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P1 Management Accounting

   

Added on  2020-10-22

17 Pages4796 Words246 Views
ManagementAccounting

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1 ...........................................................................................................................................3P1 Management accounting and it's different types of system .............................................3P2 Explain different methods of management accounting reporting.....................................4M1 Evaluation of benefits of various management accounting systems...............................6D1 Management accounting system and management accounting reporting are integrated withorganisation processes............................................................................................................6TASK 2............................................................................................................................................7P3 .Appropriate techniques of cost analysis to prepare an income statement........................7M2 Management accounting techniques and financial reporting documents......................10D2 Financial reports which are applied to interpret many business activities.....................10TASK 3..........................................................................................................................................10P4 Advantages and disadvantages of different types of planning tools used for budgetarycontrol ..................................................................................................................................10M3 Usage of different planning tools for preparing and forecasting budgets......................12TASK 4..........................................................................................................................................13P5. Organisations are adapting management accounting systems to respond to financialproblems...............................................................................................................................13M4. Management accounting in response to financial problems can lead organisation tosustainable success...............................................................................................................15D3.Various planning tools to resolve financial problems....................................................16CONCLUSION .............................................................................................................................16REFERENCES..............................................................................................................................17INTRODUCTIONCost accounting or managerial accounting is another name of management accounting. isIt is defined as the process of evaluation of business activities and maintaining a cost of financial

records, reports or accounts to enhance the decision making of the managers (Adler, 2013). It isthe transformation of costing and financial data into useful management information within theorganisation. The accounting system is used for making decisions for the organisation. Financialreports and accounts are prepared and used by managers at any time they need it. Managementaccounting is helpful for the internal aspect of business. In following report, the chosen businessentity is Capricorn wealth management limited company and it is analysed the practices andwhole concept of management accounting. This is a UK based small scale company establishedin 2008 and situated in Hammersmith, London. It provides wealth and financial consultancy andadvices to clients. Moreover. They are involved in providing financial services and products,such as loans and products for mortgage. In this present report, includes each and everyinformation which are related to management accounting. The different types of it and benefitsfor the company are evaluated. The later part of report includes the different managerial reportsand accounting techniques. The various advantages and disadvantages of these are discussed. Inthe end, it explains the different ways by which an organisation can handle the financial issuesand implement an effective accounting technique within the organisation. TASK 1 P1 Management accounting and it's different types of system It is based on accounting system which analysing a internal management of business andmaking effective decision regarding managing managerial activities in an organisation (Arroyo,2012). Along with this, it focuses on analysing the financial condition of the business which aidleaders and mangers to run their business more effectively and efficiently. The different facets ofaccounting that are managed are constraints, margins, trends, capital budgeting, valuation,product costing and forecasting. This is an accounting system which helps in preparing businessreports and accounts. And it is prepared an organisation on weekly or monthly basis for internalaudiences like department managers and officers. These help in evaluating the available cash,revenue generated, raw material and inventory, debts,etc. It also includes variance analysis,charts and other graphical representations. The different kinds of accounting system arediscussed below-Cost accounting system- This is a kind of accounting system which helps in evaluatingall costs including variable cost, fixed cost, etc. It is essential for organisation to determine the

cost of products or services. Along with this, estimating cost helps an organisation to analysetheir profit and loss on their product and services(Bennett and James, 2017). In order to,Capricorn Wealth Limited company, use cost accounting system to analyse the costdifferentiation on its products and services. Price optimisation system- This system gives a framework for determination of price ofservices and products. This is useful for customers as well as company as they can estimate theproduct cost. This system helps in evaluating the behaviour of customer on various pricing level.This system provides factors on which the company sets the price. The company Capricornwealth management use price optimisation system for setting a price at different level. Job costing system-It is an accounting system which helps in calculating a total costincurred in providing product and services. Along with this, it assign cost to each and everysingle unit of product or service. This is beneficial for the organisations as it giving multipleservices and products (Chenhall and Moers, 2015). In order to chosen company i.e., Capricornwealth management Limited is associated with providing different financial services andproducts to employees. Along with this, job costing system is essential for to know the costincurred in different goods and services. Inventory management system-It is a very important aspect of accounting system inwhich it concerned with tracking status of products and services. Inventory management systemis helpful in checking the availability of services and goods. Along with this, it is applied inCapricorn Wealth Management Limited organisation to track it's various goods and services. Thefinancial status of products and services is checked by using this accounting system. P2 Explain different methods of management accounting reportingAccounting reports are compilation of financial data received from the accountingrecords of business. These may include custom made report, briefs that are made for particularpurpose like analysis of sales or profitability of product. The accounting reports are important forinternal management of business. The mangers of organisation use these reports for makingeffective decisions, plans and strategies. The various accounting reports of Capricorn Wealthmanagement Limited for making effective decisions are discussed below-Performance reports- It is defined as detailed analysis that evaluates the success of anyactivity over a particular time frame. This report is generated for employees and business andthis helps management to analyse the probability of success of product or project. It measures the

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