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Management Accounting Assignemnt | Jo-Jo juice centre

   

Added on  2021-02-20

14 Pages4785 Words44 Views
ManagementAccounting1

ContentsINTRODUCTION...........................................................................................................................3MAIN BODY..................................................................................................................................3P1) Management accounting and essential requirement of different types of managementaccounting systems......................................................................................................................3P2) Methods used for management accounting reporting...........................................................5P3) Calculate Costs using Appropriate Techniques of Cost Analysis to Prepare an IncomeStatement Using Marginal and Absorption Costs.......................................................................6P4) Explain Advantages and Disadvantages of Different Types of Planning Tools Used forBudgetary Control.......................................................................................................................9M3 Use of different planning tools and their application for preparing and forecasting budgets...................................................................................................................................................11P5) Compare How Organisations are Adapting Management Accounting Systems to Respondto Financial Problems................................................................................................................11CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................162

INTRODUCTIONManagement accounting is the process of providing financial information and resource tothe manager into the decision making. It is only used by an internal team of an organisation andthis is the only thin which helps to makes it being different from the financial accounting. Thus,the objectives of the management accounting is to utilises this statistical data and takes out thebetter and accurate decision, controlling an enterprise, business activities and development. Inthe current era, role of the management accounting is to be deals with managerial aspects of anorganisation and checks out accounting formulation into the management of a business function.This report will be carry out on Jo-Jo juice centre with an agenda of producing juices products. A report will cover concept of the management accounting and essential requirements ofa different types of management accounting system. Also, report will also cover different methodwhich is used for management accounting reporting and finds costs of appropriate techniques ofthe cost analysis to prepares income statement with using of marginal and absorption methods.Also, assessment will also led discussion on different types of the budgetary control and howbusinesses are adapting managerial accounting system. MAIN BODYP1) Management accounting and essential requirement of different types of managementaccounting systemsManagement accounting Management accounting is a process of determining, monitoring and controlling theoverall performance of a company to ensure generation of more profits in future. Manager of acompany need to provide several managerial reports or records, which helps shareholders tomeasure the performance of company whether it is doing well or not (Zoni, Dossi and Morelli,2012). The managers of JOJO fruit juice are timely conducting management accounting to assesstheir performance and also provide suggestions to top level to achieve the targets.Management accounting system It is basically a management tool used to analysis the performance and actual status of anorganisation. It provides a base for effective decision making after proper analysis of accountingrecords and budget. It also helps in determining the current operational level and profitability ofa company. In JOJO fruit juice, managers are using proper management accounting system to3

keep a record of its day to day transactions to properly analysis its profitability and to anticipatethe future challenges on time. Effective accounting system will help in determining andcontrolling different costs included for various activities .Different accounting systems that areused by JOJO fruit juice company are:Price optimisation system : the main of this is to determine the price of manufacturing aproduct after including all costs I.e. manufacturing cost, selling cost and also the promotion cost .This also considers competitors price strategy, product life cycle and the goals company want toachieve. If company wants to increase its sales they mainly keep low prices but if they want toget higher profits they set high prices for their product. Price optimisation system is required byall companies to determine the reaction and demand of customers at different price level (Bryer,2013). Demand of a product is directly related with its price so, JOJO fruit juice is providing itsproduct at moderate price to maintain a balance between sales and profits.Inventory management system: This concept is mainly usedby manufacturingcompanies as they have to keep a check on availability of raw material required to manufacturethe product. Proper inventory management ensures timely availability of product without anyshortage or wastage of material. There are many types of inventory management system whichare discussed below:First in first out (FIFO): As per this method, the old inventory which enters the warehouse firstis on priority for the purpose of manufacturing of product. Last in first out (LIFO): According to this method the recently or last bought stock is used firstfor production of goods. Average cost method (AVCO): For this method stock is used on average basis, i.e. average istaken out after each movement (inward or outward) of inventory and on basis of this amountinventory is put on priority for production. Fruits are the raw material or inventory required by the JOJO fruit juice formanufacturing. The inventory of JOJO is of perishable nature which can not be put on hold for along period of time, therefore for this company FIFO is most suitable for inventorymanagement . Cost accounting system: This system is used for keeping a record of different costinvolved in manufacturing a product. Cost mainly includes expenses made on manufacturing likelabour cost, raw material cost, etc. It also includes selling and distribution cost. It is required by4

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