Management Accounting and its Role in Decision Making

Management Accounting

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
LO 1............................................................................................................................................................3
(a) Management accounting system and its requirements........................................................................3
Various methods for accounting management reports.............................................................................5
(b) Management accounting system and its report support in making decision.......................................6
LO 3............................................................................................................................................................6
(C) Cash Budget of six months................................................................................................................6
(d) Use of cash budget and its application for preparing and forecasting the financial position..............7
LO 4..........................................................................................................................................................10
(e) Management accounting system deal with financial problem..........................................................10
(F) Critical evaluation of the financial position based on forecasted cash budget..................................12
CONCLUSION.........................................................................................................................................12
REFERENCES..........................................................................................................................................13

INTRODUCTION
Management Accounting relates to the use of tools and techniques and techniques for the
efficient use of which provide, information and data in order to attempt for the members of the
company to make the correct decision for the corporation (Dahlan, 2019). It can help a great deal
to increase the total efficiency, performance and effectiveness of an organization that leads to
even more income through increased sales. As a consequence, the amount of income can be
quickly increased and a competitive advantage can be gained on the competition on the sector. In
order to achieve so, it must be done correctly such that the full gain can be extracted from it.
Management Accountants are very useful to the firm. This report is focused on Lets Grow, a UK
manufacturing firm. Specific analysis of the knowledge of management accounting practices, the
variety of statistical kinds of methodologies and the use of various types of planning tools will be
carried out in this assignment. In fact, a summary of the forms in which businesses may use it to
address their financial challenges would be addressed as part of this initiative.
MAIN BODY
LO 1
(a) Management accounting system and its requirements
The information management system in all businesses is useful as it encourages business
to act effectively by providing financial data on domestic operations. In aims to discuss the
program manager, extensive data on established processes is needed in order to monitor the costs
and make sensible choices. Lets Grow Ltd uses the accounting software framework to make the
correct investment decisions. In fact, it effectively manages finance by implementing a
management accounting system that increases profitability. The essential requirements of the
financial management framework are set out below-
Inventory management system- This system is very applicable to all companies that are trying
to manage correct stock records and to track them properly (Swalih, 2019). It is mainly used for
tracking facilities and goods in the manufacturing field and throughout the supply chain. Lets

grow Ltd’s boss used this method to classify inventories with the assistance of engaging the
supply chain or commercial operations. From production to distribution, inventory storage,
refining and delivery, it has been used to mask improved productivity.
Essential requirement- The necessity of this system to obtain all data on stock management and
tracking with both the help of this system.
Benefits: The system is beneficial for operating teams to gain organizational productivity, which
produces optimum performance by reducing expenses and maximizing sales and earnings. For
starters, by introducing this approach, Lets grow limited gains from the accomplishment of the
inventory control goals and targets. In addition, by utilizing this method, the industry as a whole
can be optimized.
Price optimization system- In the growing industry, the pricing structure is the crucial factor
that influences which technique would be used to determine the cost of products and facilities. In
order to optimize efficiency, systematic analysis has been used to determine whether an
organization should adopt the price structure. In addition, this approach helps to provide
guidance for setting prices that are appropriate to both company and customers. Like Let's Grow
Ltd use this system and create up evaluation prices since raising compensation that target new
customer and increase profit margins by trying to set nonviolent operating rates.
Essential requirement- In order to attract buyers, this report includes the development of an
appropriate pricing structure for the company and, consequently, the selling on the market.
Benefits: This approach has numerous benefits as it allows the customer to be more competitive
in the industry, to maintain fair market rates and to understand the danger to a company. Like in
let’s grow limited, this program has been used to better assess buying trends and to assign
preference to price ranges.
Cost accounting system- It is a management accounting tool used to evaluate complete and
accurate costs across the entire activities of the institution (Jiasheng, 2019). It involves the
process of registering, evaluating, identifying, summarizing and distributing costs for the
monitoring of unnecessary costs. In fact, this can be used to discover the real cost of a wide
variety of facilities and products. Like Lets Grow Ltd, this technique has been used to compare