Management Accounting Assignment Solved - Jupiter PLC

MANAGEMENTMANAGEMENT
ACCOUNTINGACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Explanation regarding the management accounting, its importance and management
accounting systems.................................................................................................................1
Explanation about the methodology and reporting of the management accounting .............2
Describing the advantages of the management accounting system and their applications ...3
Description regarding the management accounting system and management accounting
reporting integrated in organisational processes ...................................................................4
TASK 2............................................................................................................................................4
Quantification of Net profit by using absorption and marginal costing techniques of
Management accounting.........................................................................................................4
TASK 3............................................................................................................................................6
Advantages and disadvantages of different types of planning tools used in budgetary control. 6
Analysation of the different planing tools used for the purpose of preparation and forecasts the
budgets ...................................................................................................................................8
Analysing various budgetary planning tools essential for responding the financial issues. .9
TASK 4............................................................................................................................................9
Comparing the Jupiter PLC with other business entity on the basis of solving issues of
financial problem by budgetary planning tools......................................................................9
Describing the contribution of management accounting in accomplishment of organisational
sustainable success ..............................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Management accounting refers to analysing, summarising and recording the business
operational transactions for the internal entity use in order to ascertain the efficiency and
productivity. Management accounting is also known as the managerial accounting and cost
accounting. Moreover, it is the process of analysing the business costs and operational
transactions for preparing internal financial report, records and for decision making and for
accomplishment of desired objectives(De Harlez and Malagueño, 2016). Overall the
management accounting engages with the preparation of financial and costs data and converting
the data into understandable format or in useful information for the management and top level
authority of the organisation.
This report pertains the knowledge about the management accounting its objectives and
techniques of management accounting, also it pertain the comparison of two entities in context
of management accounting tools and their use in solving the financial issues etc. these all
contexts are examined with the illustrative example of Jupiter PLC for the better understanding
of the management accounting and systems.
TASK 1
Explanation regarding the management accounting, its importance and management accounting
systems
Management accounting is that branch of accounting which is engaged in preparation of
the managerial or business operations reports. It means the management accounting pertain the
knowledge process of preparing and maintaining the statistical and financial reports of the
business operational transactions and mainly engages in the costing of the business operational
transactions. Under the management accounting several techniques are involved for the purpose
of proper analysing, summarising and ascertaining the effectiveness and the efficiency of the
business transactions and also for the purpose of the preparing the managerial or business
performance record in appropriate form of informational report, which is to be communicable for
with the business heads and other users(Watts and McNair-Connolly, 2012). Mainly the
management accounting report provides the information regarding the product, plant, operational
projects. There are different methodology used under the process of management accounting
such as the Inventory management, cost accounting, Job costing system and price optimising
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system etc. used by the business entities like Jupiter PLC for the proper analysation and
ascertainment of these managerial operations in appropriate useful format or report.
There are some objectives of the management accounting system are as follows.
 Beneficial in proper planning and formulation of future policies.
 Facilitates better interpretation of the financial information.
 Ensuring effective controls over the performance.
 Helpful in better coordination.
 Facilitates effective motivation to employees.
 Acts as the solution of the strategic business problems.
 Ensuring the evaluation of effectiveness and efficiency of business policies.
Explanation about the methodology and reporting of the management accounting
The managerial accounting pertain the tasks such as planning, controlling and decision
making, these tasks are performed on the basis of the managerial reports prepared by using the
management accounting techniques and planning tools. These techniques and tools are used by
the organisation like Jupiter PLC in order to proper categorized the business transaction and
costs and revenues occurs from the operations of the business. These all relevant business
information are recorded in several books of managerial reports for the proper evaluation. Some
of the managerial books or reports are as follows.
Cost Reports: The cost reports are used to record all the relevant costs incurred in
operating the business activities. Such as in production various costs are incurred by the business
like labour, fuel, raw materials etc. these costs are record, classified and analyse in costs reports
according to their nature that is fixed or variable(Suomala and Lyly-Yrjänäinen, 2012)
Budget reports: Budgets are set of several costs and revenues which may be incurred or
earned by the future operations of the business entity like Jupiter PLC. The budgets are prepared
on the basis of past recorded data and use for estimating the future projections. Each and every
business entity prepares budgets for the projects.
Execution report: The main purpose of this method is to execute the business operations
which is crucial to identifying the errors existing in it. Reporting by using this method provide a
strength to management to face future uncertain demand and additional expense which may
occur(Welford, 2016).
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