Management Accounting: Types, Methods, and Tools

Management Accounting

Executive summary
Accounting management mainly focuses on the function of the internal cost for any of the
organisational process, which helps in the business, individual or an organisation. This processes
helps in taking a proper decision which is connected to the investment, operation, and as well as
productions in the competitive market. All the organisation require accounting management to
know the ability of the budget of the organisation as well as the cost of the performance and then
allocating some of the funds as per the investment, sales as well as productions. In order to track
specific selected ratios on daily basis, the organisation has the capability to maintain a accurate
perception of the efficiency and effectiveness of its operations. Even though the industry related
to the hospitality is exciting and dynamic, it faces competitive challenges such as, reliance on
discretionary income, low profitability, capital intensive, and labor intensive and fluctuating
sales volume
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Table of Contents
Introduction.................................................................................................................................. 4
Task 1.......................................................................................................................................... 4
P1. Explanation of accounting management and need of various types of management
accounting systems.................................................................................................................. 4
P2. Explanation of various methods applied for management accounting reporting that can
apply for the chosen scenario..................................................................................................6
P3. Explanation the difference between the two management accounting techniques...........12
Task 3........................................................................................................................................ 13
P4 Merits and demerits of planning tools..............................................................................13
P5 Methods used by organisation for resolving financial problems......................................16
Conclusion:................................................................................................................................ 18
References................................................................................................................................ 19
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Introduction
Management accounting refers to the process where the accounting data are analysed as well as
interpreted through cost accounting. It helps a firm to take control over their decision making and
policies. Management accounting is solely based upon cost and financial accounting. An
organisation like crossroads garage tries to adopt various tools for analysing their costs in order
to assess financial risks. In UK, Crossroads Garage is a leading car manufacturing company. The
company is known for their luxurious collection of cars. This study is going to deal with the
types of management accounting procedures that assist an management accounting officer to
manage their costs. The study is also going to discuss about the methods that are adopted by a
manager while maintaining accounts. A number of tools as well as techniques are used for taking
control over the capital flow of a small organisation. It can be said that an organisation like
crossroad garage Ltd need to ensure success of their business by relying upon a an effective
management accounting system. This study is trying to assess the methods and tools for
resolving financial problems.
Task 1
P1. Explanation of accounting management and need of various types of management
accounting systems
There are various different methods of the accounting management.
Decision-making
The requirement for making a decision occurs in Green core because a manager suffered with an
issue and attentive study of action is present. In order to decide a particular option the manager
will require all the information, which is appropriate to his decision; and he needs to have some
ideas based on which he can choose the best plan. According to Renz (2016), some important
features that are, affecting the decision may not represent in economic value. Hence, the manager
needs to make standard judgments, a decision, which is ‘quantitative’. On the other side, it is
possible when the various relationships and factors, among them, maintained. .Brief distinction
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