Management Accounting System and Reporting

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Management Accounting System:..........................................................................................1
P2 Management Accounting Reporting:.....................................................................................2
TASK 2............................................................................................................................................3
P3 Application of appropriate costing method:...........................................................................3
Case 1............................................................................................................................3
Case 2............................................................................................................................4
TASK 3............................................................................................................................................5
P4 Planning tools and budgetary control:....................................................................................5
Budget:..........................................................................................................................8
Alternative methods of budget:...................................................................................10
Behavioural implications of budget:...........................................................................10
TASK 4..........................................................................................................................................10
P5 Adaptation of management accounting in response to financial problems..........................10
Financial Problems:.....................................................................................................10
Financial Governance:................................................................................................11
Comparison:................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
In a competitive environment of business, each organization have to develop a strong
emphasis on its internal management and operations so that it can survive. Management
accounting is a set of activities and tools for doing the same. It is a framework that develop and
control the internal environment and functions of the establishment.
For a better understanding of management accounting, Aspall Cyder Ltd has been chosen
which is an England based manufacturing company deals in ciders and other apple derived
drinks and purchased by Molson Coors Brewing Company in 2018. this report covers an enhance
knowledge of management accounting system and reporting, application of financial and costing
techniques, use of different planning tools and financial governance in identifying and solving
financial problems.
TASK 1
P1 Management Accounting System:
Management accounting system: Management or managerial accounting system is a
framework that collects the data and convert it into such material information and statements that
help the internal management to plan strategies and make decisions in an effective and efficient
manner (Banham and He, 2014). The management of Aspall Cyder uses various types of
managerial accounting system in order to manage the internal matters. Some of them are
mentioned below:
Cost Accounting System: This system is specially helpful for manufacturing companies
such as Aspall Cyder as this system is used to evaluate the overall manufacturing cost of the
products manufactured by the companies. Cost accounting system is used to calculate the actual
and standard costs on each level from production to sell.
Inventory management system: Inventory management system is a preliminary system
that shape, monitor and control the movement of stock or goods. This system is developed to
track the overall process of manufacturing from purchase of raw ingredients to delivery or
shipment of the finished goods. The management of the selected company follow this system to
trace the location of its products.
Price optimization system: Price optimisation system is utilized to maximize the
organizational profit along with providing optimum customer satisfaction. The management of
1

respective establishment follows this system to evaluate the reactions of customers regarding
different price set for the various products provide by the firm and find out the best price
according to the customers and organization as well.
Job order costing system: Job costing system is mostly used by the construction
companies to calculate the cost of a specific task or project (Carlsson-Wall, Kraus and Karlsson,
2017). When a particular or customised project of manufacturing products is given to the chosen
company, the management apply job costing management system to evaluate the cost of that
particular task.
P2 Management Accounting Reporting:
Management accounting reporting: Managerial accounting reporting is a process to
create impressive reports which assist the owners and managers in monitoring performance of
the organization as well as the effectiveness of the employees. These reports are prepared by the
management accountants of the Aspall Cyder Ltd for various departments, employees and
activities as well. Some of the accounting reports created by the administration are presented
below:
Budget Report: Budget reports are prepared with the help of previous year outcomes,
current year budget and actual outcomes at the end of the financial period. This report helps the
management in identifying the variances between actual results and budgeted figures and it also
defines the reasons behind these deviations (Endenich and others, 2016). Aspall Cyder's
managers utilise these reports in evaluating the measures and accurate level of income and
expenditures in upcoming budgets.
Accounts Receivable report: The companies which extend the credit to their customers
are essentially needed to prepare these reports on a regular basis so that they can manage the
cash flow of the organization. The management team of respective firm create these reports to
track the due receipts, interest on credits, details of the debtors and manage its debtor turnover
ratio.
Inventory management report: The manufacturing companies such as Aspall Cyder
creates this reports to track their physical inventory. These reports include the information
related to the material wastages, per unit overhead cost, labour hour rates, etc. The management
can use these reports to compare different processes of manufacturing and improve the
production quality along with cost reduction (Grossi and others, 2014).
2