Management Accounting: Types, Techniques, and Benefits

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Management accounting and its essential requirements and types........................................3
P2 Types of methods which are used for management accounting report..................................5
M1 Evaluate the benefits of management accounting system and its application......................6
D1 Critically examine how management accounting systems and reports integrated within the
organisational processes..............................................................................................................6
TASK 2 ...........................................................................................................................................7
P3 Calculate costs using appropriate techniques of cost analysis...............................................7
M2 Apply management accounting techniques and produce appropriate financial reporting
documents.................................................................................................................................13
D2 Produce financial reports that accurately apply and interpret data for a range of business
activities....................................................................................................................................13
TASK 3..........................................................................................................................................13
P4 Advantages and disadvantages of different types of planning tool used for budgetary
control.......................................................................................................................................13
M3 Analyse the use of different planning tool and their application for preparing and
forecasting budgets. ..................................................................................................................15
TASK 4..........................................................................................................................................15
P5 Compare how organisation are adopting management accounting systems to responds
financial problems.....................................................................................................................15
M4 Analyse how responding to financial problems, management accounting lead organisation
to sustainable success................................................................................................................17
D3) Use of planning tools to responds all the financial issues.................................................17
CONCLUSION..............................................................................................................................18
REFERENCES .............................................................................................................................19

INTRODUCTION
Management accounting refers to the computation of several accounts that are exploited to
make more profit by taking appropriate decisions. Within the business environment various
kinds of organisations that manages several information to run their business operations that are
required to business information’s as well as taking appropriate and effective decisions. Also, it
can say that management accounting considered as a provision of data that are organised by the
managers for identifying the business performance. All information’s as well as accounts are
managed by the accountant who have proper knowledge to prove the accounts and operates
business operations effectively. The purpose of management accounting is to manage and control
the financial data to attain business objectives. In this report, Alpha Ltd. Is chosen which is a
manufacturing company that produce different kinds of products. Under this report, discuss
about the difference between financial as well as management accounting, types of management
reports and their integration that helps to get business objectives. In addition, this report covers
planning tools as well as financial problems which can be solved by using appropriate
management accounting system.
TASK 1
P1 Management accounting and its essential requirements and types.
Management accounting: It is considered as most important practices of a business entity
which find, evaluate, manage and interpret accounting information’s to operates business
activities in a successful manner. Management accounting termed as an attractive approach that
can be utilised to highly control the information and raise business performance (Weetman,
2019). It is required for all kind of businesses that helps in maintaining all accounts as well as
develop company's productivity as well as profitability. The administrator of Alpha Ltd. Control
all accounting as well as financial information properly that assists to get high profits. All these
are managed by the accountant of a company who keep all the records and make them profitable
through using accounting principles.
Difference between financial and management accounting:
Basis Financial accounting Management accounting
Meaning It is related to the external activities and It is related to the internal activities of

performance of a business entity which is
essential to present to customers,
creditors as well as external parties who
have interest in the company’s norms and
activities.
a business which facilitates
information to manage by designing,
organising as well as managing and
controlling them.
Time focus It is mainly focused on the past
performance that assists to take further
actions.
This is mainly affect business
decisions which are related to the
future.
Concentrate It is concerned with the entire
organisational performance.
It concentrates on the different
segments of business organisations
where several information’s are
collected and managed.
Principle
followed
In this, required to followed the GAAP
principles that helps to perform the
financial accounting appropriately.
There is no standard principles and
rules of management in order to
follow while preparing accounts.
Different types of management accounting system: Cost accounting system: It is associated with price of the goods and services for
analysing the profitability of a company. Cost accounting system is exercised to
approximate the cost of products as well as services that are significant to accomplish
business objectives. It is needed in an organisation as it aids to examine the actual price
of products that are produced by a business (Malina, 2018). It is essential for Alpha ltd. to
recognise that product is more profitable or not, that is only probable through
approximating the value of products as well as services that are facilitating by a
company. Within the context to Alpha Ltd, administrator needs to custom cost accounting
management system to approximate the cost of their producing products that assists to
recognise the net income on such manufactures. Inventory management system: This is extremely associated with handling the inventory
as well as possessing appropriate records of stock. It is necessary to monitoring and
sustain the records of goods that have accumulated by company. Whereas, it is essential