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P3: Calculate costs using appropriate techniques of cost analysis

   

Added on  2021-02-19

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ManagementAccounting1

INTRODUCTION ..........................................................................................................................3TASK 1............................................................................................................................................3P1 management accounting and give the essential requirements of different types of...............3management accounting systems...............................................................................................3P2: Explain different methods used for management accounting reporting...............................5TASK 2............................................................................................................................................6P3: Calculate costs using appropriate techniques of cost analysis..............................................6P4. Advantages and disadvantages of different types of planning tools.....................................9P5: Compare how organizations are adapting management accounting systems to respond to...................................................................................................................................................13Financial problems...................................................................................................................13CONCLUSION .............................................................................................................................15REFERENCES..............................................................................................................................162

INTRODUCTION In business context, the concepts of gathering, analysing, posting, measuring andevaluating internal financial information into useful accounts is knows as managementaccounting (Aksoylu and Aykan, 2013). Cost accounting or managerial accounting is asystematic process of presenting meaningful financial data that help internal manager toformulate various policies, take respective decision and control different function and operationwithin company to increase total productivity and profitability. This report is based on Airdri,which is a small hand dryer manufacturing company in UK.In this report, demonstration of various types of management accounting system andreports have been discussed. In addition proper explanation and application of different kind ofaccounting techniques are used to prepare income statements and different types of planning toolthat help in proper planning are discussed. Apart from this the use of management accounting inrespond to various financial problem are defined in this project. TASK 1P1 management accounting and give the essential requirements of different types of management accounting systems.The defined procedure of maintaining accurate management accounts and reports whichprovide authentic and yearly financial information which is essential required by management ofcompany in order to make take day to day important decision is known as managementaccounting (About Management accounting, 2019). It also supports in preparing budgets andprovide strength to planning process to evaluate and measure the company performance during atime frame. The main elements of subjectivity in management accounting are: To make effective use of resources to grow and maximise profit. To create strategies and methods that support to reach the desired goals of company. There are different types of management accounting system that are used by managementof Airdri for different purpose in order to increase the productivity and overall performance.These systems have various crucial functions such as: Provide and modify data: In business context, data is useful information that helps inmaking valuable decision. Different types of system like cost accounting system helps to provideaccurate data related to total cost included in production process (Boiral, 2016). These systems3

also support to make effective modification in total expenses of a specific period so that profitmargin can be increased in future. Serves as a mean of communication: Different systems of management accounting arebeneficial for company as they act as best mean of communication among different departmentwithin an organisation. Inventory management system is used by internal management of Airdrito record total stock available in warehouses and this information is provided to production teamin order to manufacture number of hand dryer in specific time frame. There are various types of management accounting system which are used in Airdri thatprovide authenticity, accuracy and appropriative to the different function. Some of this system isdiscussed underneath: Financial accounting system: This system mainly helps to provide the proper guidelinesto manager of Airdri to prepare final accounts concerning following assets, liabilities andoperating results. All those system that hold the information related to financial records is knownas accounting system such as in Airdri receivable accounts record the traction of customer, salesto record any type of sales done in system etc. these accounts are mapped to take meaningfuldecision (Bromiley and et.al, 2015). Cost accounting system: The manager of Airdri use to asses and measure the exactdetail to total cost that are incurred at each level of producing and selling hand dryer. There aretwo types of costing method such as product costing and activity based costing that are used byrespective company to record the total expenses during a time frame. Product costing is useddetermine the total expenses such as worker wages, purchases and transportation cost etc.pertaining the development of Hand dryer. They use this costing to streamline production cost inorder to maximise profit. Activity based costing helps to ascertain and assigns the total costs tooverheads operation and then assigns these costs to valuable hand dryer. Management accounting system: This system help to use the company financialinformation and prepare authentic reports that are confidentiality used by internal manager ofAirdri. The main advantage of this system is to have proper control within company so thatunprofitable activity can be eliminating from the company (Malinić and Todorović, 2012). Theseinternal reports ease the process of decision making and determine the ways to increase theefficiency and productivity of manufacture process. Manager of company use to analyse the4

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