Management Accounting TABLE OF CONTENTS INTRODUCTION

   

Added on  2020-06-04

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Management Accounting
Management Accounting TABLE OF CONTENTS INTRODUCTION_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Definition of management accounting and requirement of different types of managementaccounting system..................................................................................................................1P2 Methods of management accounting reporting.................................................................3TASK 2............................................................................................................................................6P3 Analysis to prepare P&L by marginal and absorption cost for Unicorn limited..............6TASK 3............................................................................................................................................8P4 Various strategies for budgetary control and their advantages and disadvantages in theUnicorn limited.......................................................................................................................8TASK 4..........................................................................................................................................11P5 Compare the way of company are adapting management accounting system to respond tofinancial system....................................................................................................................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
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INTRODUCTIONManagement accounting is a process of preparing entire reports of management andaccounts that provide accurate and timely financial and statistical information required bymanagers to make day to day and short-term decisions. In the management accounting, managersuse the provisions of accounting content in order to heal their inform themselves. This report isbased on Unicorn limited which is a finance company. In this present report, entire methods ofmanagement accounting and techniques of cost analysis to prepare income statements arecovered. Along with this, different types of planning tools and their advantages anddisadvantages are discussed.TASK 1P1 Definition of management accounting and requirement of different types of managementaccounting systemManagement accounting system is a profession which include partnering in themanagement decision making and that help managers in their daily working and decision. In thissystem, managers usually use the provisions of entire information of accounting for betterinforming themselves before the decision matters (Fullerton, and Widener, 2014). Managementaccounting plays a vital role in the organisation because through it, managers can handle thesituations and solve the issues of employees. Other than that, they will be able in effectivedecision making in the organisation.Types of management accounting system:Management accounting system is very useful in Unicorn organisation but they needdifferent types of this system for making good environment in the business and organisation.There are different types of management accounting system which are mentioned below:1. Cost accounting systemIt is the main and important system in the management accounting. This system is aframework used by organisation to estimate the cost of their goods for profitability analysis,inventory valuation and cost control (Renz, 2016). It is the very valuable system in the businessbecause from it, managers can control their costing and thereby helps in reducing the expenses.A cost accounting system requires five parts that include: an input measurement basis, secondone is an inventory valuation method, a cost accumulation method, a cost flow assumption and1
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last one is capability of recording inventory cost flows at certain intervals. These five parts arethe valuable parts of the cost accounting. It may be noted that many possible cost accountingsystems can be designed from the various combinations of the available alternatives. Its providesdevelopment in the business and the company. An organisation must know that which productsare profitable and which one are not and know that is it correct cost of the product or not. In thebusiness, it is necessary to know about product's costing (Messner, 2016). It is the main factor ofcost accounting for reducing the expenses which are not beneficial for the organisation. Thereare two important cost accounting systems, first one is job order and second one is processcosting. Both systems are very valuable in the business. Job order costing is a cost accountingsystem which accumulate the entire cost of manufacturing for each job. Process costing is a costaccounting system which accumulate the entire cost of manufacturing for each process. Costaccounting system is the very valuable for the business and owner of the organisation.2. Inventory management systemIt is the second important cost accounting system for the organisation. This system isbased on company's entire data which is being collected by the managers. It is the ongoingprocess of moving parts and products into and out of an organisation's locations (Ax, and Greve,2017). Managers manage their inventory on a daily basis. Through inventory managementsystem, company can manage their entire data of sale, purchase, sales return, purchase return anddeliveries. This data may be required in the future and it can be saved in the system, so managerscan easily search, when they need it. This is the very important part of doing business. It is themean by which companies remain sticks with all of the essential goods they need to sell. Whencompany sale their products and services in the market, then this all figure will be saved in theinventory system, so managers can know those figures and make the report of incomestatements. When company manages the inventory system, they face a lot of problem in thesystem. In order to solve the problems and issues of proper inventory management, organisationsoften turn to software that can help them in keeping track of all of their inventory. Thementioned software works according to inventory system and helps company in saving theirdate. Through inventory system, managers can make a report of income statements and knowabout profitability of the business (Williams, 2014). 3. Job costing system2
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