Management Accounting and Essential Requirement

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1.Management accounting and its requirements in an organisation:........................................4
P2: Explain different methods used for management accounting reporting...............................5
TASK 2............................................................................................................................................7
P3.Income statements by absorption costing and marginal costing:...........................................7
TASK 3............................................................................................................................................8
P4.Benefits and weaknesses of different types of panning tools used in budgetary control:.....8
TASK 4..........................................................................................................................................10
P5.Comparison of companies in resolving the financial issues:...............................................10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................14

INTRODUCTION
Management accounting that also known as managerial accounting which is a chain of
activities for analysing cost of a business and operations for building financial reports, records
that helps in taking important decisions in achieving financial goals and objectives. It is very
much important for organisation to translate data and statistics into meaningful information from
it. This report is based Airdri which is a hand drying industry founded in Oxfordshire in year
1974 to give best experience to their consumer base by giving best products and services. This
report is based on management accounting and essential requirement of various kinds of
management accounting systems. With various kinds of methods of management accounting
reporting to get reliable outcomes in an organisation. Further it includes varied costs with help of
techniques for preparing income statement with advantages and disadvantages of various kinds
of planning tools for budgetary control. At last comparison in between organisations for adapting
management accounting systems to respond with financial problems or concerns.
TASK 1
P1.Management accounting and its requirements in an organisation:
In management accounting involves building and providing timely financial with statical
data and information to managers of business for taking day to day decisions for accomplishing
organisational goals and objectives (Banerjee, 2012). Information and data which founded in
management accounting is vast in nature and helps to managers in formulating business policies
and plans in taking effective decisions.
There are various types of management accounting systems that are as follows:
Inventory management system:
Cost accounting system:

Cost accounting system or costing is an accounting framework that applied in an
organisation to predict or approximate cost of their products for motive of valuation of inventory,
analysis of profitability and controlling cost (Cadez and Guilding, 2012.). In cost accounting
system allocation of the cost should be performed on basis of activity based costing system or by
using traditional costing system. Estimation of actual cost is very much potential for organisation
for effective functioning of various activities. It is an kind of accounting system with motive of
capture and evaluate organisational production cost by weighing inputs cost and includes fixed
cost for taking crucial decisions. In context of Airdri they use cost accounting framework for
evaluation of cost of products and services by evaluating each and every factor associated with it.
Inventory management system:
Inventory management consist of methods or tools to control and evaluate the overseeing
of ordering, usage and storage of various components that are applied in organisation to produce
goods and services that they want to sell (DRURY, 2013. ). It helps in combining various
applications of barcode scanner, desktop software's and mobile devices by streamlining the
management of inventory that are consumables, goods and services and supplier products and
services. It is a important practice for controlling and overseeing quantities of finished products
and services in proper way. In context of Airdri by using inventory management they evaluate
and measure factors that affect inventory in proper by so that effective results should be
accomplished.
Job costing system:
Job costing is an system refers to allocating the cost of manufacturing for an individual
product or batch of a products to get right kind of inputs (Fullerton, Kennedy and Widener,
2014.). For job costing system information should be needed to submit data to ultimate
consumers as per the contract in which costs should be refunded. That kind of information is
very much essential for determining accuracy of system that should be capable for quoting
pricing that reasonable for pricing. In context of Airdri they by using job costing system by
collecting and allocating manufacturing and their resourcing.
Price optimisation system:
Price optimisation system refers to the mathematical application to determine reaction of
consumers to their various price levels regarding their goods and services. It basically applied for
determining of pricing that helps to organisation for fulfilling their goals and objectives to