Management Accounting: Techniques and Tools for Decision Making

Management Accounting
Case Study

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Discrimination of management accounting and its systems...................................................3
P2 Methods of management accounting reporting......................................................................2
M1 Benefits of management accounting system.........................................................................3
D1 Evaluation of integration between management accounting system and various managerial
report............................................................................................................................................3
TASK 2............................................................................................................................................3
P3 Managerial accounting techniques.........................................................................................3
TASK 3............................................................................................................................................5
P4 Explanation of advantage and disadvantage of planning tools..............................................5
M2 Application of management accounting technique and procedure of financial reporting....7
D2 Procedure of financial report and interpretation of its benefits.............................................7
TASK 4............................................................................................................................................7
P5 Uses of managerial accounting system to solve financial problem........................................7
M4 Explanation of how management accounting can lead organization success by resolve
financial problem.........................................................................................................................9
D3Explantion of uses of planning tools to solve financial problem............................................9
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
Management accounting is a part of managerial functional process. It is a systematic process in
which manager used accounting data as a source of information and take decisions well as
formulate policies by using managerial accounting information. In order to understand this
concept briefly Murrill Construction Limited has been taken. It is a manufacturing medium
size organization which engage in build highway, building, and provides maintains services
to their clients it is situated in Wokingham, UK. In this report uses of management
accounting system for taking essential decision, formulation of managerial parts through
which organization can analysis their performance is defined in a brief manner. This report
also consist uses of various management accounting technique through which manager can
identify cost and profit ratio within the given time period. It also considered how managerial
accounting tools help in overcome problems related to finance.
TASK 1
P1 Discrimination of management accounting and its systems
Management Accounting: It can be defined as a branch of accounting which is used for decision
making process. During this process accosting information is collected, recorded and analysis
and communicated to internal party of the organization. Management accounting also known as
managerial accounting (Carlsson-Wall, Kraus, K and Karlsson, 2017). The data collected from
tools and system uses by management accounting is only useful for internal party of business
entity. Managerial accounting system includes various system through which manager can
identify cost ,determine price and recognize each activity process. Manager of Murrill
Construction Limited can be use following accounting system for run their construction
activities:

help in controlling cost expenditure as wells helps in taken essential decision regarding risk man-
agement.
 Price management system: It is adopted by organizations to determine the price of each
product of organization. Various pricing strategies has been recognized which included,
cost pricing, penetration, price skimming etc. Price management system help manager to
optimum utilization of their financial resource as well as it is useful for taken decision re-
garding profit maximization policy. Murrill Construction Limited is a construction based
organization thus it is essential for their manager to adopt price mechanism system it will
help them to determine price on the basis of cost or other strategies whit they can earn
profit by their construction business (Suomala, Lyly-Yrjänäinen, and Lukka, 2014).
 Inventory management system: This system used for identifying cost incurred in manage-
ment of inventories, raw material finished goods of the organization. It is essential part of
business organization as it will useful for managing each level of inventory . Inventory
management system included various tools ABC, JIT, analysis and technique through
which organization analysis system of maximum, minimum and normal level of stock .
Manager of Limited can be used this system as it is beneficial for their organization. They
can identify easily cost of each part of construction and able to control the wastage of
each part of inventory, as they suffered from heavy losses in their construction felid work
by applying mechanism of the system Murrill Construction Limited l will be able to
maintain their balance of inventory
 Job process system: It is essential system of management accosting. Into job costing sys-
tem manager use technique through which they c identify cost of each part of process.
This system is many use in those organization which run their operational activities on
the basis of contract. Murrill Construction Limited provides their service on contract ba-
sis thus it is require for them to adopt job costing system through which they can control
their cost and identify cost of process.
P2 Methods of management accounting reporting
Reports are the prepared for managers to identify whatever heir organization performing well or
not. A comprehended management accounting report has been formulated by manager for
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