Management Accounting Techniques and System

Management
Accounting

INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
LO 2.................................................................................................................................................4
LO3................................................................................................................................................10
LO 4...............................................................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting is also defined as managerial accounting system through which
business organisation can strengthen their financial performance and can conduct all activities
and organisational functioning with management of funds and resources with great efficiency.
Management accounting also aid an entity today to conduct decision-making while assuring
success that allows them to gain more competency (Nsor-Ambala, 2020). This system provides
leaders and managers to conduct internal decision making process while making best decisions
for company with assistance of different methods tools and techniques. Present report has been
conducted on MSD lightning Limited. In these report formative discussions has been made on
understanding of management accounting system, range of management accounting techniques
and use of planning tools in management accounting. Along with this comparison in which
company can utilise management accounting to respond financial problems effectively are also
being included in this report. Management Accounting techniques and understanding of
management accounting system concept is also being covered in this report.
LO1
Management accounting:
Management accounting is a systematic procedure in which different type of activities are
involved that are collection of monetary and non monetary terms, presentation and evaluation of
financial data and performance of company. With the help of this system an organisation can
assure various advantage in terms of strengthening their financial process and conduct daily basis
operations with higher efficiency. This system increase effectiveness of company planning,
organising, decision-making, staffing and controlling functions. In this it is essential for MSD
lightning limited to and take advantage of management accounting as to gain more competitive
advancements and long-term sustainability within industry.
Reliability:
An organisation is required to process reliable and essential information and data. With
the help of this that can not only enhance their future performance but can also undertake
decision through which they can conduct their financial functioning with higher efficiency.
Up to date:
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Organisation managers are having responsibility to ensure that all the information that is
involved in accounting systems is up to date and accurate. This will enhance effectiveness of
making decisions and facilitate organisation to accomplish their objective in a well defined and
effective manner. By maintaining financial records in update basis, company can also assure
other benefits.
Different Types of accounting system:
Price optimisation system –
Price Optimisation system assists company to determine price of related services and
products. With the help of this MSD lightning Limited can effectively review consumer
perception on different level of pricing (Miller, 2020). This will assist organisation to ensure
sustainable advantages in respective industrial segment along with maximized competitiveness.
Entity is required to set a particular price base for their services and products in a systematic
manner. With the help of this they can serve customers accordingly while assuring higher
profitability. In addition to this it is also essential for organisation to evaluate behavioural
conduct of consumers towards services and products.
Inventory management system –
Inventory has most important aspect for any organisation through which they can conduct
their daily basis operation in an effective manner. Thus, it is essential for any organisation to
have a strong inventory management system in order to effectively utilise their resources at full
extent. With the help of this system entity can significantly reduce wastage on unnecessary
expenses and can ensure more profitability. It is important for MSD lightning limited to take
advantage of various methods and strategies of inventory management system in order to control
expenses and wastage and conduct cost-effective manufacturing process. With the help of this
they can strengthen their organisational activities while assuring hire profitability and
productivity.
LIFO – With lifo method it states stocks those who come at end place will go out in the first
basis. This indicates lifo method is last in first out.
FIFO – This methods state stock that first come get sale out first in this there is a process which
is related to first in first out.
AVOC – AVOC method included calculations of cost of inventory on average basis.
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