Management Accounting and its Requirements

Management
Accounting

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Identification of fields in management accounting and their requirements...........................3
P2 management accounting reporting and Method................................................................5
TASK2.......................................................................................................................................6
P3 Income statement using marginal and absorption costs....................................................6
TASK3.......................................................................................................................................8
P4 Merits and demerits of budgetary tools............................................................................8
TASK4.....................................................................................................................................10
P5 Financial problem and response of organization............................................................10
CONCLUSION........................................................................................................................12
REFERENCES.........................................................................................................................13
Books and journals...............................................................................................................13

INTRODUCTION
Management accounting is referred to a process which is related to identification of various
cost and using appropriate information in order to manage the financial resources of
organisation (Drury, 2018). There are a number of purposes which will be included under the
management accounting system which are related to communication of info to different
parties in order to achieve the objectives of organisation. In relation to the current report, it is
based on study of Capital joinery. In relation to the current report it includes discussion about
the management accounting and its essential requirements. There is also a discussion about
various methods used in management reporting. Along with this, this report is also the
discussion about calculation about the cost of organisation. In last, there is discussion about
various planning tools which are used for budgetary control with advantages and
disadvantages and differentiating how the enterprises can adopt a management accounting
system in response to the financial problems.
MAIN BODY
P1 Identification of fields in management accounting and their requirements
Management accounting can be defined as a process which involves managing
various accounts of organization in order to meet the financial requirements and identification
of different cost so that organization can perform its function in an appropriate way and
achieves the objectives in timely manner. Management accounting is useful system to the
organization as it promotes standardization within the work as well as help in meeting the
requirements of stakeholders. Capital joineryis also using management accounting in order to
strengthen its decision making process as well as identify various requirements in the
meantime (Otley, 2016).
According to the institute of management accounting "management accounting can be
defined as a term which is used by professionals in relation to meeting the decision-making
abilities of organization and planning about the financial performance. Include evaluation of
different financial accounts and identification of cost which are related to the products and
services offered by organization in the current business time".
There are a number of management accounting systems and types which has to be
managed by organization in order to achieve better system. In context of Capital joineryit is

also utilizing appropriate system which is helpful for manager to utilize the function and
perform them in an effective manner. Some of these functions are discussed below:
Profit maximization: management accounting is useful for organization in
maximizing the profitability. This is because management accounting helps in evaluation of
various financial statements of organization which help in evaluating the current position of
firm and identifying the cost involved in different products and services. This enable
organization to use appropriate system and manage financial accounts according to the
requirements (Maas, Schaltegger and Crutzen, 2016).
Efficiency booster: management accounting is appropriate systems which help in
increasing the efficiency of employees and performing the function in an appropriate way. In
context of the current business environment, management accounting help in identifying the
actual function which are performed by organization and remedies which can be used to
improve those functions. These functions are associated with current profitability of
organisation and efficiency of employees in working. By utilizing the accounts in an
appropriate manner and performing the functions of management accounting lead in better
profitability and efficiency.
Management accounting system
Inventory management system: It is a part of management accounting which helps
business entity in managing inventory in accordance with its sales. In context of Capital
joinery, manager within management accounting identify the current stock of inventory is
within storage of organization As well as at physical stores. This is helpful to Organization in
analyzing its current functions and performing them in an appropriate manner. Real manager
divide inventory in raw material finished good and semi process good. This is helpful to the
manager in evaluating the inventory within Capital joineryand using an appropriate method to
identify the aging inventory and selling it prior to the new inventory.
Cost accounting: It is also act as a part of management accounting. This is helpful to
Organization in managing the functions of costing. It can be defined as a system which was
adopted by organization under the topic of management accounting where organization has to
identify different cost which are involved under the process of selling goods and services
from beginning to end. This provides specific guidelines to organization about the process of
cost involved in various function and help in achieving business objectives. Include