Management Accounting: Cost Analysis, Reporting, and Budgetary Control

Management Accounting
Table of Contents
INTRODUCTION...........................................................................................................................3

TASK 1............................................................................................................................................3
P1. Management accounting and requirements of various types of management accounting
system.....................................................................................................................................3
P2. Several methods which are used for management accounting reporting.........................5
TASK 2............................................................................................................................................6
P3. Calculation of cost by using accurate techniques of cost analysis and prepare income
statement with the help of absorption and marginal costs......................................................6
Absorption costing...........................................................................................................................7
TASK 3............................................................................................................................................8
P4. Advantages and disadvantages of various kinds of planning tools which is used for
budgetary control....................................................................................................................8
TASK 4..........................................................................................................................................11
P5. Comparison of organisations and how they are adopting accounting system of
management to respond financial problems.........................................................................11
CONCLUSION..............................................................................................................................14
REFERENCE.................................................................................................................................15
INTRODUCTION
Management accounting refers to the process of offering lots of resources and financial
information to the managers of an organisation by which they can take appropriate decisions in a
perfect way. It is also known as managerial accounting which can be only used by the internal

team of company. According to this process of management accounting financial reports like
financial balance statement, invoice shared through the team members of an organisation. Along
with this there are some management objectives which is used to make appropriate decision to
develop effective growth of business. For better understanding of this topic ASDA has been
chosen as an organisation. Further discussion will be based on cost analysis in relation to
marginal and absorption cost (Aldehayyat and Maan, 2013). Along with various kinds of
planning tools and difference will be explained for adopting management accounting system to
responding of financial issues.
TASK 1
P1. Management accounting and requirements of various types of management accounting
system.
Management accounting is the process of identifying, analysing appropriate cost of
operations in order to make records, internal financial reports for accomplishing business goals
and objectives. On the other side, it helps organisations to make accurate costing method to use
effective information tool for gaining higher advantages perfectly. In context with ASDA they
define their overall business performance by using different types of tools and techniques like
forecasting, comparisons, budgeting aspects and so on. On the basis of this they can easily make
proper data and records in order to develop effective managerial operations for improving
manufacturing process of clothes (Anandarajan, Anandarajan and Srinivasan, 2012).
Wherein, management system involves in the internal system of an organisation by which
they can examine the overall performance of their business operations to achieve targeted goals.
In regards with ASDA through using these system of management accounting they can make
their business functions in a systematic manner. With the help of different objectives manager of
this respective company able to make decision without any issues into the marketplace. That's
why this company using both non financial and financial accounting tools for getting better
information towards their improvements in the process of running business. Apart from this there
are large number of effective combinations between different sectors of management accounting
by which organization can increase their viability at marketplace. As per the ASDA they are
properly using management accounting system to make their management inventory in an

effective manner (Christ and Burritt, 2013). Additionally, by adopting effective pricing method
respective company can enhance their value of firm and make proper costing method within the
particular time frame. It shows that present organisation needs to adopt all these managerial
accounting functions to improve their overall business organisations.
Principles and Origin of management accounting
As per this analysis the management accounting concept was origin through the England
during the time revolution of industries. It involves several activities and their implementation on
financial issues by which companies can improvised. There are few principles of management
accounting that affects organisations and make proper trust in relation with orientations within
the companies.
Difference between financial and management Accounting:
Comparison Financial accounting Management accounting
Governing principles In this statements are
developed according to the
GAAP analysis named as
(Generally Accepted
Accounting Principles). This
concept so many features.
This accounting concept do
not have any exist standard
preparations of accounting
statement and accomplish
management teams goals.
Time Horizon They generally takes one year
to developed as accounting
year.
It is categorised on the behalf
of future, so they do not have
proper time horizon.
Aim Financial accounting has aim
to gathering and collecting
information for continue
improvements and involves
customers and investors.
They aims to established
proper decisions.
Reporting beneficiaries Financial accounting has been
formulated for external users
As per this reports are made
for CEO, directors, promoters