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MANAGEMENT ACCOUNTING INTRODUCTION 3 PART 1. 3 PART 2. 13 CONCLUSIONS 18 INTRODUCTION MA

   

Added on  2021-02-19

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MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................3PART 1............................................................................................................................................3PART 2..........................................................................................................................................13CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18

INTRODUCTIONMA is a field of accounting that is linked with providing internal reports to the internalstakeholders such as managers so that they can make suitable decisions (Mussnig, 2013). Thisis done by this accounting because it contains both kind of reports monetary and non monetaryinformation. Along with it analyse and review all the available information regarding to financialand non financial transaction that occurs during time period. In the project report, TPGprocessing company has been chosen that operates in the manufacture sector. Apart from it theproject report is divided into two parts in which first part includes about various types of MA anddifferent accounting techniques to produce income statements. Under second part, planning toolsof MA and role to overcome from financial issues is mentioned. PART 1.1. Principles of management accounting.The MA consists four types of principles which are broadly accepted by all thecompanies who adopt this field of accounting. Below these principles are mentioned below inbroad sense:Influence- This principle is also known by communication. According to this principle,there should be appropriate communication so that decisions can be taken in an effectivemanner. As well as term management accounting starts and end with the communication.By proper discussion about needs of business, future plans and policies can be createdmore reliable and effective. Such as in the above respective company, TPG processingthey complies this principle of MA and by this their decisions become more effective andsuccessful.Relevance- According to this principle, the information ofMA reports should be valuableas well as reliable as per the financial transaction of companies (Zhang, Uchida, 2013).Same as in above mentioned company, TPG processing company their accountantprovide only those information to their managers which are related to their transactions.Value- According to this principle, the management accounting aligns with thecompany's strategy to to business model and needs a understanding of wide externalenvironment.

Trust- According to this, management accountant are trusted to be responsible,accountable. Due to this, companies can trust on reports of MA. In absence of it, thiscan be difficult to manage the internal environment of the firm. Same as in abovecompany, their accountant is trustable and responsible towards the duties. 2. Role of MA and elements of different systems of management accounting.The MA is important for internal management of businesses. This is why because withthe help of this companies can utilise their available resources in an effective manner. Role of MA:Decision making- It is one of the key role management accounting is that it is beneficialfor long and short term decision-making (Trucco, 2015). It is so because accountant givescrucial information to managers for further decisions. Like in selected company, theymake further decisions as per information provided by management accounting.Controlling- Apart from it, the MA is important in controlling different aspects ofbusinesses. Such as costs and other expenses. Like selected company, MA is important incontrolling of various manufacturing activities.Various kind of MAS:Price optimisation system- This is aligned with fixing of prices of products and services.The elements of this system are price elasticity, tying price etc. As well as it is requiredfor determining price of products and services at a level which is suitable for thecustomers. Along with price optimisation system, includes the framework to identify thereaction of customers on different pricing segments. In selected organisation, they use itwith an aim to fix their manufactured products price at accurate level. In general, thisaccounting system sets the price by adding profitable amount of company in the cost. Inventory management system-This is linked to managing cost and quantity of availableinventories in the warehouses (Ji, 2017). By this companies can take decisions aboutbuying of new inventories as well as for production of new products. The basic elementsof it, are raw material, labour, work in progress goods, working capital etc. Along with itis necessary for meeting the balance between the need and supply of inventories. In the,TPG processing they are using this accounting system and it is helping them in managingthe quantity of raw material for the manufacturing. Along with for taking decisions aboutproduction of new products on basis of available finished goods in the stores.

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