Management Accounting Assignment : Every joy enterprise

Management and
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1...........................................................................................................................................1
a) Essential requirement of different management accounting system..................................1
b) Various Types of Management Accounting Reporting.....................................................4
TASK 2............................................................................................................................................5
c) Calculate costs using appropriate techniques of cost analysis to prepare an income statement
using marginal and absorption costs................................................................................................5
TASK 3...........................................................................................................................................7
d) Advantages and Disadvantages of different types of planning tools used for budgetary
control:....................................................................................................................................7
TASK4...........................................................................................................................................10
e) Management Accounting System in Respond to Financial Problems:............................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting involve process of preparing account and management reports
that offer managers financial information required by them to make short term decisions. A
business organisation whether small, medium or large, management accounting is known as one
of the most significant part of every firm. This ensure effective execution of business activities
with optimum utilisation of financial resource. Collection and analysis of financial data make the
manager aware about financial position of company and help in plan future activities (Bouten
and Hoozée, 2013). Every joy enterprise which operate on leisure and entertainment sector is
consider under this report. Every joy is consulting Deloitte firm to write a manual for the
department of management accounting. Different type of management accounting system with
its essential requirements and various methods that can be use by company for accounting
reporting is all given in this. Further, different type of cost including marginal and absorption
costing with different planning tools is also included in given report. In addition to this,
adaptation of management accounting system by different organisations to deal with financial
problems is also mentioned under this.
TASK 1
a) Essential requirement of different management accounting system
Management accounting refers to the process of presenting financial and accounting
information that is used to formulate policies and future activities to be adopted by management.
This involve analysing internal business operations and cost in order to prepare accounts which
indicate the financial position of company (Management Accounting, 2018).
On the other hand, financial accounting refers to the process of summarizing, recording
and reporting the financial transactions resulting from various operations performed by company
throughout the year (Chenhall and Moers, 2015). These transactions are summarized for
preparation of financial statements like balance sheet, income statement and cash flow statement.
Difference between management and financial accounting:-
Basis of comparison Management accounting Financial accounting
Objective This concept is generally used
with the objective of providing
It is generally used to collect
financial information which is
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assistance in planning and
decision making process by
providing information over
various essential matters
summarized to prepare financial
statements.
Time frame These reports are prepared
according to the requirement of
organisation
Financial statements are generally
prepared at the end of accounting
year that is one year.
User This information is used by only
internal management.
Information is used by both internal
as well as external parties.
Role of management accounting:
 Management role play a crucial role in forecasting the events related to finance and
economy that support in making future plans.
 Management accounting analyses accounts and financial information to prepare report
such as standard costs, budgets, interpretation, cash & fund flow analysis which help in
controlling and managing the finance used by company.
 It also work toward providing recommendation related to the funding and resource
allocation by providing financial data of the company. This help management in
assessing the financial requirement of the company that further support in taking decision
related to raising of fund.
Thus, it is very essential for Ever Joy enterprise to apply and integrate management
accounting system to determine the efficiency of their operations, Budget they have to perform
various activities and amount to be raise in order to fulfil future needs. It also help in formulating
policies that further support in performing future actions toward the achievement of
organisational goals (Hiebl, 2014). Therefore, management accounting will also help Ever Joy
Enterprise in maintaining their better position in marketplace by taking corrective and
informative actions. Because all the financial information is first assess and then use to take
future actions so it help in reducing the chance of error and financial losses. Further there are
certain principals of management accounting which are as given below:
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