Management Accounting.

Management Accounting

Contents
Contents...........................................................................................................................................3
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Understanding of Management accounting system................................................................4
P2 Methods used for managing accounting reporting.................................................................6
M1 Benefits of adopting management accounting system..........................................................7
D1 Impact of integration of management report and accounting system..................................8
TASK 2............................................................................................................................................8
P3 Revenue statement applying managerial accounting techniques...........................................8
D2 Analysis of data by financial report.....................................................................................12
TASK 3..........................................................................................................................................12
P4 understanding of benefit and drawbacks of managerial planning tools...............................12
M3 Importance of planning tools for budgeting and forecasting process.................................14
TASK 4..........................................................................................................................................15
P5 detail study of how managerial accounting tool apply to solve financial problem..............15
M4 Interpretation of how, in responding to financial problems, management accounting can
lead organizations to sustainable success..................................................................................16
D3 Evaluation of how planning tools for accounting to overcome financial problems to lead
organizations to success.............................................................................................................16
CONCLUSION..............................................................................................................................17
REFRENCES.................................................................................................................................18

INTRODUCTION
Management accounting the word is a combination of 2 different elements of business,
management is a process of influencing workforce to done their work in order to achieve goal of
organization on the other hand accounting is a process of presenting accounting data in effective
way, thus management accounting refers as a systematic framework which provides accounting
information in an effective which help in formulating polices, planning, and controlling
operational activities of organization (Cescon, Costantini and Grassetti, 2019). This report is
prepared for solving issues of Creams Limited, it is medium size organization which provides
foods and beverage items to their customers. In this report uses of cost, price job accounting
system for formulating of policies, various report use for performance evolution has been
describe. This report also included technique which helps in reorganization of profits and tools
used for identification of reason of financial problems and ways through which organization can
overcome this problem has been defined clearly.
TASK 1
P1 Understanding of Management accounting system.
Management accounting is a framework which helps in representing accounting data in
order to formulate strategic plans for attaining future goals of business organization (Agustia,
Sawarjuwono and Dianawati, 2019).
Financial Accounting: It is a branch of accounting which is related with recording,
summarizing and communicating only financial transactions (Weygandt, Kimmel and Kieso,
2019).
Difference between management accounting and financial accounting
Management Accounting Financial Accounting
It provides information for internal parties It provides information for external parties
It is futuristic In this accounting historical data a use for
interpretation
It measure financial and operation
performance
It measure only financial information.

For formulation of various strategies manager needs to use some specific system of this
branch of accounting, these are described below:
 Price Optimising System: This system is used to define various types of pricing
strategies an organization can use for selling their products. Manager will take
decision regarding their product prices on the basis of their organizations needs and
the cost incurred during the whole process of converting raw material into final
product. Organization can use price retraction, price skimming, and cost of pricing,
discounting strategies of price they decide it on the basis of scanning their
competitor industries, external factors and future objective of organization. It also
depends on the product life cycle as well as industrial life cycle of the organization.
The main requirement of this system is to ascertain behavioural change among
consumers due to performing the act of price change. This help to attract new
potential consumers.
 Cost Accounting system: It is a framework which provides various types of
technique though which organization can easily evaluate cost incurring during their
production process by the uses of this system manager can evaluate activities which
incurred high rate of expenses (Hasyim and Jabid, 2019). Job costing, process
costing, marginal and standard costing are part of this system. Business
organization applies system of cost on their basis of their size, external as well as
internal factors of the organization. Process costing is used for mostly
manufacturing units, marginal and standard costing can be adopted by any type of
organization theses technique help in determining of profits as well as risk factor of
the enterprises. The main requirement of this system is to ascertain costing
associated with production of each unit so further actions can be taken to minimise
expenses and costings.
 Inventory Management System: Inventory is most essential part of every
organization success of an enterprise depends on how effectively their manager use
and maintain stock in effective way (Swafford and Costello, RTC Ind Inc, 2019).
For this purpose, inventory management system has to been developed through
which organization can plan, manage and control stock. By the uses of EOQ, LIFO,
FIFO, method managers calculate maximum, minimum, and dangers level of