logo

P4 Advantage and disadvantage of different types of planning tools

   

Added on  2021-02-21

14 Pages2831 Words30 Views
Management Accounting

ContentsINTRODUCTION......................................................................................................................3TASK 1......................................................................................................................................3P1. Management accounting systems.....................................................................................3P2 Different methodologies used in management accounting reporting;...............................5TASK 2......................................................................................................................................6P3 Appropriate costing techniques to prepare income statement...........................................6TASK 3....................................................................................................................................10P4 Advantage and disadvantage of different types of planning tools..................................10TASK 4....................................................................................................................................12P5. Management accounting systems to respond to financial problems:.............................12CONCLUSION........................................................................................................................13REFERENCES.........................................................................................................................14

INTRODUCTIONIn business world the concept of management accounting is defined as the systematicapproach that collect, analyse, report crucial business operations so that essential decision aremade by management in order to grow entire performance and profitability of business(Abdelmoneim Mohamed and Jones, 2014). To better recognise the importance ofmanagement accounting LVS Small Plastic Parts Ltd is selected which is a client company ofAon Consulting. Company use to manufacture plastic product that are further used inproducing essential goods. The reports cover importance of management accounting, different types of report andsystem that are helpful in dealing with various financial problems. In this report severalcosting techniques are used to calculate net profit for the year. In Addition, advantages anddisadvantages of planning tool and benefits of management accounting in dealing withvarious financial problems are defined in detail.TASK 1P1. Management accounting systems.Management accounting systems are the methods used to process, collect, gather,analyse, report and evaluate meaningful business information in order to make effectivedecisions regarding the use of the funds of any organization. Each kind of financial and non-financial information is presented in a way that help managers to estimate budgets, plansaccordingly with the business objectives, and also permit them to be focused on the analysisof business activities in order to fulfil those objectives. There are different kinds of effectivemanagement accounting systems that support the decision making process and improveoverall the productivity of company and also provide essential guidelines so that entirestrategy can be helpful to attain the desired objective. Some of these in the context of LVSSmall Plastic Parts Ltd are discussed below: Inventory management system: One of the most crucial system for manufacturecompany as it help to maintain a valid record of inventory company holds during a specificperiod. This system aids manager of company to forecast stock, materials tracking, automaticreordering etc. It is recycled for defining goods accessible through whole supply series alongwith business processes events (Bloomfield, 2015). In respective company manager use thissystem to keep a valid record of entire inventory available during a period. This helps them to

produce goods accordingly and make order for raw material in case of shortage of good. Thissystem also benefits them supporting required inventory, real time movement and variouskinds of inventories essential in achievement of customer demands. Furthermore, this systemalso assess the management to keep a close control on raw material so that they can beeffectively utilise to increase manufacturing. It also help to record the waste generated whileproducing useful product and make startegies to control excess wastage. Cost accounting system:In large or small companies it is essential to maintain anauthentic record of overall cost included in maintaining inventory, cost utilised in productionprocess etc. thus cost accounting system is very much essential. Approximation of definitecost is very essential for any industry as it support to calculate overall profitability ofbusiness. It includes events founded on accepting, recording, examining, grouping andsummarizing costs related with valuable goods and services. In LVS Small plastic Part Ltdcost accounting system is useful to calculate the total; cost included in running differentproduction operation, cost incurred of workforce and other miscellaneous cost. This furtheruseful to calculate and measure the entire profitability of business and in case of any miss-happening improvement are made to attain desired results.Price Optimisation system: It is also consider an important system, used bycompanies that help to analyse the perception of customer in respect to price of differentgoods offered by company. With the support of price optimisation system manager are baleto calculate the best possible price of their goods that will attract large number of customerand support them, top maintain desired profit. In LVS Small plastic Part Ltd to increase thesales figure manager first use this system to analyse the entire cost utilised on producing aspecific product so that they are able to fix the best price of product. Suitable price helpcompany to attract more number of customer which directly increase the profit of companyand make enough funds to reach the desired target (Bagautdinova, Kundakchyan andMalakhov, 2013). Job costing system: This system is used for accumulation of information related tocost associated with particular job or service. In LVS Small Plastic Part Ltd this system isbeneficial to determine the expenses related with particular job involved in productionprocess and other department. Job costing system is set of resources used to measure, control,and make decisions about the specific investment or amount of funds needed to accomplish aspecific activity which can be very more or less complex.

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Management Accounting Systems and Costing Techniques
|15
|3332
|97

Unit 5 Management Accounting Level-4
|18
|4321
|69

MANAGEMENT ACCOUNTING INTRODUCTION 3 TASK 13 Introduction of management accounting system
|13
|3948
|112

Application of Management Accounting System
|15
|4294
|24

Management Accounting Systems and Methodologies
|16
|3606
|67

Management Accounting Systems- Doc
|18
|4562
|317