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Management Accounting Assignment - LM Engineering ltd

   

Added on  2020-10-05

18 Pages4859 Words458 Views
ManagementAccounting
Management Accounting Assignment - LM Engineering ltd_1
ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Management accounting and its different systems..........................................................1P2. Explain different method of management accounting reporting......................................2M1. Evaluation of benefits of various management accounting systems..............................3D1 Management accounting system and management accounting reporting are integratedwith organisation process.......................................................................................................4TASK 2............................................................................................................................................4P3: Cost accounting techniques to prepare an income statement...........................................4M2: Management accounting techniques and financial reporting documents.......................7D2. Financial reports which applies to interpret many business activities.............................7TASK 3............................................................................................................................................8P4. Advantages and disadvantages of different types of planning tools used for budgetarycontrol.....................................................................................................................................8M3. Usage of different planning tools for preparing and forecasting budgets.....................10TASK 4..........................................................................................................................................10P5 Comparison of how organisation adopt management accounting system so as to respond tofinancial problems................................................................................................................10M4 Analysis of how in responding to financial problems management accounting can leadorganisations to sustainable success.......................................................................................2D3 Various planning tools to resolve financial problems......................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
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INTRODUCTIONManagement accounting play a significant role for an organisation as it assist themanagement to make suitable reports which enables them to formulate an effective decision. Forthis, accounting manager is held liable to perform its roles and duties in reliable manner so thatan organisation can maintain its financial stability in competitive market for longer period oftime. The present assignment is based on LM Engineering ltd company which is engaged in civilengineering and planning services based in United Kingdom and offers to the people of northernBritish Columbia. The project discussing various management accounting system along withtheir benefits. The project also includes reporting system, cost accounting methods, planningtools to control budget including contingency, flexible and scenario tools along with their meritsand demerits. There are various financial resolving tools such as KPI, Benchmarking etc. whichwill be also explained briefly in order to maintain profitability of organisation in market. TASK 1P1: Management accounting and its different systemsManagement accounting may be defined as the process or an activity of recognising,summarising, presenting and recording of financial transactions in books of accounts such asprofit and loss account, balance sheet, cash flow statement etc. The concept of managementaccounting are directly related with tracking and estimating costs that will be incurred in futurebusiness operations so that wastage of funds can be eliminated (Management accounting and itsimportance, 2019).1
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LM ENGINEERING LTD. company use various accounting systems in order to maintainfinancial records on the basis of which decisions has been made for the purpose of achieving itsdesired goals and objectives. Here are the some accounting systems which can be adopted by LMENGINEERING LTD.:Cost accounting system: It is a system which is beneficial to analyse cost of goods andservices including variable, fixed cost etc. It is essential for every organisations such as LMENGINEERING LTD. to have proper estimation about the cost invested in providing itsofferings due to estimating their net profitability generated in near future. LM ENGINEERINGLTD. can adopt such system with the purpose of analysing cost of different products and serviceswhich enable them to offer in market with added margin.Price optimisation system: It is a system which assist LM ENGINEERING LTD. toidentify buying perception of its targeted customers which enable them in setting up their pricesthat ensures their profitability in future period of time. For this, accounting manager need to hireresearcher to bring out the information about the satisfaction level of their targeted customers inrelation of their current pricing policy which drives them to re-think whether to continue tofollow existing pricing policy or should change it in future (Christ and Burritt, 2013).Job costing system: It refers to the system which assist LM ENGINEERING LTD. incalculating total cost that will be incurred in providing its wide range of products and servicesafter allocating cost to each financial service individually. It is most suitable to adopt byorganisation who is providing its products and services in different range. LM ENGINEERINGLTD. can use such system to make proper estimation of each individual unit's cost so as todetermine their future profitability generated by them from each of its products and services.Inventory management system: This is the system which is used to track the status ofinventory available with an organisation as it enable an organisation to meet its customer'sexpectations and needs on time which increases loyalty and trust towards an organisation. LMENGINEERING LTD. uses such system in order to ensure about the availability of its productsand services. For an instance, if firm wants to track mortgage loan's clarification then suchsystem help in checking the status of that service.Comparison of management accounting and financial accounting:BasisManagement accountingFinancial accountingMeaningIt is a system which isIt is a system which mainly1
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