Management Accounting Principles and Systems

Management
Accounting
.

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explanation of management accounting principles................................................................3
Role of management accounting and management accounting system.................................4
Cost calculation with use of the marginal and absorption costing.........................................7
Evaluation of management accounting and its integration among organisation....................9
Benefits of management accounting system........................................................................10
CONCLUSION..............................................................................................................................11
PART 2..........................................................................................................................................11
Compare and contrast three planning tools in management accounting .............................11
Effectiveness of management accounting in dealing with Financial problems ..................15
Recommendations and conclusion for achieving sustainable business ...............................17
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................19
.

INTRODUCTION
Management accounting is explained as the utilisation of different tools, provisions,
techniques related with financial aspects of an organisation. The main motive of organisation is
to improve overall organisational profits to maximise their business size in various geographical
areas. The prime focus of organisation is to enhance accounting systems and functions through
maximising knowledge related with financial factors. This report is written from perspective of
Rowlinson Knitwear which manufactures clothes for large corporate houses and schools.
Moreover, explanation of management accounting principles, role of management accounting
and management accounting system will be understand through this report (Chenhall and Moers,
2015). Methods and techniques for formulation of income statement is also analyse in the
upcoming report for understanding management system. Evaluation of management accounting
and benefits related with organisation is included in the report. In the last, compare and contrast
of different planning tools related with management accounting will highlight in report.
MAIN BODY
Explanation of management accounting principles
Management accounting is explained and refers according to all techniques, tools and
methods related financial section which aid respective organisation for accomplish of their
organisational accounting goals and objectives with decided budget and financial respective.
Management accounting principle (MAP) was formulated for serve core and all essential needs
of internal management for improving decision support system, objectives and use of resources
within organisation. Also, on the other side there are different task performed by management
and as per this some main principles of management accounting in context of Rowlinson
Knitwear are mention as follow:
 Designing and compiling- Accounting information perform an important role to record,
report, statement and all other past data related with accounts (Cokins and Căpușneanu,
2020). In the context of Rowlinson Knitwear management focus on compiling all projects
in an organised manner through modifying information related with business and
financial factors. This support organisation to manage task for a particular factor.
 Management by exception- All principles related with management exception are
followed by organisation to present all information such as budgetary control system,
.

standard costing techniques, etc. to complete all task with decided accounting system.
Rowlinson Knitwear utilise management by exception through compare actual
performance with pre-determine deviations. On the other side, management spent less
time to read and study of information so work actions are started according to decided
time.
Role of management accounting and management accounting system
Management accounting perform an important role in the process of formulating all
report related with functions and operations of Rowlinson Knitwear (Fleischman and McLean,
2020). The main motive of managers is to generate long and short term decisions by measuring,
analysing, interpreting and communicating all information related with manager. The main
motive of respective organisation is to generate long term factors by considering different
accounting system in an organised manner as they plays an important role in company operations
that are mention as follow:
TYPES OF MANAGEMENT ACCOUNTING SYSTEM
 Cost accounting system- Manager ensures that they perform their role in an organised
manner through completing all tasks with decided factor in order to control cost of
business product and services. Rowlinson Knitwear control cost through increasing
efficiency of their cost accounting system.
Essential of cost accounting system- It plays a major role for minimising the overall cost
related with organisation. Right techniques and functions perform an important role to track
operational cost of business. It results cost accounting management helps managers for
completing their task according to decided cost for offering product at right price in market.
Also, the cost-accounting system helps for completion of work with decided budget and this is
used for manage task with use of reliable financial information.
 Job costing system- Manufacturing organisation engaged and perform their work
through focusing on job costing system (Hariyati, Tjahjadi and Soewarno, 2019). This
results management is able to complete task according to decided orders and time.
Similarly, job costing system ensures work is managed as per roles of organisation.
Essential Role of job accounting- It ensures that job orders plays an important role for the
organisation to perform their task in an effective and efficient manner. This also ensures work is
.