Management Accounting Concepts and Techniques for Decision Makers

Management Accounting
Concepts and Techniques
for Decision Makers

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Essential requirements of different types of management accounting systems....................1
P2: Explain different methods used for management accounting reporting...............................2
M1 Benefits of management accounting systems.......................................................................3
D1 Integration of management accounting system and reporting process.................................4
TASK 2............................................................................................................................................4
P3: Range of management accounting techniques......................................................................4
M2 Application of range of management accounting techniques to prepare financial reports...9
D2 Financial reports to apply and interpret data for a range of business activities..................10
TASK 3..........................................................................................................................................10
P4: Explaining the use of planning tools in management accounting......................................10
Evaluate different planning tools and implement at the time of developing forecasting budgets
...................................................................................................................................................12
TASK 4..........................................................................................................................................12
P5: Adapting management accounting systems to respond to financial problems...................12
Analysis of the way in which management accounting can help organisation to lead
sustainable success....................................................................................................................14
Use different planning tools to resolve financial problems of the organization.......................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting is defined different concepts and methods that require for
effective planning and selecting from among alternative business activities. It is important aspect
which is used for formulation and application of strategy in the context of organisation success
(Abernethy and Wallis, 2019). This report based on Pearl chartered accountant which is UK's
best accountancy firm. It is providing consultancy services to different types of customers in
regard of accounting tax and growth strategies. A new client Connect Catering services has
approached to firm to advise on the introduction of management accounting system. In this
report consist of various kinds of management accounting systems and their essential
requirements. Along with calculate cost of company by absorption and marginal costing. At the
end of the report define different types of financial problems of company that respond by
management accounting systems.
TASK 1
P1: Essential requirements of different types of management accounting systems
Management Accounting: It is a accounting method that used by the every type of
entity to analysis their strategies and apply as per the requirement. This method supports in
decision making procedure and enhance profitability in positive manner. Through this method
concentrate on financial as well as non financial information for different activities.
Management accounting system: This system is utilised by the business entity to
determine the actual performance of business entity. It provides directions to all internal
stakeholders to analysis profitability of business that supports to increase performance of whole
business. In Connect catering service, managers use this system to track each department
information and analysis future challenges. There are defined different types of MA system in
the context of Connect catering service (Atrill and Lindley,eds., 2019).
Price optimization system: It is most important system which is used by the business
entity to set effective price structure of each product so it helps to attract large number of
customers in regard business activities. Such as, Connect Catering used this system to set menu
and mention price of each food product as per the requirement. The management of company
conduct research about other restaurants and determine their food items prices. Accordingly
company set price of their food product to it helps to attract more customers. As a result they try
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to accomplish long term business objective like profit as well as sales maximisation. This system
is essential require to set effective price structure and determine the response of clients on
different prices.
Inventory management system: It is most important system which is used by the
manufacturing organisation to track raw material at different stages. Through this system
analysis inventory process at each level and proper utilise of resources as per the manufacturing
procedure. The essential requirement of this system to checking and determining of entire
business supply chain, buying to production to end sales activities. As a result it helps in
effective decision making procedure (Babajani,Barzideh and Khonaka, 2018).
Job costing system: Every organisation conduct various activities that analysis by the job
order costing system. This system utilised by business to categorised different task after that
track the record of business procedure. In connect Catering manager use this system to operating
various activities as per the specification of various customers. It is essential for business in order
to direct management in regard of price product and job separately. With the help of this
manager can determine profitability and recognise specific job that are not beneficial for entity
so higher profits could be generated in future.
Cost Accounting system: It is a type of management accounting system which is using
by the entity for predication of costs of items and service occur in entity. Such as, Connect
catering service use this system to calculate actual cost of each cost after the manufacturing then
add profitability for generating profitability. The essential requirement of the system to
determine cost of each item and estimate future activities accordingly.
P2: Explain different methods used for management accounting reporting
Management accounting reports: It is a document that prepared by the organisation to
record different activities of various department. Along with it helps to determine financial
information and operations that helps in decision making procedure. Such as, Connect Catering
service prepare such reports to maintain good performance and enhance profitability of business.
In the context of Connect Catering prepare different types of management report to present every
department depth information in proper manner. On the basis of these reports company take right
decision (Babajani, Barzideh and Khonaka, 2018).
Inventory management reports: Such kind of report prepared by the business entity to
record all the raw material usage because it helps to production department to supply all
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