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Management Accounting Assignment Aston Martin

   

Added on  2020-12-18

17 Pages3875 Words411 Views
ManagementAccounting

Table of ContentsINTRODUCTION...........................................................................................................................1ACTIVITY 1....................................................................................................................................1Part A...............................................................................................................................................1LO1: Understanding of Management Accounting System....................................................1P1 Essential requirements and Different types of Management Accounting system.............1P2 Different methods used for Management accounting reporting........................................3M1 Benefits of management accounting system and their applications................................4D1 Integration of management accounting systems and management accounting reporting4Part B...............................................................................................................................................5LO2: Application of range of Management Accounting Techniques....................................5P3............................................................................................................................................5M2...........................................................................................................................................5D2...........................................................................................................................................5ACTIVITY 2....................................................................................................................................5Part A...............................................................................................................................................5LO3: Uses of planing tools used in Management Accounting...............................................5P4. Advantages and disadvantages of different types of planning tools................................5M3. Use of different planning tools and their application for preparing and forecasting budget................................................................................................................................................7P5. Comparison of how organisations are adapting management accounting systems torespond to financial problems................................................................................................7M4. Analysis of how in responding to financial problems, management accounting can leadorganisation to sustainable success........................................................................................9D3. An evaluation of how planning tools for accounting help to solve problems and supportorganisations with sustainable success...................................................................................9CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11

INTRODUCTIONManagement accounting which is also known as cost accounting (Alyousef and Mickan2016). This is the process which help managers to identify cost of production and find ways toreduce cost of production and maximize its profit. It focuses on every field of accounting andgives this information to the management about the operations of business. In this report theengineering company taken for the purpose to study of various task is Aston Martin. AstonMartin is purely in field of engineering and auto mobile manufacturing. With the help of thisreport managers analyse uses of management accounting process and different types ofmanagement accounting system. This reports also gives different methods used for the purposeof management accounting reporting. This report also talks about different types of tools used forplanning the budgetary control and also advantages and disadvantages of budgetary control tools.ACTIVITY 1Part ALO1: Understanding of Management Accounting SystemP1 Essential requirements and Different types of Management Accounting system.Management Accounting: management accounting is a process of preparation ofaccounts and report which help mangers to get accurate position of the company (Bellassen andStephan 2015). It also helps companies to make day to day short term decisions, for this theinformation required by managers are timely financial information and statistical information.Management accounting help mangers to generate monthly and weekly reports which assistsmanagers in decision making process and also these reports are used by the organisation'sinternal stakeholders. Following are some types of management accounting system.Cost Accounting System: A cost accounting system is a system which helps theorganisation to estimate cost of products incurred by company to produces its products (Brierleyand Gwilliam 2017). It also helps mangers to analyse their cost and check its profitability,control its cost and for valuation of its inventory. Mostly cost accounting system helps managersto reduce its cost by analysing the expenses and to cut those expense which are not necessary.Aston Martin also uses this cost accounting system to see the cost of the products. There are1

mainly two types of cost accounting system used in the engineering company the Job OrderCosting and the Process CostingJob Order Costing System: In job order costing system it spreads the cost over theparticular job order (Busco and Quattrone 2015). Which helps the managers to see the individualcost incurred in order to meet that order. This system is used in the Aston Martin as it has to findout the individual cost of each model of the car produced.Process Costing: Process order costing system gives the advantage to the company to findout the cost involved in the particular process (Common 2017). As in the Aston Martin it is veryimportant for the company to see the individual cost involved in different process such asinstallation of accessories, installation of tyres, finishing etc. In the auto mobile industry thereare various different process involved in the production of a car for this the car has to go throughvarious process and it is very essential for the company to record the cost related to differentprocess.Inventory Management Systems: Inventory refers to the stock of the company, stockincludes the raw material, finished good and the stock which is stuck in work in progress(Davila, Foster and Jia, 2015). It is very important for the company to manage their stock. Tomanage the stock in an organisation an inventory management system is used, which gives thebenefit to the company to properly manage the stock in the company so that the storing cost ofthe stock does not increase. It also gives the clear picture of the finished goods which is still inthe showrooms and take some necessary steps to clear those blocked stock. Aston Martin usesthis system to see that how many cars are still not sold and what new techniques can be used bythe company to clear those stock. There are many important functions of the inventorymanagement system which helps the company to create Purchase order if the raw materials isrunning out, this system also provides the function to relocate, receive and dispose of inventorywhich is stuck in the manufacturing plant. There are some benefits of using the inventorymanagement system as it helps the company to improve its inventory accuracy and also toimprove the proper work flow in the company.Price Optimising System: Price optimising system is a system which is mathematicallyprogrammed to calculate that how at the different level of prices the demand for the productvaries (Drake, Roulstone and Thornock, 2016).It is used to analyse the variations in demand and2

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