Management Accounting

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Management accounting and types of management accounting systems..............................3
P2 Methods used for management accounting reporting............................................................4
M1 Benefits of management accounting systems.......................................................................5
TASK 2............................................................................................................................................6
P3 Costs using appropriate techniques of cost analysis..............................................................6
M2 Management accounting techniques.....................................................................................8
TASK 3............................................................................................................................................8
P4 Advantages and disadvantages of different types of planning tools......................................8
M3 Planning tools and their application...................................................................................10
TASK 4..........................................................................................................................................11
P5 Organizations are adapting management accounting systems.............................................11
M4 Financial problems, management accounting can lead organizations................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is provision of the financial data to company for use in company
and also business development. This consists presentation of the financial information for the
internal purposes that mainly used through management in order to main business decisions.
Management account is procedure of the preparing reports related to management and accounts
which give the accurate as well as financial information to the managers for making the long
term and short term decisions (Ameen, Ahmed and Abd Hafez, 2018). Innocent drinks is firm
that makes the juice and smoothies sole in the supermarkets, coffee shops and the different
outlets. There will be discussed about the management accounting and provide necessary needs
of the various kinds of the management accounting. Benefits and the disadvantages of various
kinds of the planning tools used in the budgetary control will be discussed in a detailed manner.
TASK 1
P1 Management accounting and types of management accounting systems
Managers use accounting provisions information to inform better themselves before they
decide the matters within company. It is used only through internal team of company and this
things makes it varied from the financial accounting. The main purpose of management
accounting is to help internal users to firm in making informed business related decisions.
Management accounting systems
Inventory management system: This is combination of the processes and technology that
oversee monitoring as well as maintenance of the stocked goods (Azudin and Mansor, 2018). In
context to innocent drinks, inventory management system track the quantities effectively in
storing the location. Essential requirement of the inventory management system mention below:
 Categorising the material together with managing an inventory of Innocent Drinks to give
the necessary inventory. To keep track of the available stock as well as manage the reorder level.
Cost accounting system: It is a framework that used through organisations to estimate
cost of goods for analysis of profit, cost control and inventory valuation. Its essential
requirements given below:
 Allocate cost according to activity that is related to traditional costing and activity based
costing.

 Track the cost and also control them by making better decisions which are related with
enhancing profitability and productivity of the Innocent drinks.
Job costing system: This is system for accumulating and assigning the manufacturing
costing of person (Bedford and Speklé, 2018). It is used when different items are manufactured
different from the each other and has significant cost. Essential requirement of the Job costing
system mention below:
 Ascertain the reliable estimation for the monetary values concerned to overheads,
information labour and direct material.
 Applying the information and accumulating for assigning cost to process the goods.
P2 Methods used for management accounting reporting
Management accounting reporting is process of giving information to different
management levels as to enable judging effectiveness of responsibility centres and taking the
corrective decisions. This emphasize on the inside information that received by financial
accounting. In regards to this, managerial accounting reports are used for the planing, decision
making, measuring the performance and also regulating. The different methods of management
accounting reporting used by Innocent Drinks mention below:
Performance report- This is related to the detailed statement that analyse outcomes
certain activities to its success within time period. In Innocent Drinks, management accounts
makes the use of budgets in order to comparing the actual expenditures with the revenues to the
budgeted variables. In context to performance report, managers plans the future demands of
juices and smoothies and then make changes in the cost accordingly.
Budget report- Budget report is comparison of actual result of business to pre-
established objectives. It is mainly issues to the everyone that responsible line item in income
statement. It is used to identify that which of the expenditure level is too high so actions can
taken to bring the level of expenditure (Bui and De Villiers, 2017).
Inventory management report- This is summary of the information of existing stock
like goods and quantity of the availability of stock which are selling the fastest and also grocery
performance concerned with status together to performance inventory. Good inventory reports
included the update information with high detail level and also use the visuals to make this clear
that number of items have in the stock. For development of the Innocent Drinks, this is important