Management Accounting Report of Tech Imda
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Added on 2020-07-22
Management Accounting Report of Tech Imda
Added on 2020-07-22
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Meaning of management accounting and their essential requirements................................1P2: Various types of management accounting system reporting................................................4M1: Benefits of using various types of accounting system.........................................................7D1: Critical evaluation of various accounting reporting system.................................................7TASK 2............................................................................................................................................8P3: Various types of costing method uses for calculating net profit...........................................8M2: Analysis of various management accounting techniques..................................................13D2: Critical analysis of data collected from income statement.................................................13TASK 4..........................................................................................................................................13P4: Merits and demerits of using various budget......................................................................13M3: Analysis of various budgetary tools..................................................................................15D3: Critical evaluation of financial issues................................................................................15TASK 4..........................................................................................................................................15P5: Balance scorecard to overcome financial problems...........................................................15M4: Analysis of Financial problems.........................................................................................16CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................18
INTRODUCTIONManagement accounting is an essential aspect for every business organisation. Thiswould be helpful for the managers to increase their profitability and efficiency in quickermanner. The role and responsibility of managers is to research a well organise system that canassist in attain overall aims and objectives for an organisation. As mention in the case study“Tech Imda” is operating in electronic gadgets in different products in the UK market. In order toincrease the profitability for the company they need to make use of appropriate accounting toolsand techniques to record various financial transactions during the time (Amoako, 2013). This particular project report is providing valuable information about use of managementaccounting system and reporting in an organisation. However, various types of costing methoduses for calculating net profit for the cited company. Merits and demerits of using budget arementioned under this project. Some specific comparison is being done with other companies inorder to determine financial issues and effective tools to overcome those issues are discussedunder this project report. All the data collected by the managers are utilised in makingappropriate decision to generate more valuable outcomes in coming time.TASK 1P1: Meaning of management accounting and their essential requirementsFinance is said to be life blood of any business organisation. It is essential for trade,industry and commerce as main energy for wheels for the purpose of attaining overall growth forthe company in coming time. It is needed for establishing and operating any business, whetheroperating in small or large scale. Management is concern with provide valuable support theaccounts department to manage and control proper flow of capital in the department.Management accounting is an essential aspect by which manager and other crucial person thoseare related with the internal or external department supported in more effective manner.Accounting is an essential part of finance department in order to collect, summarise and analyseappropriate solution to the company (Brewer, Sorensen and Stout, 2014).Definition: Management accounting is known as a systematic process of formulatingmanagement report and account that delivering accurate and timely financial data needed bymanagers to make day to day decision financial transaction of an organisation. On the otherhand, management accounting is used to analyse business costs and operation in order to build1
internal financial report and statements to assist decision making procedure in attaining overallbusiness aims. The appropriate function implies mainly four parts such as: Planning: It has been seen that planning is an essential aspects for building short term andlong term actions to attain a specific objectives. A budget is the financial planning indicatingabout resources are being acquired uses over a particular time interval.Organising: This seems to be an effective process of establishing an organisational designand assigning role to an individual working in an organisation for attaining business aims andobjectives. It has been seen that types of organisational structure is differ from one businessenterprises to one another. Organisation needs clarity regarding each manager’s role and dutiesand line of responsibility (JOSHI and et. al., 2011).Controlling: It is known as an effective process of monitoring, measuring and evaluatingactual outcomes to ensure that a business enterprises aims to attain in more effective manner. Itis accomplished with the use of collecting feedbacks from various employees and staffs.Decision making: This process of selecting between competing best alternative from theirbusiness operations. It is inherent in every of three management functions that describe on thebasis of analysing performance of an organisation.Management accounting Financial accountingIt is used to regulate and examine by theentrepreneur, it is not consider standardizedstatements.It is associated with using law in morestandard manner.It also uses future information and data whichis not only historical data but uses for thepurpose of planning in coming time.These are mainly related with economic eventsof the past, the statements consists of historicaldata.The people are having no any obligations,although they need to decide on thecompany’s operations by using performanceof an organisation.The statement of accounting regulation isreported in more specific manner by usingfinancial data for the company.It is use to measure both financial andoperation performances.It is used to consider only financialinformation for the company.Importance of using management accounting system: It is used to make proper determination of aim, management accounting on the basis ofcollected information they are able to determine their goal and tried to find outappropriate route through which they can reach at their specific aims.2
It helps in preparing effective plan in which producer is taken into considered as morereliable more Successful to produce article in accordance with increase overall growth forthe company.It is use to measure overall performance of an organisation by comparing actual data withthe standard one (Klemstine and Maher, 2014).ABC costing: It seems to be an effective accounting tools that is used to analyseactivities that Tech UK need to perform and allot indirect to the cost of a products.Relevant costing analysis: Such kind of cost analysis is associated with administrationdecision that make modification according to the future results.Evaluation of using data: It is necessary aspect for every managers to deliverinformation that are being use to formulate appropriate planning in order to make vitaldecision in coming times.Types of management accounting system: Cost accounting system: It is known as primary accounting element of managementwhich is held significant in recording, analysing and determining best suitable alternative thoseare effective for Tech Imda. The important purpose of using this system is to provide valuableadvices to their owner regarding one of the main sources of actions that are assistance with thecost of manufacturing products and services. Through the help of this, company would be able togenerate more valuable outcomes by analysing efficiency and capability to delivery more reliableoutcomes for the company. It consists of various costs such as action, standard and normal costsuses during the time (Lim, 2011).Actual costingStandard costing Normal costingThis cost of job is being analysethrough using actual materialand applied overhead costs.In this particular cost, the basicamount of costs is taken intoaccount by using comparison ofbudgeted direct costs during thetime of manufacturing process.The normal cost a company isincurred from use of directlabour and material which isnormally being use in futuretime.Inventory management system: As per this particular system which a manager uses tocontrol their overall stock that is being kept by the company during the time. It has been said tobe ongoing process for the purpose of moving products and inventory that are being kept by3
Tech UK during the time. It is necessary for the owner of an organisation to control and analysetheir inventory level on regular basis.There are various types of stock valuation tools and techniques which is required to befollowed at the time of production process. Some of them are:FIFO: It is utmost important aspect for production managers in which actual flow ofmaterial required to follow this particular methods that used to make accounting tools as per thelogical selection.LIFO: There are specific businesses which is related with an asset management andvaluation method that assumes that all those stocks produces or attain last are one used in firsttime.AVCO: It is said to be periodic inventory system which is use as perceptual techniques inan organisation. There are more common as average cost techniques that use to analyse totalvalue of closing stock.Job costing system: It is utmost important accounting system for making predication oftotal costs required to formulate a well organise product and services during a specific period oftime. Basically, this costing system is use to analyse all those costs that are require during thetime of manufacturing an individual products or group of products. By the help of this, companywill be able to incur a particular job related with Tech UK Company.Batch costing: It is more similar as job costing in which all information about productsdetail production data and batch number are located is more easily. Contract costing: It is use to regulate proper flow of cost that are related with a specificcontract. Such as a company bids for a wide construction of any new projects associated to theirprospective individual.Process costing: It is mostly use as an essential aspect for a project management. Thisrequirements can be effectively use for allocating cost for producing one units during the time.Service costing: It is necessary techniques of operations costing that is helpful for anorganisation to deliver services in respect of producing goods in more effective manner.P2: Various types of management accounting system reportingIt has been seen that company need to make proper analysis of every financial transactionin appropriate manner in order to attain more benefits for the company. In addition to the basictraditional accounting report which Tech Imda must completer for the purpose of evaluating tax4
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