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Management Accounting(MA) Assignment

   

Added on  2020-06-06

13 Pages3590 Words186 Views
Management Accounting

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1A) Management accounting and requirements of management accounting..........................1Difference between financial accounting and management accounting................................1Importance of management accounting information to departmental managers for decision-making....................................................................................................................................2Various Cost Accounting Systems.........................................................................................2Inventory management system...............................................................................................1Job Costing System................................................................................................................1B) Producing financial information........................................................................................2Types of management accounting reports..............................................................................2Information to be presented in understandable manner.........................................................3TASK 2............................................................................................................................................3Preparation of income statements using Marginal and Absorption Costing..........................3TASK 3............................................................................................................................................5Kinds of budgets and advantages and disadvantages.............................................................5Budget preparation process and various costing systems.......................................................7TASK 4............................................................................................................................................7Comparison of management approach of one organisation with other company..................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................8

INTRODUCTIONManagement accounting is much beneficial to managers so that they are able to takebetter decisions. Present report deals with importance of management accounting information inTech (UK) Limited which is engaged in production of special chargers for mobile, telephone andcarry-on gadgets for retail outlets. Requirements of such accounting, various managerial reportsare explained. Moreover, marginal and absorption costing methods are used to prepare incomestatements. Furthermore, kinds of planning tools are discussed along with advantages anddisadvantages. Use of management accounting systems is explained for resolving financialproblems. Thus, such information is helpful for management to take enhanced decisions.TASK 1A) Management accounting and requirements of management accountingManagers are quite benefited by implementing this type of accounting as it helps them totake structured decisions in the best possible manner. Financial information is provided to themanagerial personnel so that they may analyse financial performance and take better decision sothat organisation may be strengthened internally and desired outcome can be generated in themarket by garnering profits .(Ahadiat, 2013).Difference between financial accounting and management accountingFinancial AccountingManagement Accounting1. It is a branch of accounting which takesmonetary transactions and final accounts areprepared.1. This accounting not only takes informationof monetary transactions but non-monetaryaspects are also taken into account andmanagerial reports are formulated.2. Financial statements are to be prepared inaccordance to the format provided byCompanies Act 20062. No format is prescribed by professionalbody and a firm can prepare reports of anyformat as per their requirements.3. Financial accounting imparts detailedfinancials of company on various operationalsegments (Bennett, Schaltegger and Zvezdov,2013).3. Managerial reports are summarised onesabout financial health of firm.1

4. The financials are prepared usually at theend of accounting period.4. There is no specific period to preparemanagerial reports. It is formulated as whenneed arises for the same by management.Importance of management accounting information to departmental managers for decision-makingThe management accounting information is quite significant of departmental managers sothat they may be able to assess performance of units and take better decisions in order to improveupon the same if deviations exist. On the other hand, there are various departments in Tech (UK)Limited which are integrated with one another and required to perform well to inject overallefficiency (Chenhall and Smith, 2011). Finance, marketing, operations, production and HR aresome departments of an organisation. A production unit provides reports in which amount ofinventory needed is listed. This is then provided to finance department to evaluate whetherresources are available to buy raw materials or not. Thus, all the units are interrelated with eachother and performance is measured with much ease and as such, management accountinginformation assists departmental managers of Tech (UK) Limited to take enhanced decisions. Various Cost Accounting SystemsCost accounting is essentially required in the organisation so that costs can be controlledin a better way by reducing expenditures up to a high extent. Cost accounting is helpful to Tech(UK) Limited as it helps to minimise costs incurred in manufacturing mobile chargers and othercarry-on gadgets in effective manner. The various cost accounting systems are listed below-2

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