Management Accounting: Techniques, Planning Tools, and System

Management accounting
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Concept of management accounting.................................................................................3
P2. Methods of management accounting reporting................................................................6
TASK 2............................................................................................................................................7
P3 Techniques of cost analysis .............................................................................................7
TASK 3..........................................................................................................................................13
P4 Planning tools used for budgetary controlling................................................................13
TASK 4..........................................................................................................................................15
P5 Management Accounting System....................................................................................15
CONCLUSION ............................................................................................................................17
REFERENCES..............................................................................................................................19
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INTRODUCTION
Management accounting refers to an assistance tool used by managers, this tool helps
them to formulate plans to achieve long term and short term objectives of the firm. It helps
managers by analysing and interpreting results provided by financial accounting. It is determine
that management accounting is used for the planning of future requirements of an organization
by using financial information which are given to plan budget & execute strategies to enhance
profitability. Another purpose of management accounting is directing and motivating staff
members in a proper manner. Management accounting aims at improving quality of information
provided to management about business operations, with the help of this information, managers
decide their future course of action (Bobryshev and et.al., 2015). This report is drafted on
Primark which is leading fast fashion retail venture that performs key operations from
headquarters situated at Dublin, Ireland. It have around 7000 employee size and aims to become
most preferred retail organisation globally.
This document focuses on application of management accounting techniques on a given
set of data. Further, it covers use of different type of planning tools in order to solve financial
problems faced by Primark.
TASK 2
P3 Techniques of cost analysis
For the purpose of producing something including products and services, it is essential
for all organisations to analyse cost that is involved at different levels. Key costs types that are
occurred at Primark are indirect, fixed, sunk, opportunity, variable and so many other costs. Cost
analysis benefits managers to measure advantages of decision making about relevant cost that are
part of undertaken action. Flexible budgeting guides managers to make adjustments in changes
that are part or real revenue levels. Similarly, cost variance permits in monitoring financial
progression about activities that are performed in business. Within Primark, essential cost
analysis techniques that have assisted financial accountant in preparing income statement are as
elaborated:
Marginal costing: This is a costing technique used to determine relationship between
volume produced and the cost incurred in that production. Marginal cost can be defined as the
additional cost of producing an additional unit (Johansson and Kriström, 2018).
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Absorption costing: This costing technique refers to process of capturing all
manufacturing costs incurred and than allocating these costs over all units produced. These
captured costs can be direct and indirect as well.
Calculations of income statements of organisation, for example, Primark with cost analysis
techniques:
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