Management Accounting Assignment - KEF LTD

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Different type of management accounting system................................................................3
P2 Different type of management accounting reports.................................................................5
TASK 2............................................................................................................................................6
P3. Range of management accounting techniques.......................................................................6
TASK 3............................................................................................................................................9
P4.Planning tools used in management accounting.....................................................................9
P5. Comparison of organisations adapting management accounting to respond to financial
problems. ...................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
In the today's present business scenario, there is an essential need of appropriate a skilled
management system that help to control the valuable operation of company in order to increase
the efficiency of business (Collis and Hussey, 2017). Management accounting is a procedure
related with analysing, controlling, managing useful financial information within a business firm
in order to make meaningful decision by the top level manager for growing and developing
profitability in specific period of time. The entire process of cost or managerial accounting start
by gathering, reporting, calculating, measuring, analysing and transferring valuable financial
information of company that are helpful to accomplish the desired goals in predefined time
period. To better understand the importance of management accounting KEF LTD is selected
that is a manufacturing company.
In this report, understanding of various system and reports are demonstrated, by applying
valuable accounting techniques production cost per unit, budgeted P&L statements etc. are
calculated. In addition, report also discuss the use of different planning tool that are used in
management accounting and the ways different system help to respond financial problems.
TASK 1
P1. Different type of management accounting system
In the business context, the concept of management accounting is consider to be an
internal befitting system that support to calculate or measure the overall performance of assorted
units within business firm. Manager usually set standard for evaluating performance, examining
various strategies which support in accomplishing defined goals also aid to make out actual
reasons in deviations for current objective (Schaltegger, Burritt and Petersen, 2017). In business
term, management accounting usually deliver the non-financial and financial data to the manager
and other employees of firm that help to make best effective decision in order to increase the
profitability, productivity and attain goals. There are various useful system of management
accounting that help the management of KEF Ltd that are defined below:
Inventory management system: This system helps to manage inventory of business firm
in form of raw material, goods in transact and finished goods. There are various methods for
controlling stock of company like FIFO, LIFO and Average method that provide the strength to
supply chain of company. In KEF Ltd FIFO method is applied as with this method they are able

to remove old goods and also reduces losses due to obsolescence. First in First out help KEF Ltd
to produced product as per the trends in market and customer preferences this help to grow
profit.
Cost accounting system: It is used to determine the cost of total production of various
goods manufacture by company. It basically includes total cost at several level and also include
fixed cost that help to determine the profit. There are useful method of accounting cost such as,
marginal and absorption costing, lean costing, activity and standard costing method. In
respective company Activity based costing method is used that basically assigns total cost to
goods which are related with producing goods (Humphrey, C. and Miller, 2012).
Job Coasting system: This method mainly record the cost which are related with
producing good job within an organisation. It assist to delegate manufacturing cost to each good
and product director and accountant have evidence of cost of each product. This system also
support in calculating cost of various product that are manufacture by company in same period of
time. Thus, in KEF Ltd this system help to evaluate and measure the cost of various useful
product that are produced by company in order to meet the customer needs.
Price optimisation system: This is considered to be most important system for company
as it help to determine the customer reaction on prices set by company for manufacture product.
Manager use to fix decent price of goods that will make customer happy and profit can be
maximised. So in KEF Ltd this system support to get the best prices for produced goods in order
to reduce the chances of overpricing and attain the desired profit by satisfying customer.
Benefits of different system
Different accounting
systems
Benefits
Inventory management
system
 It aid company in utilising available goods and raw
material so that desired goals can be attained.
 This system support to keep a proper track of entire stock
and of any request from supplier so that profit can be
increased ( Holsapple, 2013).
Job Costing system  This system assist to provide decent steadiness in
examining and decreasing cost relevant to specific job