Advantages & Disadvantages of Management Accounting Assignment
Added on 2021-01-12
15 Pages4647 Words87 Views
MANAGEMENTACCOUNTING
ContentsINTRODUCTION...........................................................................................................................1MAIN BODY..................................................................................................................................1P1. Explain management accounting and the essential requirements of managementaccounting system........................................................................................................................1P2. Different method used for management accounting reporting..............................................2P3 Calculation of marginal and absorption costing.....................................................................4P4. Advantages and disadvantages of different types of planning tools used in budgetarycontrol..........................................................................................................................................6P5 Effectiveness of different management accounting system to respond to financial problems.....................................................................................................................................................7CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONManagement accounting can be defined as process of presenting financial information ofcompany and measuring performance of enterprise. It supports business in formulating adequatepolicies in order to manage day to day operations significantly (Oboh and Ajibolade, 2017).Firms have to implement correct system and have to follow internationally accepted principles inorder to prepare or manage reports well. That assists in maximising profit of organisation to greatextent. Present study is based on A &R Cambridge Ltd (Arcam); it is the British manufacturerthat manufactures hi—fi equipment’s such as Blu- ray player, rCube etc. Current assignment willexplain different types of management accounting system. Furthermore, it will calculatemarginal and absorption cost. Study will illustrate advantage and disadvantage of different typesof planning tools in budgetary control. In addition, report will explain effectiveness ofmanagement accounting system in order to deal with financial problems of business.MAIN BODYP1. Explain management accounting and the essential requirements of management accountingsystem Management accounting basically means the provision of the financial data a giving advice tothe company. Also the institute of cost and management accounting London has given thedefinition of management accounting as it is the process or application of the knowledge whichis professional that is required as the skill in the preparation of accounting information in such away that it can support management in the process of formulation of policies, rules andregulations in the planning and control of the operations of the undertakings. Managementaccounting is also the process that involves techniques and concepts which can be used by A&RCambridge Ltd efficient planning related to the business (Luft, 2016). It also assists theorganization in choosing among the best alternatives and also control the business actionsthrough evaluation and interpretation of performances. A&R Cambridge Ltd can makes use ofmanagement accounting g system for internal purposes, that can also assist them in managingbusiness operations effectively. This process can also help the firm in making the internaldecisions and achieving the business objectives. Essential requirements of management accounting system There are various types of management accounting system and each one of them have essentialrequirements. A&R Cambridge Ltd. Needs to adhere to it. It includes the following:1
Cost accounting system- Cost accounting system is basically a framework that can be occupiedby A&R Cambridge Ltd. In calculating the exact cost of their products and services for theanalysis of profitability, inventory valuation and cost controlling. Essential Requirements- The essential requirement for the cost accounting system used by thebusiness is that the procedure must be simple and practical and capable enough to meet out theneeds and demands of the business carried out by the A&R Cambridge Ltd. The accountingsystem must be flexible enough so that it can be changed by the company according to the timeand situation. The system must be framed in such a way that it can give facts and figures that canbe important for evaluating the performance of firm by comparing it with the past figures.Inventory management system- An inventory management system in an organization can bedefined as the integration of technology (hardware and software) that can assist A&R CambridgeLtd. in planning and controlling the inventory stock of the company. It is a process and methodthat can be used by the businesses to monitor and maintain the goods and services that is kept bythe company. This process makes sure that the assets, raw materials and finished products areready to be sent to the vendors or end consumers. Essential Requirements- The essential requirement for inventory management system is thatthe cooperation from various departments is required to manage this software. A&R CambridgeLtd. by installing this software have the advantage of transferring the products to the place easilywhere it is being required. Transfer management also assist organization in tracking inventorywhen it is being moved from one place to another. It also facilitates the overall transfer process. Job Costing system- Job cost system can be defined as the system that can be used by A&RCambridge Ltd. for calculating manufacturing cost. The firm can also assign and accumulate it.This method is basically used by the organization when the various goods which is delivered bycompany is different from each other and has the different significant cost. Essential Requirements- The essential requirement for the Job Costing system is that A&RCambridge Ltd. must have the effective production system. Company requires proper methods ofabsorption related to overheads. This costing system can also help the organization in creating adifference between the profitable and unprofitable jobs. P2. Different method used for management accounting reporting Management accounting reporting is the internal report that can be prepared by the A&R Ltd. forinternal users. This report assists firm in making decisions related to the budgeting. Management2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Management Accounting - Excite Entertainment Ltdlg...
|18
|4921
|480
UNIT 5- Management Accounting Assignment - B.L. Holding Limitedlg...
|22
|6727
|148
Management Accounting in T.M.A Engineering Ltd : Reportlg...
|18
|5042
|149
Management Accounting Systems and Techniques Assignment - Solutionlg...
|19
|5435
|172
Management Accounting: Types, Reporting, and Budgetary Controllg...
|18
|4451
|27
Management Accounting INTRODUCTION 4 P2 Different Methods for Management Accounting Reporting In Advance Construction Group Ltd12 TASK 414 P5 Cost and Absorption Techniqueslg...
|18
|5947
|216