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Management Accounting Research Sample

   

Added on  2020-07-22

20 Pages4975 Words29 Views
Management Accounting
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TABLE OF CONTENTSINTRODUCTION......................................................................................................................1SECTION 1................................................................................................................................11. Explaining the importance of management accounting in the decision making aspects...12. Assessing different types of management accounting systems that can be used within thefirm.........................................................................................................................................23. Critically evaluate management accounting systems that are assessed above..................34..............................................................................................................................................5a. Preparing statements by using absorption and marginal costing system...........................5b. Stating reasons due to which profit as per each technique is different..............................9c. Reconciliation statement....................................................................................................9SECTION 2..............................................................................................................................10Comparing and contrasting planning tools that can be undertaken in accordance withmanagement accounting.......................................................................................................10Presenting the manner in which management accounting systems help in respondingmonetary problems...............................................................................................................14CONCLUSION........................................................................................................................16REFERENCES.........................................................................................................................17
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INTRODUCTION Management accounting field of finance deals with the aspects of performanceevaluation and management. For the purpose of making effective day to day and short termbusiness decisions manager requires timely and accurate statistical or financial information.In this regard, MA tools and techniques help in preparing reports that furnishes informationregarding the monetary aspects of the firm. Managerial accounting reports give input fordecision making and thereby make contribution in the attainment of organizational goals andobjectives. The present report is based on Holder Construction, a manufacturing mediumsized business unit, which will provide deepe insight about the different types of MAsystems. Further, report depicts the manner in which MA aid in suitable decision making.Besides this, it also shed light on the tools that ensure suitable financial planning. It alsopresents how MA tools help in preventing and dealing with monetary issues. SECTION 11. Explaining the importance of management accounting in the decision making aspects Management accounting is the process of preparing accounts and reports that providesmanager with suitable inputs for decision making. In the business organization, managers areusually faced with countless problems. In this regard, role and significance of managementaccounting in decision making aspects are as follows:Provides assistance in making forecast about future: MA tools such as activity & zero base budgeting helps in preparing suitable financialplan and thereby helps in making prediction about the future (Ionescu, 2016). Hence, usingsuch techniques manager of Holder Construction can assess the revenue or profit margin willbe generated over the expenses.Facilitates performance evaluation
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Variance analysis technique of MA enables manager to do comparison of actualperformance with the standards. Hence, by assessing deviations and associated causesmanager of Holder Construction can take appropriate decision for further improvement.Assists in taking decision (make or buy):In the context of manufacturing firms, managers face issue in deciding whether theyneed to make or buy component of products from outside. Hence, such issue can be resolvedby the manager more effectually through conducting make or buy analysis (Fullerton,Kennedy and Widener, 2013). Thus, comparing profit associated with both the optionsmanager of Holder Construction can select the profitable one. Helps in taking decision about sales and profit MA helps manager in assessing the number of units which they need to sell forrecovering the expenses incurred. Further, marginal costing assessment also assists managerin determining the level of sales that need to be made for the generation of desired profitmargin. 2. Assessing different types of management accounting systems that can be used within thefirm Management accounting refers to the process of analyzing cost and operations whichin turn helps in preparing financial reports. Hence, report that is prepared as per MAsignificantly aid in managers decision making and thereby helps in achieving goals. There areseveral types of management accounting systems that can be used by Holder Constructionfor managing internal operations, cost control and profit maximization. Job costing: This system helps in accumulating information about the costs associatedwith specific production or services. By undertaking job costing systems, manager ofHolder Construction can assess or trace cost related to specific jobs. Job costingsystem also helps in assessing whether cost or expenses can be reduced in furtherproduction or not (Job Costing, 2018).Cost accounting: For manufacturing products or services, business unit incurs severalexpenses such as direct and indirect. Hence, using the system of cost accountingHolder Construction can accumulate all the expenses such as material, labour andoverhead. Hence, by dividing total expenses from the number of units manufacturedunit cost can be identified. Along with this, cost accounting system also helps in
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