Management Accounting Systems and Techniques for Cost Calculation and Budgetary Control

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management accounting systems..........................................................................................1
P2: Explanation of different methods that are used for management accounting reporting:.......3
M1: Benefits of management accounting systems.......................................................................4
D1: Critical evaluation of management accounting systems and management accounting
reports..........................................................................................................................................4
TASK 2............................................................................................................................................5
P3: Calculation of costs...............................................................................................................5
M2: Accurate application of management accounting techniques..............................................9
D2: Producing of financial reports for accurate application and interpretation of data...............9
TASK 3............................................................................................................................................9
P4: Planning tools for budgetary control.....................................................................................9
M3: Analysis of planning tools..................................................................................................11
TASK 4..........................................................................................................................................11
P5: Comparison of organizations...............................................................................................11
M4: Analysis of financial problems...........................................................................................13
D3: Evaluation of planning tools...............................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES................................................................................................................................1

INTRODUCTION
Management accounting is a process through which the managers of an organization are
able to analyse and interpret the given financial facts, figures and information appropriately for
ensuring that the attainment of the short-term, medium-term and long-term goals and objectives
can be made possible in the future without facing problems and issues. This will be helpful in
making sure that the overall level of efficiency as well as effectiveness can be enhanced. Its
usage can be helpful in helping the firms a lot in making a use of the financial information in a
proper manner. Decisions of various types can be taken by the managers by making its use as it
provides them with the necessary guidance for taking decisions. Capital Joinery Ltd. Has been
selected for the purpose of analysis in this report. This company specialises in the making of
joinery, made-to-measure doors as well as windows. This report will cover an understanding of
the different types of systems, calculation of various costs, explaining the use of planning tools.
Additionally, specific analysis on comparison of ways in which organizations make use of
management accounting systems for responding to financial problems will be covered as a part
of this assignment.
TASK 1
P1: Management accounting systems
Management accounting systems can be used for ensuring that the financial data, facts
and information can be managed in an appropriate manner. Explanation of the management
accounting systems can be done in the following manner-
Cost accounting system- This is a system which helps in ensuring the analysis of the
overall level of costs. This can help a lot in the attainment of the various types of goals as well as
objectives. For a company like Capital Joinery Ltd. It can help in ensuring that the overall
management of the costs can be carried out appropriately.
Essential requirements-
 Assessment of the overall costs can be made within the organizations in a highly effective
manner. Thus the overall level of needs and requirements can be managed in an
appropriate manner without problems and issues.
 This system must be quite helpful in ensuring that the management of the internal costing
needs and requirements can be done in a proper manner.
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Inventory management system- In this system, there should be an assessment of the
level of inventory within the organizations in a highly effective manner. This system must be
able to help the managers a lot in ensuring that their level of stock is managed properly. The
level of efficiency and effectiveness can be maintained in the companies like Capital Joinery Ltd.
So that the stock can be managed in a right manner.
Essential requirements-
 This system makes sure that a detailed assessment of the various stock items is carried
out in an appropriate manner. The level of efficiency and effectiveness within the
management of inventory items can be maintained by raising the overall level.
 This system must ensure that the costs of management of inventory can be identified and
thus the necessary actions can be taken so that these costs can be reduced in a highly
effective manner. The managers of Capital Joinery Ltd. Can make sure that the inventory
level is managed effectively and efficiently in this manner.
Job costing system- In this system, a detailed assessment of a wide variety of job costs
can be done which can be helpful in ensuring that the different types of job costs can be managed
in a proper manner without facing problems and issues. In Capital Joinery Ltd., an assessment of
the various job costs can be made and the ways of reducing these job costs can be applied
effectively and efficiently.
Essential requirements-
 The assessment of various job cost requirements can be made in a right manner in this
particular system. This ensures that the management of Capital Joinery Ltd. Are able to
identify the job costs and find ways of reducing them.
 This system should be helpful in ensuring that a wide range of job costs can be assessed
and the actions be taken for reducing them. For the managers of Capital Joinery Ltd. This
can be quite helpful in achievement of the goals and objectives.
Price optimization system- This system ensures there is a detailed assessment of a range
of prices to be set. This helps the managers of Capital Joinery Ltd. Are able to make sure that the
assessment of the prices to be set can be made and the different types of requirements related to
the pricing can be identified so that the decisions can be made.
Essential requirements-
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