Management Accounting and Its Importance in Wiz Phone Limited

Management
accounting

INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1.................................................................................................................................................3
P2.................................................................................................................................................4
M1................................................................................................................................................5
LO2..................................................................................................................................................5
P3.................................................................................................................................................5
LO3..................................................................................................................................................7
LO 4.................................................................................................................................................7
P5.................................................................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Management accounting is mainly concerned with presentation of the professional
knowledge ad and abilities for revealing accounting information that helps the manager in
formulating policy, controlling and planning for undertakings. The present report is based on
Wiz phone Limited, a producer or manufacturer of the special charge adapter and able for the
mobile phones and the other types of the gadgets specifically for retail customers in entire UK.
Furthermore, the study highlights several aspects of MA and importance of its systems in an
enterprise. Moreover, the study also presented the use of various planning tools or budget along
with their benefits and limitation to the business corporations.
LO1.
P1.
Management accounting is been defined as the practice of facilitating the financial
resources and an information to the managers in making decisions (Amran, 2020). In other words
it is also defined as the process of determining, measuring, assessing, communicating and
interpreting the financial information to the managers for achieving the organizational goals
effectively and efficiently.
Difference between financial and management accounting
Basis Financial accounting Management accounting
Meaning It means an accounting system
that emphasize on formulation
of final report of an entity to
facilitate financial information
to interested parties.
On the other hand it is the
system that provides relevant
information to managers in
making plans, polices and the
strategies for the purpose of
running business in an
effective way.
Objective The main purpose of FA is to
provide financial information
to the outsiders.
However, the purpose of MA
is to help management in
planning and process of
decision making by
facilitating in detail
information on several
matters.
Users The major users under
financial accounting are the
internal and external parties.
On other note, the main users
under MA are internal
management.
Reports It provides for preparation of
the summarized reports
regarding a financial position
Under this detailed and the
complete reports are framed in
relation to various

of an enterprise. information.
Auditing & publishing The financial statements are
required to be audited and
published by that of the
statutory auditors.
The reports under MA not
needed to be published or
been audited by the statutory
auditors.
Importance of MA information
It relates with using information in relation to the operations for producing reports that
facilitate ongoing insight with respect to performance of the business like profit margin,
utilization of labor. This helps the managers of the Wiz Phone Limited in making operational
decisions with an objective increasing efficiency and also in making the long run decisions
relating to investment.
MA systems and its importance
Inventory management system- It is the system that combines processes and the
technology which oversee maintenance and the monitoring of the stocked products within the
premises (Panchenko, 2018). This system plays a critical role in managing inventory and stock
items of the business with keeping a track on the assets. The system also helps in analyzing
inventory needs and in automating ordering.
Cost accounting system- It refers to the framework that is used by an enterprise for
estimating cost of the product for making profitability assessment, valuing inventory and
controlling cost. This system is found as important in anticipating accurate product cost for the
profitable operations.
Price optimization system- It is referred as the use of the mathematical tools by Wiz
Phone Limited for determining the way in which customer responds towards different prices for
the services and the product by using different channels (Shevelev, Sheveleva and Gvozdev,
2017v). This MA system helps in identifying suitable prices for attaining objective profit
maximization effectively.
Job costing system- It means the method of computing or recording costs of producing
job instead of the process. Manager by using this system could be able to track cost of every job,
maintaining relevant data relating to business operations.
P2.
Account receivable report- It involves information in relation to the goods provided on
credit to the customers or any other party. This report plays a critical role in finding out problems
present in collection process of the firm (Amara and Benelifa, 2017). It helps the manager in
overlooking the old debts and tightening credit policies.