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Management Accounting Assignment - Sollatek

   

Added on  2020-11-12

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MANAGEMENTACCOUNTING
Management Accounting Assignment - Sollatek_1

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................2LO1..................................................................................................................................................2P1. Explaining management accounting and essential requirements of different types of ........2management accounting systems................................................................................................2P2. Explaining different methods used for management accounting reporting..........................4M1. Evaluating the benefits of management accounting system and their application within an.....................................................................................................................................................5organisational context.................................................................................................................5D1.Critically evaluating management accounting system and management accountingreporting .....................................................................................................................................5is integrated within organisational processes..............................................................................5LO3..................................................................................................................................................6P4. The advantages and disadvantages of various planning tools used for budgetary control...6M3. Uses and application of different planning tools.................................................................8LO4..................................................................................................................................................8P5&M4. Management accounting systems used to respond to financial problems and ............8organisation can lead to sustainable success...............................................................................8CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
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INTRODUCTIONManagement accounting is a term which is concerned with planning, policy formulation andperformance management system. It provides expertise knowledge for preparing themanagement accounts, business strategy and financial report to provide accurate, fair and timelyinformation necessary for decision-making. It also helps in interpreting & communicatinginformation to company's stakeholders and also assist management in the formulation andimplementation of an organization's strategy. The present report is based on Sollatek whichmanufactures and offers electronic products to the customers. Management Accounting reportinghas been explained which contains material information about the company's financial positionwhich helps in formulating business plans & strategies, preparing budgets, measuringperformance, decision-making and estimating future profits and cost to be incurred. Furthermore,the company has used different management accounting tools in solving its financial problemand thereby achieve its organisational goal.MAIN BODYLO1.P1. Explaining management accounting and essential requirements of different types of management accounting systems.Management accounting is defined as a tool or technique which emphasizes on factorssuch as evaluating, assessing, monitoring, measuring and communicating the financial, nonmonetary and managerial information to the employees for the betterment of organisation growthand success (McWatters and Zimmerman, 2015). It helps in decision-making process,formulating business strategies & plans which is considered essential for achievingorganisational goals and objectives effectively. It emphasises on factors such as planning,controlling and providing information to the management for internal decision-making. Themanagement accounting process is related with the preparation of management reports andaccounts which to make day-to-day and short-term business related decisions (McWatters, andZimmerman, 2015). There are different types of management accounting system whichcan be used by Sollatek suchvas:1
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Cost Accounting System – Such system is used by Sollatek for making estimates, helpsin analyses product cost for ascertaining the profit levels, identifying cost incurred in carrying onbusiness activities i.e. for manufacturing a product, inventory valuation and controlling cost(Jermias, Gani and Juliana, 2018). It is of two types:Process Costing Method - It is a cost accounting system which is used for ascertainingseparately the cost incurred associated with operating and manufacturing processes forevery wok process by considering the products of similar nature. The method forcalculating process costing is done by making total of all cost amount and divided bytotal output for ascertaining cost per unit.Job order Costing Method - It is a process similar to process costing method whichascertains the operating and manufacturing costs incurred separately for every wok job.This cost accounting method is used for costing the unique products and also helpscustomers in ascertaining exact cost incurred for producing a product (Jermias, Gani andJuliana, 2018).Price optimisation system - This method helps company in analysing that how customerwill behave towards different price changes with different channels of its products and services.It studies the customer response towards different price (McWatters and Zimmerman, 2015).This method helps Sollatek in determining the best price for its product and services which canbe charged from its customers and which will thus maximize revenue and profit of the businessorganisation thereby is able to achieve its goal and objectives effectively (Jermias, Gani andJuliana, 2018). It determines the future estimated profit of the company by studying changes indemand forces with respect to price changes. It considers three factors as price elements:1. Strategy of pricing a product.2. Product value for both buyer and seller, and3. Strategies and procedures used for increasing profits level.Benefits of management accounting system to Sollatek Company:1.Cost Accounting System – This system helps Sollatek Company in emphasizing onfactors such as Cost savings, increasing profits and attainment of organisational goals &objectives by minimizing cost of production and attaining customer satisfaction. It hasalso helped the company in reducing environmental impact by lower energy and waterconsumption for business processes. It helps the company in ascertaining the operating2
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