(Solved) Management Accounting : Assignment
Added on 2020-10-05
22 Pages4604 Words349 Views
Finance
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MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3Scenario 1-(LO 1)............................................................................................................................3Management accounting system.................................................................................................3Methods which are use by the company for management accounting reports............................6Scenario-2 (LO 2)............................................................................................................................7Scenario-3(LO3).......................................................................................................................................................10Scenario-4 (LO 4)..........................................................................................................................13CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18
INTRODUCTIONManagement accounting system is the profession which includes the partnering indecision making, planning and performance management systems and also provide expertise inthe financial reporting.The present study is based on Excite entertainment Ltd. which is the UK based companyand operates in the leisure and entertainment industry and a non government company.Furthermore, the report Wil explain abut the different management accounting systemand planning tools of the company . In addition to this, analysis of income statement throughdifferent methods will also be explain in the report. The report than further explains the differenttools which helps to solve financial problemsScenario 1-(LO 1)Management accounting systemManagerial accounting is the internal system of the business which focuses on measuringand evaluating the processes for the management of the organisation. management accountingplays essential role in managerial function of the organisation(Quattrone, 2016). This process includes basic function which consist of planning, organising, controllingand decision making which help the to make important and effective decision which ultimatelyleads the organisation on right path of growth and developing. effective performing themanagement accounting will help the business in measuring their actual performance bycomparing with the budgets so that corrective measures can be taken in order to eliminate thedisruptions(Otley, 2016). By applying budget and planning organ' is ale to manage the business activitieseffectively and efficiently. accounting is responsible for leading the business to make qualitydecisions to control and monitor the business activities in addition with the financial security ofthe company and handling all the financial matters which leads to drive the business in overalland efficient management.Management accounting is done by the management accountants who are the riskmangers, planners, budgeters, decision makers and strategists(Malmi, 2016). They preform thetask activities which help the business staff including board of directors, owners and managers inmaking decisions for the effective growth of the organisation.
This accounting helps the business in preparing the internal reports by effectivelyanalysing and evaluating costs and operations so to aid the managers dan other members of theorganisation in making the effective decisions which ultimately helps in achievement of theorganisational goal.Financial accounting is the accounting which perform the activity of tracking thebusiness's financial transactions by using standard guidelines(Malmi, 2016). In this ca countingall the fanciable transactions are recorded, analyse, summarized and present in the form of thefinancial report and financial statements which includes income stalemates, balance sheet andcash flow. These statements will help to determine the financial position and financialperformance of the business. the main function of this accounting is to preparing of the finalreports which provide information about the performance of firm to the external parties such ascreditors, government, customers, creditors, tax authorities.Management accounting helps inproviding the information to the peoplewithintheorganisation(Maas,Schaltegger andCrutzen, 2016)management accounting is notmandatory or required by the law.Accounting is completely depends onthe choice of organisation in order tomanage the business transaction' andactivities.This accounting consist of particularproduct or cost centresreports can be generate by the businessat any pint of time such as on dailybasis, weekly or monthly. Reports are considered to be theforward looking and containing theforecasting value for those who areFinancial accounting is the accountingwhich helps to provide the informationto the external parties such as creditors,investors , etc.this accounting is mandatory orrequired by law to perform so that theycan generate the information of thecompanies through their final reports.This consist with overall organisationfinancial reports are created for periodgenerally financial year(Kaplan andAtkinson, 2015).these reports are based on the historicdata and have predictive value to thosewho are planning to invest in thebusiness by taking effective financialdecisions to attract higher profit.This involve the preparation of thefinancial reports which includes the
within the organisation(Gunarathne.and Lee, 2015).It involve preparing of the reportswhich are primarily confidential andused by the top management of thecompany and these reports andprepared by using the statistical methodand scientific methods so that they canarrive ta certain monetary value whichis further use for making decision.These reports generally includes:Sales forecasting reports, mergerreports, feasibility studies, budgetanalysis , comparative analysis.basic requirements of profitability,stability, solvency and liquidity. Thesereports are generally help the internaland external users to generate theinformation regarding the company;sfinancial position which help the intheir further decision making(Hopperand Bui 2016).Cost accounting system is framework which is used by Excite entertainment Ltd. toestimate and analyse the cost of their products for ascertaining the profitability analysis ,inventory valuation and controlling and monitoring the costs. For profitable operation by thecompany, ascertaining the accurate statistical function of the organisation. Cost accounting isalso called as product costing system and costing system(Gunarathne. and Lee, 2015). There arebasally many types of cost which is required to estimate by the company and some of them are :Direct costs is the cost which is directly associated with the particular goods andservices .these cost are directly countable for the cost object . Some direct costs are directmaterial, direct labour, wages, manufacturing supplies, commission, etc.standard costing is the estimated cost or performing the operational activities orproducing the goods and services under the normal conditions (Englund and Gerdin,2018) .These costs are generally used as target costs or treated as base for comparison of theactual cost and also developed from the historical data. The main advantages of this type ofcosting are it can be effectively used for product costing, for controlling the costs of operationsand for decision making.
Inventory management system is the software system which helps in tracking theinventory levels, sales, deliveries, orders. These are also used in the manufacturing industries tocreate the woe order, bills of the materials and also the other production related documents. Thiscosting helps the companies across the supply chain in making better decisions and ore money.The main benefits of employing inventory management system in a business are cost savings,enhancement in the efficiency in the operations of company, better management of warehouse,updated data, privacy and security of data and useful insights into trends related to theconsumption of inventory by an organisation. There are different methods of inventorymanagement and they are:FIFO- it means the management system which stands for the first in first out that means thegoods which are first purchased and products are also to sold first. This method helps thecompany to assume the inventory which is purchased first is need to sold first and the newinventory kept as unsold.LIFO – it means last in first out that is meant that valuing the cost of the goods sold at theending inventory. It is the method where the product which is the most recent is recorded as soldfirst.Just in time-is the method is considered to be the company’s strategy which help the company inincreasing their efficiency and decreasing the waste by receiving the goods as and when neededonly in te entire production process which helps to reduce the inventory costs..Job costing system is system of assigning manufacturing costs of an individual unit ofoutput that is it is the system which is used in the company when various item which areproduces are different from each other and required to accumulate the significant costindividually( Coad, Jack and Kholeif, 2015). The main aim of job costing is to ascertain thecosts and profit and loss on each of the job performed its is also done to ascertain the mostprofitable jobs . The benefit of job costing is that, it provides a basis for forecasting the costs of similarjobs which are to be done in the future. It facilitates the identification of spoilage and defectivework related to a specific job and responsibility can be fixed on a particular department or anindividual for the same. These are most suitable for cost price contracts in which the price of thecontract is strictly determined on the basis of costs (Job Costing: Meaning, Advantages andLimitations, 2019).
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