Management Accounting and Techniques for Budgetary Control

Management
Accounting
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Table of Contents
Table of Contents.............................................................................................................................3
INTRODUCTION...........................................................................................................................4
Task 1...............................................................................................................................................4
P1 Management accounting and giving essential requirement....................................................4
P2 Different methods uses for management accounting report...................................................5
M1 Evaluate the benefits of management accounting systems and their application within an
organisational context..................................................................................................................6
Task 2...............................................................................................................................................7
P3 Calculate cost using appropriate technique of cost analysis to prepare income statement....7
M2 Range of management accounting techniques and produce appropriate financial reporting
documents..................................................................................................................................10
Task 3.............................................................................................................................................10
P4 Advantages and disadvantage of planning tools for budgetary control...............................10
M3 Analyse the use of different planning tools and their application for preparing budgets and
...................................................................................................................................................13
forecasts.....................................................................................................................................13
Task 4.............................................................................................................................................13
P5 Compare how organisation are responding the problems....................................................13
M4. Responding of financial problems leads to sustain success through managerial book-
keeping.......................................................................................................................................15
REFERENCE................................................................................................................................17
Books and journal......................................................................................................................17
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INTRODUCTION
Accounting refers as action which are performed by management for identifying, keeping
and maintaining the records of accounts and financial information that are important to run a
business and increase productivity. Management accounting is a profession that is related to
accounts and other information for the purpose of increasing organisational productivity. This
involves partnering in decision making, planning and performance management system that
operated a business successfully (Gao and Zhang, 2019). This is important for organisation to
focus on management accounting and bring innovation as well as improvement in their business
so profitability can be maintained. To increase and knowing about management accounting City
Technology Limited has been selected that is medium size organisation. This is manufacturing
company specialises in gas sensing units by operating business. This report covers system of
management accounting, reporting and tools of controlling the budgets. Management accounting
to respond the problems are also defined.
Task 1
P1 Management accounting and giving essential requirement
Management accounting refers as activities in relation to business that can help to operate
the business and increase the performance. This is important for organisation to manage the
performance and activities for the purpose of running business and maintain productivity. It uses
to identify, gathering, collecting information for running business and improving profitability. In
context to City Technology Limited, management are using different accounting system for
managing the activities and performance that are as defined:
Inventory management system – This system is related to inventory management that
uses to keep record and tracking the stock which are available in organisation and maintaining
the good performance. The managers of organisation should uses different system that can help
to keep records of stock and managing the activities that helps to run the business. In context to
City technology Limited, this system is uses to keeping track of gases and other stock that helps
to operate the business and maintain the performance. This can help to increase productivity and
profitability by managing the raw material and other items so all activities can be maintain and
increased (Goh, 2019).
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Essential requirement – Inventory management system is essential for tracking the
inventory which is available at multiple location in store. This is also required to auditing of all
inventory movement that can help City technology Ltd. To make right decisions.
Cost accounting system – This system is related to cost that can help to manage the
costing and increase the performance. By using this this system, managers can set the cost of
each product and services which can help to maintain the activities. Such system is uses by firms
for estimating cost of their products for the purpose of taking profitability analysis. In context to
City technology Limited, cost accounting system is uses to set the cost of products and services
which can help to manage the activities. This can help to increases to manage the activities by
running and estimating cost in relation to business (Semikolenova and et. al., 2020).
Essential requirement – Cost accounting system is essentially required to recording and
classification of cost in relation to a business and maintain good performance of a business. This
is essential required in organisation for estimating the cost and managing the all activities.
Therefore, City technology Ltd is using this system for estimating cost and manage the activities.
Price optimisation system – Such system is related to setting the prices and cost of
products which are available in organisation and increase the number of customers. For
organisation it is important to have right prices so they can manage all business activities and
maintain the good performance. For City Technology Limited, it is essential required to set the
prices of gases and other items which help to run business successfully. This organisation is
retaining their existing and new customers which helps to enhance the business and maintain
high profitability (Ravenda and et. al., 2019).
Requirement essentially – The requirement of price optimisation system is essential as
deciding the prices of products and services which are providing by organisation and helps to
increase the sale by setting right prices.
Job costing system - This system states that cost of each section should be divided and
classified according to specific department so accurate income and expenses can be record and
manage the high productivity. It is essential required for City Technology Limited to determine
the different batches of product and services so profitability can be maintain effectively. This
also helps to maintain the quality of products and services so a business can be run properly.
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