The Unilever Limited Management Accounting Systems
Added on 2021-02-19
19 Pages5550 Words411 Views
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Managementaccounting
Table of ContentsINTRODUCTION...........................................................................................................................1LO1..................................................................................................................................................1P1. Explaining the concept and the essential requirement of the management accountingsystems........................................................................................................................................1P2. Explaining several methods that are used for the management accounting reporting..........2M1. Evaluating the benefits and the application of the management accounting systems withinthe Unilever Limited. .................................................................................................................3D1. Critically evaluating the integration in between the reporting and the systems ofmanagement accounting .............................................................................................................4LO3 .................................................................................................................................................4P4 The advantages and disadvantage of different types of planning tools used for budgetarycontrol.........................................................................................................................................4It does not ingnored teh non-cash transcations................................................................................7LO 4.................................................................................................................................................8P5. Comparing different management accounting system assisting in resolving financialproblem.......................................................................................................................................8CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONManagement accounting refers to the process that analyses the cost of the business andthe operations in order to formulate financial report internally. It helps the managers in makingadequate decision for the achieving the goals of the business effectively and efficiently. Thepresent study is based on Unilever Limited, a manufacturing firm that deals in wide range of theproducts such as food, cleaning agents, personal care items and beverages. Furthermore, thestudy includes the management accounting systems and the reporting that are essential for thecompany in managing its functions. It also throws a deep insight towards planning tools and themanagement accounting system that helps in resolving the financial problems. LO1.P1. Explaining the concept and the essential requirement of the management accounting systems.Management accounting refers to the preparation and providing the statistical as well asthe financial information to the business managers that helps them in making the routinedecisions within the Unilever Limited. The roles and the principles of the managementaccounting covers all the fields of the accounting that is been designed for informing themanagement in relation to the parameters of the business operation (Thomas, 2016). It involvespreparing the reports of the budgeting, making trend analysis, forecasting sales, constraintanalysis and the product costing. Unlike financial accounting, management accounting facilitatesboth monetary and the non-monetary information to the user. The reports under managementaccounting is been prepared as per the requirements of the company while in financialaccounting, the reports is been formulated at period end. The information provided by MA isused only by the internal users, however, financial accounting information is used by bothinternal and the external users. Management accounting reports need not to be audited andpublished whereas the financial accounting reports has to be published and to be audited by thestatutory auditors. Cost accounting systems- It refers to the system that is used by the Unilever Limited inorder to estimate their product cost for making the inventory valuation, profitability analysis andthe cost control (Ismail, Isa and Mia, 2018). It acts as the critical system as it helps inestimating accurate product cost and in improving the overall profitability with cost efficiency ofthe business. 1
Inventory management system- It is the system that oversee the maintenance and themonitoring of the stocked products. This system is important because it helps the managers ofthe Unilever Limited for tracing delivery of the goods in the overall supply chain managementand also provides information relating to the record of the inventory.Optimization system- This system referred as the mathematical analysis that determinesthe response of the customers at different level of the price (Messner, 2016). Price optimizationsystem is essential because it enables the Unilever Limited in assessing the response of itscustomer towards different price set up for its product and the services which in turn assist infixing the best prices that leads to achievement of the profit maximization objective. Job costing system- It involves the practice of the assigning and accumulating theinformation relating to the cost that is attached to the particular production or the service job. ITis vital for the Unilever Limited as it reveals the profitability gained from each of the job andprovides for tracking of the project at every stage so that goals can be achieved as per thestrategies set. P2. Explaining several methods that are used for the management accounting reporting.Management accounting reports are been prepared by the managers of the UnileverLimited in order to plan, regulate, making decision and in measuring the performance (Maas,Schaltegger and Crutzen, 2016). It is critical to the company as it provides the reliable, relevantand accurate information to the mangers in relation to the activities of the business and enhancetheir understanding regarding certain patterns. Budget report- This report include the estimation of cost and the income of theenterprise. It is crucial for attaining smooth functioning of the operations with optimum use ofthe resources. It helps in developing the understanding of the grand scheme of the business inoverall budget. It facilitates reliable, relevant and the accurate estimates regarding the costinvolved on the basis of the previous experiences which in turn is important for meeting theunforeseen conditions if any occurs in the future. Cost management reports- This report includes the computation of the cost involved inmanufacturing the article like the cost of raw material, labour cost and the overhead cost. Costreport offers the reliable information to the managers relating to the cost of item against itsselling price (Senftlechner and Hiebl, 2015). It provides for the exact understanding of the2
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