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MANAGEMENT ACCOUNTING INTRODUCTION

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Added on  2020-06-03

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Management accounting and essential requirements of different types of management accounting systems 1 P2 Various methods used for management accounting reporting3 TASK 26 P3 Calculate of costs by using appropriate techniques of cost analysis for formulating an income statement using marginal and absorption costs 6 TASK 39 P4 Advantages and disadvantages of different types of planning tools used for budgetary control 9 P5 Ways through organisations are adapting management accounting systems to respond to financial problems 12 CONCLUSION 13 REFERENCES 14 INTRODUCTION Management can be stated as

MANAGEMENT ACCOUNTING INTRODUCTION

   Added on 2020-06-03

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Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Management accounting and essential requirements of different types of managementaccounting systems......................................................................................................................1P2 Various methods used for management accounting reporting ..............................................3TASK 2............................................................................................................................................6P3 Calculate of costs by using appropriate techniques of cost analysis for formulating anincome statement using marginal and absorption costs..............................................................6TASK 3............................................................................................................................................9P4 Advantages and disadvantages of different types of planning tools used for budgetarycontrol.........................................................................................................................................9P5 Ways through organisations are adapting management accounting systems to respond tofinancial problems.....................................................................................................................12CONCLUSION .............................................................................................................................13REFERENCES..............................................................................................................................14
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INTRODUCTIONManagement can be stated as a process in which there are certain guidelines which arebeing utilised by the managers in order to monitor accounting of data so that decision-makingprocess can be much more effective. There are various steps and plans which are being involvedin the process of management accounting (Management accounting, 2017.). This process ishighly involved in gaining proficiency while creating reports regarding finance for supportingthe management. Company chosen for this report is Bizdaq which was established in the year2015 and since then, they have been dealing in sales projects. Moreover, company’s turnover isapprox. £100,000 and it compiles of less than 50 staff members. There are certain things whichare being discussed in this report like understanding of management accounting systems andimplementation of management accounting techniques. Apart from that, there are various toolswhich are being utilised planning techniques in management accounting so that aims andobjectives can be attained in effective manner of firm. TASK 1P1. Management accounting and essential requirements of different types of managementaccounting systemsManagement accounting system can be stated as a process in which motivation is beingprovided to employees so that they can be involved in the decision making process. This kind ofprocess is highly essential and beneficial for the leaders as support is being provided to themwhile planning and performance management system. While making financial reports, expertiseis being required in management accounting system. Below shown is the diagram which explains various kinds of management accountingsystems: Inventory Management System: In this kind of management accounting system, themain focus is on dealing with raw materials, methodologies and finished goods and thus,they are being used in process of production by an organisation. There is high need ofmanaging the stock and therefore, various kinds of stock management software tools areneeded so that measurement can be taken of level of stock, number of orders as well assales and delivery of products (Armstrong and Taylor, 2014). This kind of software isneeded the manufacturing firms so that their process can be controlled for obtaining1
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maximum amount of output within limited input material. This kind of process can beadopted by Bizdaq so that they can control and measure their inventory level and thus,eliminate wastage of necessary resources. This in turn can help company to enhance theirnet worth by using their limited resources at optimum level in order to gain maximumprofitability. This factors should be known by Bizdaq so that by this techniques they canenhance the productivity. Price Optimisation: In this kind of technique, company mainly calculates the price ofproduct by applying various mathematical applications like linear equations, sensitivityanalysis and method of graphs. This is highly essential for a company that is working ona large scale and needs to manage the various kinds of data so that required modificationscan be made through this in products and services. Besides this, management accountingapproaches mainly focus on optimum level of cost at which a company can earn desiredamount of profits (Assaf, Josiassen and Cvelbar, 2012). Many organisations are stillstruggling and finding ways through which they can form proper price which can becharged from vendor and customers. Therefore, suggestions can be provided for priceoptimisation in which graph values can be provided so that demand curve can meet themaximum profits. These kinds of methodologies can be utilised by Bizdaq so thatappropriate solution can be extracted in which the best price of products can be seen inmaximising profits and demand can also not get affected. Job Costing System: This kind of technique is highly essential for a company so thatmanufacturing cost can be determined and measured. However, in this process, cost isbeing ignored. Feasibility of data can be monitored and measured by any company thatadopt this kind of technique like job costing system which can also measure the cost ofparticular job. This kind of technique is being mostly used in construction industry whichmainly deals in infrastructure and diversifies the cost which is being related to particularconstruction project of company. This kind of methodology can be applied by Bizdaq inwhich various kinds of jobs like direct labour, material. Moreover, there is overhead costswhich is being allocated among these kind of jobs. This type of technique can be appliedby cited organisation so that measurement can be taken of production and profit ratiosand thus a perfect job report can support Bizdaq in monitoring and calculating profits andloss during a year (Bebbington, Unerman and O'Dwyer, 2014). 2
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