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Management Accounting in Oshodi Plc

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Added on  2021-02-21

Management Accounting in Oshodi Plc

   Added on 2021-02-21

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MANAGEMENTACCOUNTING
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Table of Content
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INTRODUCTIONManagement accounting is described as a procedure to formulate accounts andmanagement reports which involves factual information so that management in an organisationcan take appropriate decisions. By using management accounting, an organisation can formulateincome statements and reports on weekly or monthly basis. This helps in accomplishingorganisational work in an organised way (Adler, 2013). This assignment is based on Oshodi Plcwhich is a UK based manufacturing organisation, specialising in producing JOJO fruit juice.This report is covering about management accounting and usage of various managementaccounting systems. Various type of managerial reports and their integrated work withmanagement systems is discussed. By taking help of different costs like absorption cost,marginal cost etc., budget and financial statements are prepared. Beside this, different planningtool are mentioned to forecast budget and related aspects. At last, various managementaccounting tools are used to solve the problems which are concerned with finance. TASK 1P1 Concept of management accounting and the requirement of several kind of managementrelated accounting systemsManagement accounting is defined to the way of identifying business and operationalexpenses so that financial reports of a specific company can be formulated in a systematic way.This will helps the business owner of company to take appropriate decisions so that highbusiness advantage can be gained. By using this tactics, revenues and profit margins of companywill be enhanced due to transparency in accounts and finance of company. In case of Oshodi Plc,by using management accounting, company can prepare and income statements in a proper way.In relation to this, there are various accounting systems for management that can be utilised byconcerned company so that their business operations can be performed appropriately (Aiken, Luand Ji, 2013). Below are mentioned some management accounting system that can be used byOshodi Plc so that their production process of JOJO fruit juice can be improved and high profitscan be earned:Cost accounting system: It is stated as the process of tracking and transformation of rawmaterial or resources into finished products. This system of management accounting iswidely used by the manufacturers to manage and record their production activities. Due1
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to this, flow of stock is acknowledged through various production levels. In context withthe scenario of Oshodi Plc, manager of firm can use this method to manage and monitorthe records of raw materials which is required in preparation of JOJO fruit drink likefluids, flavours, fruits etc. This specific accounting system is helpful for company indetermining different costs which are incurred while producing goods.Inventory management system: It is a management system where records related withstocks and inventory which is stored in storages or warehouses are mentioned. Managingof inventory is essential for the manager and employees of a company so that need ofparticular inventory or resources can be fulfilled in a timely manner. In case of OshodiPlc, manager of the organisation is needed to maintain the records of inventory in aneffective manner so that stock which is required to be purchase, sold or stored for futureuse can be acknowledge in a proper manner. Beside this, by using this account system,loopholes in inventory management can be resolved desirably. Job costing system: This system of management accounting includes the procedure ofanalysing expenses which take place while producing services or goods. In general, it is aprocedure that categorise the production and manufacturing expenses in overhead, labourand material cost so that actual cost can be acknowledge in a clear manner. In contextwith Oshodi Plc, firm has a separate department which is responsible for managing theexpenses of concerned organisation (Booth, 2018). Price Optimisation system: This is a specialised system of management accountingwhich is utilised to keep standard prices of products which are manufactured by acompany. With the help of this system, prices for various services or products offered bya company can be decided. In context with the chosen company i.e. Oshodi Plc, by usingthis system, costs which is associated with different beverages or materials whileproducing JOJO fruit drink is identified easily. P2 Managerial account reporting is stated as a report that represent information and factsabout business activities and their operations. Also, this report can be prepared on weekly,monthly, quarterly or annual basis as per the needs of company. By this availability of funds andfinance is acknowledge in a proper manner. These accounting reports are used by thosecompanies which formulate and implement their strategies as per their the results of reports. By2
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