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Management Accounting Assignment - Swain & Jones

   

Added on  2020-10-05

14 Pages3853 Words251 Views
MANAGEMENT ACCOUNTING

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1P1 Management Accounting, types and its requirement.............................................................1P2. Various methods of Management Accounting Report..........................................................3P3 Calculating cost by using appropriate methods.....................................................................4P4 Advantages and disadvantages of various planning tools used for budgetary control .........6P5 Management accounting system for responding financial problems.....................................8CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTIONManagement accounting is very necessary for each entity with its various principles andtechniques. The main aim of this report is to highlight fundamentals of management accountingwhich can be applicable for business environment and for firms who are operating in certainenvironment. It has been applied in all financial data for determining and monitoring thefinancial; performance of organization. The present report is about a manufacturing organizationthat is Swain & Jones who is operating with 45 employees and there decision making process hasbeen analysed by using several accounting techniques such as job costing, inventorymanagement etc. in this report there is brief discussion about income statement according to bothmethods, absorption and marginal costing with there key differences. There is explanation aboutvarious planning tools for management accounting with its limitations and merits. In the last partof this report, adaptability of management accounting systems in context of responding severalfinancial problems has been addressed.P1 Management Accounting, types and its requirementManagerial decisions are undertaken by considering management accounting in veryeffective manner (Fullerton, Kennedy and Widener, 2014). All business managers who arecontributing in decision making for short term or even day to day operation are usingmanagement accounting for preparing statistical and financial information. The financialinformation is classified, analysed, recorded, identified, delivered and interpreted withperspective of objectives of an organization that has been termed as Cost Accounting. As theyboth sound similar but they have different variations as management accounting assist managersof organization for decision making and financial accounting gives information for externalparties of entity. When management accounts reports are prepared, gives very specific, accurate and timelystatistical and financial information which are considered as very important aspect for decisionmaking of short term and day to day decisions. The management requirements are alsoaccomplished in these reports.The information of management accounting is directly used for the purpose of internalusers and it creates a difference from financial accounting systems as it is publicly reported. Themanagerial accounting has been applicable which always varies as system is customised forproviding information which is essential for management for decision-making. Management1

accounting has various kinds which are price optimisation, cost accounting system, inventorymanagement and job costing system. Every kind has their role and functions in managementaccounting which is elaborated as follows: Price Optimisation: It is considered as a basic method for applying differentmathematical analysis of Swain & Jones for identifying customer reaction for different cost ofgoods and services via various channels. Generally prices are identified which Swain & Jonesmight attain objectives such as rising operating profit. For achieving performance or cost, it canbe discovered by taking alternatives and it will be very effective for constraints, by increasing theaspects which are desired and vice versa (Messner, 2016).Cost Accounting System: It is a basic framework which is undertaken by variouscorporations for determining product's cost, profitability analysis, and cost control and inventoryvaluation. The cost allocation will be according to activity based costing or traditional costingsystem. The production cost of different corporation has to be captured is considered as main aimand along with this input cost has been weighted for every step of production and fixed cost likecapital equipment and depreciation. This system is known as special concept of managementaccounting as it provides particular analytical tools like budgetary control, marginal costing,inventory control and standard costing who are applicable with perspective of management byreplacing their reproducibility in very efficient manner.Inventory Management: Generally, it has been referred for tracing and recording ofapplication, ordering and storing component of different production of goods which are sold bythem. The desktop software, barcode printers, barcode scanners and mobile devices arecombined for streamlining inventory system like consumables, goods and stock. In this system finished goods which ready for sale are also tracked as their main aim is tosignify present level of inventory. In this context they identify stocks for minimising ormaximising for Swain & Jones. Their main role is to constitute purchasing orders, disposing,relocating, receiving and adjusting the inventory. Sales order, shipping, picking and packaginghas been created by them for production and physical count of inventory is performed here. Itdirectly reflects in bottom line of company by enhancing accuracy of inventory, workflow oforganization and in same series it is improved.Job Costing System: The manufacturing cost is allocated here for individual item ofproduct or some specific batch. Generally it is applicable where goods are processes from one to2

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