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Project on Costing Methods and Reporting Systems
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Added on 2020-06-04
Project on Costing Methods and Reporting Systems
Added on 2020-06-04
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Management Accounting
ContentsFROM: MANAGEMENT ACCOUNTING OFFICER...........................................................................................3TO,..............................................................................................................................................................3GENERAL MANAGER.............................................................................................................................3ROWLINSON KNITWEAR COMPANY................................................................................................3SUB: MANAGEMENT ACCOUNTING SYSTEM...................................................................................3INTRODUCTION.......................................................................................................................................3TASK 1.......................................................................................................................................................3P1: Different types of management accounting and its essential requirements........................................3P2: Different methods for management accounting reporting.................................................................6M1: Benefits of management accounting................................................................................................7D1: Critical analysis of reporting system.................................................................................................8TASK 2.......................................................................................................................................................8P3: Various costing methods...................................................................................................................8M2: Evaluation of accounting techniques..............................................................................................10D2: Critical evaluation of profit and loss statements.............................................................................10TASK 3.....................................................................................................................................................10P4: Advantages and disadvantages of using planning tools...................................................................10M3: Evaluation of planning tools..........................................................................................................12D3: Critical analysis of financial problem.............................................................................................12TASK 4.....................................................................................................................................................13P5: Various measures to resolve financial problems..............................................................................13M4: Evaluation of financial issues.........................................................................................................14CONCLUSION.........................................................................................................................................14REFERENCES..........................................................................................................................................15
FROM: MANAGEMENT ACCOUNTING OFFICERTO,GENERAL MANAGERROWLINSON KNITWEAR COMPANYSUB: MANAGEMENT ACCOUNTING SYSTEMINTRODUCTIONManagement accounting is the process of identifying and analyzing the organizational and operations cost with a motive of preparing financial reports and documents which help management to make an effective and profitable decision in order to achieve desired goals and objectives. It helps in translating costing and financial data into useful and profitable informationfor management so as to plan policies and preparing budget for future business objectives. Rowlinson Knitwear, a UK company which deals in producing durable garments for corporate, schools etc. with a purpose of enhancing the personality among others is taken for the purpose ofpreparing this report. The company generally does not directly supply products to the public as they focuses on getting support from specialist retailers who help their products to reach to their targeted customers (Alsharari, Dixon and Youssef, 2015). The project covers the different costing methods and reporting systems which helps company to evaluate their profitability and current position in competitive market. There are various planning tools which are useful in budgetary control are also discussed under this report along with their merits and demerits. Thus,the overall project is based on the management accounting system which drives company to achieve growth and success within limited period of time.TASK 1P1: Different types of management accounting and its essential requirementsDefinitions:The Institute of Management Accountants (IMA) defined management accounting as “ It is the profession which guides and assist management to make an effective decision, planning and strategies regarding achieving desired goals and objectives with the help of valuable information obtained though ad\opting various management accounting system.
According to the Certified Management Accountants (CMA), “Management accountant should required to use their own professional skills and knowledge in order to prepare financial reports and other decision oriented information in such an effective and accurate way that will help in assisting management in the making of policies and controlling the business operations activities in more profitable manner(Aykan and Aksoylu, 2013) .Meaning: Management accounting is the process of measuring the success or failure of the business and identify whether the business moves towards right direction or not. It is the process of analyzing the performance of different departments through reviewing their actual performance with expectations. Its main objective is to find out the best possible way to reduce cost in the production process so as to bring maximum possible output.Importance of Management accounting:The management accounting plays crucial and important roles in ensuring the effective performance by performing following functions:Planning: It helps management in making short as well as long term plans and policies inorder to achieve desired target within limited period of time. Preparing budget is the part of planning through which the managers can able to allocate resources in such areas of department from which they can achieve profitable outcomes. For example: The managers of Rowlinson Knitwear need to first make a plan regarding the prices they should charged from their customerson buying their products that will help in maximizing satisfaction of customers and at the same time helps in maximizing the profitability of company (Bobryshev and et. al., 2015).Organizing: It is the process of arranging resources of company in such an effective way that will help in getting positive outcome to company in near future. As here are different departments in an organization thus all roles and responsibilities need to properly defined and allotted to them so that they perform in right direction with help of utilizing available resources in an optimum manner. For example: The manager of Rowlinson Knitwear need to identify the efficient employees who are good in performing particular roles and accordingly assign them suitable responsibilities in order to achieve profitable outcome.Controlling: It is the process of re-arranging and re-planning the actions if any deviationsfound which restrict company in achieving desired goals and objectives. The managers need to monitor, measure, analyze the actual results through collecting reviews and feedbacks from their employees and accordingly takes corrective actions to bring all business activities in right directions. For example: Due to using outdated technology, the cost of production increases through which Rowlinson Knitwear cannot able to provide quality products at an affordable price to their targeted customers. Thus, in order to control this, the managers need to take corrective actions regarding implementing updated and advanced technology in order to reduce cost and achieve huge profitability (Chenhall, 2012).
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