Management Accounting.

Management
Accounting

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P.1. What do you mean by management accounting and explain the requirements of various
types of management accounting system ?..................................................................................3
P.2. For the purpose of management accounting reporting, different methods are used explain?
.....................................................................................................................................................5
M.1. Benefits of management accounting system & their applications are evaluated in context
to Prime Furniture?......................................................................................................................6
D.1. Evaluate how management accounting system and reporting is integrated?.......................7
TASK 2............................................................................................................................................7
P.3. By using most suitable techniques of cost analysis, cost is to be calculated and by taking
helps of absorption and marginal costing, prepare statement of income?...................................7
M.2. Application of range of MA techniques accurately and produce suitable financial
reporting documents?...................................................................................................................8
D.2. Produce financial reports which apply and interpret data accurately for wide range of
business activity?.........................................................................................................................9
TASK 3............................................................................................................................................9
P4 Advantages and disadvantages of using planning tools for budgetary controlling................9
M3 Analysis of use of different planning tools and their application for preparing budgets and
forecasts.....................................................................................................................................11
M.3. Analyse the use of planning and their applications for the purpose of preparation and to
forecasting budget?....................................................................................................................11
Task 4.............................................................................................................................................12
P5 Response of management accounting systems to financial problems..................................12
M4 Analysis of response of management accounting to financial problems lead to sustainable
success.......................................................................................................................................14
D3 Evaluation of responses of planning tools to appropriately solve financial problems........14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management Accounting is the accounting branch in which accounting is presented or
provided to management team in appropriate or systematic manner so it become easy for them to
perform the functions related to planning, organising, staffing, directing, controlling , decision
making so that smoothly the business can run. The organisation which was chosen in this
assignment is Prime Furniture. It is the brand that deals in various latest designs of furniture at
affordable prices. There are so many shops established in different locations of country United
Kingdom (Alyousef and Mickan, 2016). The topics that are included in respective project of MA
are definition of management accounting and their system. Application of wide range of
techniques of management accounting. Describe in detail the use of planning tools that are most
commonly used in management accounting. Compare different ways where company use the
tool management accounting to handle various problems that are relates to finance.
TASK 1
P.1. What do you mean by management accounting and explain the requirements of various
types of management accounting system ?
Management Accounting- It includes two words first one is management and the other is
accounting. It is based on accounts that tends to raise managerial efficiency through providing all
relevant information and data that are important for every manager s in effective decision
making. To assist the management by supplying the information which is necessary for
accounting. Their scope is broad as cost accounting, statistic and financial accounting are linked
to the concept management accounting. The future based transactions are the main concern of it.
Management Accounting system- As it represents the internal confidential reports as these
provide support for top managers to take the decision which is effective.
Kinds of management accounting system
 Prise optimisation: It is also consider as important factor when furniture practice develops
pricing strategies. Thus online price optimisation technique need competitive price
comparison to take best decisions. There is constantly variation in prices are there in the
world of digital environment so it necessary for prime furniture to search the point where
best sales ratios are to be achieved with competitive prices that gives several benefits
continuously to retailers (Bedford and Speklé, 2018).

 Cost Accounting system: It is most suitable method to adopt by all manufacturing concern
to calculate cost. Apportionment of cost is also done in this system on the basis of three
elements such as fixed, variable and overheads cost. For Prime furniture it is necessary to
calculate cost of different products and maintain records so that their managers fix the
prices of items with including their profit margin.
 Stock management: It is a computer based system that is to be use in the organisation to
track orders, deliveries, sales etc. It is most common system that are adopted by furniture
industry to make records of inventory. With the help of it Furniture practice eliminates
the issues of under and over inventory. Highest in first out policy is adopted by famous
furniture brands. Due to availability of sufficient stock with latest designs in their stores
tends to increase value of company.
Comparison of MA and FA
Basis Management accounting Financial accounting
Define It is a system which is
providing relevant and useful
details to the management
which directs them to
formulate an effective plans
and policies.
It is a system which mainly
focuses on preparing financial
statements includes profit and
loss account, balance sheet etc.
so as to ensure about their
existing financial position in
market.
Parties involve Internal parties such as
managers and management
who have authority to make
plan and monitor the business
activities.
External parties such as
investors, financial institutions
etc. who have authority to
make financial decision.
Time focus Future perspective Historical perspective