Management Accounting Concepts and Techniques for Decision Makers

Management Accounting
Concepts and Techniques
for Decision Makers

Table of Contents
Introduction......................................................................................................................................3
Task1................................................................................................................................................3
P1 Management accounting it's essential requirements of different types of management
accounting systems......................................................................................................................3
P2 Explain different methods used for management accounting reporting................................5
Task2................................................................................................................................................7
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs. .........................................................................7
Task3..............................................................................................................................................11
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control......................................................................................................................11
P5 Compare how organizations are adapting management accounting systems to respond to
financial problems.....................................................................................................................13
Conclusion.....................................................................................................................................14
REFERENCES..............................................................................................................................15

Introduction
Management accounting can be defined as a application that includes measuring,
analysing, understanding and most importantly communicating and presenting to their managers
in order to accomplish organisation goals (Alsharari and et. al. , 2015.). It provides support to
the manager to make timely as well as inform decisions within the Organization. They utilize
information that is associated with cost along with sales generated in exchange of the goods and
services offer by the company to their customers. This ultimately helps them to make both short
term as well as long term decisions.
Connect catering services is the company that has been operating their business from last
thirty years in United Kingdom (U.K). They are family oriented and provide the best quality
foods as well as services. They do this by their highly talented and motivated workforce with the
aim of providing to ensure maximizing their customers satisfaction. This project is undertaken
to assist their Senior management for providing them a better understanding Management
accounting. This will be done by addressing their concerns relating to understanding as well as
application of different technique, usefulness of planning tool and also comparing how the
accounting will solve financial problems.
Task1
P1 Management accounting it's essential requirements of different types of management
accounting systems.
As Management accounting comprises of two words ''Management'' and ''Accounting''.In
simple terms it studies management aspect of accounting (Binns , 2018). It basically deals with
analysis,interpretation and presentation of accounting by referring to management and cost
accounting. The ultimate aim of management accounting is to plan,implement policies aid in
decision making process of handling day to day operations.

Management accounting takes into accounts diverse areas of company's financial
outcome and fulfils different requirements which mainly includes revenues, sales, operating
expenses and cost controls. Below are the high-level areas which company mostly employees to
improve financial metrics of the company.
Planning, Forecasting and Budgeting:
Managerial accounting mainly involves predicting and planning in order to project the
direction relates to company's finances in the coming years to come. This planning requires a
high-level thinking in the form of preparation. This is done by altering different accounting
information in various functional budgets (Butler and Ghosh ., 2015. ).
Risk assessment:
Another crucial benefit of management accounting it easily identifies and assesses risk
factors within the organization and can be controlled and minimized through effective
management (Collier, 2015)
Performance management:
This is another important benefit of performance using managerial accounting can aid the
management to make effective decision in real time. This help them to maintain cost and remain
competitive in the long run (Dekker , 2016.).
Influence: Communication is one of the most important aspect in management accounting as it
improves the decision-making process. The accurate and integrated communication encourages
diverse thoughts which helps in generating new ideas which will aid the company in getting
closer to their desired objectives. Through effective discussion of the business requirement, it is
way easier to implement and get the most required information. It can be inferred that
recommendation are vital for managers as it allows them to gain authority.
It is also vital for the Company to go through different roles and principles of Management
accounting in order to be apply it appropriately: Some of the main roles can be explained below:
Relevance: Information is valuable for all it is just that each one of them need to segregate the
required information from the all the available resources. Management accounting check
accurately both the information that is important as well as people and method being employed
for making such decision. It is primary and most important for any company to look for the well-
being of all their shareholders to take the most relevant and valuable information for making the
appropriate decision and the same is important for doing the required arrangement for evaluation.