with reporting mechanisms are closely integrated
within procedures of organisation................................................................................................7
TASK 2............................................................................................................................................8
P3. Calculation of costs in order to prepare income statements..................................................8
M2. Accounting techniques with appropriate reporting documents..........................................13
D2. Financial reports together with data interpretation.............................................................13
TASK 3..........................................................................................................................................14
P4. Planning tools......................................................................................................................14
M3. Uses of planning tools........................................................................................................15
TASK 4..........................................................................................................................................16
P5. Comparison among organisations in context to adapting accounting systems for
responding financial problems...................................................................................................16
M4. Analyses of the ways financial problems are responded and management accounting leads
entities to sustainable success....................................................................................................18
D3. Panning tools for solving problems so to lead success.......................................................19
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
Management accounting is the involvement of financial information and presentation of
data which helps to make key business decisions (Budding, Grossi and Tagesson, 2014). It is
used by business concern by analysis and evaluating information. In other words, it is a internal
management which helps to control over business activities and take corrective actions. This
report is based on importance of management accounting that states how to make decisions. To
understand this Galway Plc has been selected that is a manufacturer of single product. The
manager are playing important role as they gather the data and collects information for taking
right decisions. Various topics are going to be covered in such report such as management
accounting system, accounting report and planning tools for controlling the budget. Moreover,
marginal and absorption costing is used to calculate profits and financial problems that can be
solve by using management accounting systems.
TASK 1
P1. Management accounting with its essential requirements.
Management accounting is used by managers or accountant within organization in order
to analysing, classifying, gathering and controlling the financial information. Management is
related to managing the business activities and accounting states financial information and
transaction which are used to maximize profits. Management accounting is related term which is
widely used by organization for sustaining growth and development (Christensen, Cottrell and
Baker, 2013). Such as Galway is a manufacturing company that produce products by involving
all cost and expenses properly. The main aim of business organization is to maximize
profitability by using management accounting.
Management accounting systems are the systematic study of process and procedure
which helps in decision making process. It states different activities like controlling and
reporting, performance evaluation, decision making, planning and budgeting which leads to
maximize profits. Systems are useful for organization which helps managers to measure the
statical data, price level and cost of organization. Therefore, Galway Plc is using different types
of management accounting that are defined below:
Cost accounting system - To estimate the cost of products for the purpose of knowing
profitability by controlling cost this system is used by business organization. Mainly, it is

required to get the exact cost of products, so decisions can take accordingly within organization.
For example, Manager of Galway Plc is a manufacturer of single products, that is using cost
accounting system to get the real cost of products during manufacturing process. Such system
helps managers to know which product is profitable and which one not, that is essential decision
for respective company.
Price optimization system - Organizations are using this system to determine the price
of particular products. It is a mathematical analysis which is used to set the prices of products
that is essential for businesses (Collis and Hussey, 2017). Prices is important element which
helps to make customer buying decisions. It has requirement to determine the prices of products
by involving cost of manufacturing. For instance, manager of Galway Plc are determining the
prices of products by understanding the customer perception about the prices of products.
Therefore, respective company is using price optimization system that helps to make profits.
Inventory management system - It is a combination of technology which is used to
monitor and maintain stock products. Such system is associate with information such as barcode,
assets, availability and labels of inventory which is essential required for all organization. By
using this system Galway Plc can track the inventory level and proper maintenance of stocked
products. This system helps to improve cash flow, reduction in storage cost, improves
relationship between supplier and vendor, reduce dead stock and also reduce labour cost of an
organization. Stock is maintain by managers through a software that helps to prevent stock out
and managing multiple locations.
Job costing system - There are different cost arises due to manufacturing products which
need to monitor by assigning cost in to each product is consider as job costing system. Is is used
to track of expenses which is important for organization in order to make profits. It has essential
requirement to track the cost of each job and maintaining data for the purpose of making more
relevant to the operation of business. Galway Plc is using such system to assign the cost in to
specific process or products that helps to operate business successfully and smoothly.
Therefore, all system are used by Galway Plc to make the right business decisions which
increases profitability productivity. Such system has essential requirement that has to maintain
the business at up position and attracts customer by setting the reasonable prices of products.