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Management Accounting System and Techniques : Report

   

Added on  2020-07-23

19 Pages5534 Words43 Views
MANAGEMENTACCOUNTING
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Management accounting and its types..................................................................................1P2. Explaining methods used in management accounting reporting..........................................3M1. Application and advantages of Management accounting system........................................4D1. Evaluating integration of management accounting system within organisation..................5TASK 2............................................................................................................................................5P3. Income statement using different costing techniques...........................................................5M2. Applying various management accounting techniques.......................................................7D2. Interpreting financial reports................................................................................................8TASK 3............................................................................................................................................8P4. Advantages and disadvantages of budgetary control tools...................................................8M3. Uses of different planning tools in forecasting budgets....................................................10D3. Planning tools for solving financial problems...................................................................11TASK 4..........................................................................................................................................12P5 Use of management accounting system for responding financial problems........................12M4. Sustainable organisation through responding financial problems.....................................13D4. Benefits of planning tools in sustainable organisation.......................................................13CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15
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INTRODUCTIONManagement accounting is a managerial function. It includes tools that are used bymanagement in advising the company about the techniques and measures to be used in order todevelop and grow organisation. It facilitates provision making for financial data. Main purposesof management accounting is to facilitate decision making process and to provide suggestionsand advices for effectual performance of organisation.Coffee Pound has been considered as per the requirement of scenario that employees ofthe company need to be less than 50. The present report explains the management accountingsystem, its roles, uses, techniques and types in brief. The report is prepared in context withCoffee Pound for the better understanding of management accounting system. Coffee Pound issmall business organisation under restaurant industry. The present report also includespreparation of income statement using marginal costing and absorption costing along withexplaining difference between the two. The report also provides various budgeting and pricingmethods that can be used by Coffee Pound. TASK 1P1. Management accounting and its typesManagement accounting is a tool that is used by the manager of an organisation for theprocess of identifying, accumulating, analysing, preparing, interpreting and communicating theinformation used by them. It tracks the allocation of cost to products and services of thecompany. Management accounting system helps the internal user of the information in takingfuture economic decisions. Managers using management accounting makes provisions forvarious financial and non- financial decision regarding the organisation. It involves functionslike performance management system, management decision making, etc. along with helping themanagement in preparing organisation strategy (Armstrong, 2014). It is used by the managementfor making their day to day decision using various management reports. Management accountingsystem comprises various element of accounting including report of incomes and expenses,budget reports, investment reports, etc.1
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Various types of management accounting systems are:Inventory management system: This system of management accounting helps management incarrying off inventory into the organisation. Finished stock and raw material, both are managedunder this system. Nowadays, for managing inventory, various computer software's has beendeveloped therefore these software's have helped managers in reducing their work load (Bertz,and Quinn, 2014). With the help of this software's it is easy to manage various functions ofinventory like, purchase, opening stock, closing stock etc.Price- Optimising system: This system is used to calculate the differences between the demandof products and services at different price level using mathematical models. Determineddifferences are then analysed and combined with inventory level and cost information todetermine the prices of products and services for achieving best profit levels. The system alsoidentifies the best price that will meet the objectives of business. This technique can beimplemented various industries like hospitality, restaurant , manufacturing, etc.Cost accounting system: This segment of management accounting system is used to estimatethe cost of various products and services produced by a business unit (Bodie, 2013). The mainpurposes of cost accounting system is controlling cost, valuation of inventory and analysing theprofitability of company. It is typical to determine the accurate of cost if company is dealing inwide range of products and services, hence the system of cost accounting is difficult to operateand so requires an experienced and professional cost accountant.Job-Costing system: The system helps in assigning variable manufacturing cost to variousproducts batches or individual products. This system of costing is mostly used when there is asignificant differences in manufactured good or services to be provided. For implementing thissystem, identification of various types of expenses to different jobs is essential. It producesprofitability report of various jobs that includes overall profit and loss information about theentity (Brandau, Endenich, Trapp and Hoffjan, 2013).All these accounting systems can be used in Coffee Pound store, as it has variousfunctions. Inventory management can be used in managing the incoming and outgoing ofinventory, managing fresh and old stock by using various methods like FIFO or LIFO, etc. Cost2
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