Management Accounting

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management Accounting Systems........................................................................................1
M1: Benefits of Management Accounting Systems....................................................................3
D1: Critical evaluation of management accounting systems and reports....................................3
P2: Management accounting reports............................................................................................3
TASK 2............................................................................................................................................5
P3: Calculation of costs...............................................................................................................5
M2: Application of various types of techniques and producing of financial documents............6
D2: Producing of financial reports for analysis and interpretation..............................................7
TASK 3............................................................................................................................................7
P4: Planning tools used for budgetary control.............................................................................7
M3: Analysis of use of planning tools.........................................................................................9
TASK 4............................................................................................................................................9
P5: Comparison of ways in which organizations adopt management accounting systems to
respond to financial problems......................................................................................................9
M4: Analysis of response to financial problems........................................................................11
D3: Evaluation of planning tools for accounting.......................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Management Accounting is a process which is used in accounting and it enables the
managers to apply financial provisions in an effective manner so that they are able to achieve the
distinct goals and objectives of the organization through the taking of different types of short-
term and long-term decisions (Al-Mawali and et.al., 2018). It can be applied in the different
processes of the company which allows them to be able to bring more efficiency and
effectiveness. This allows them to raise the overall profitability level. This report is based on
Innocent Drinks. It is a company which provides smoothies and juices to the various customers
in the market. In this assignment, detailed focus will be made on management accounting
systems, a range of its techniques. Additionally, the use of planning tools and comparison of
ways in which firms use it to solve financial problems will be discussed as a part of this project.
TASK 1
P1: Management Accounting Systems
Management accounting is a tool which can be used to assist the management so that
they are able to achieve better planning and control in the organization (Management
Accounting, 2020). There are various systems which can be used in it. These are explained as
follows-
Cost accounting system- This is used by the organizations so that evaluation of various
types of costs can be done in an effective manner (Amir, Rehman and Khan, 2020). There is a
requirement for Cost Accountants to make the use of it so that they are able to achieve the
various types of goals and objectives. In Innocent Drinks, its use will allow the firm to be able to
segregate the costs and overheads. Also the use of appropriate techniques can be made so that
significant reduction can be made in them to facilitate maximization of profits.
Essential requirements-
 This system should allow the organizations must be able to analyse the overall
profitability level in an effective manner. This will help the management of Innocent
Drinks to be able to analyse the profits effectively and efficiently.
 This system must also enable the firms to be able to value their level of stock and ensure
cost control in the organizations. Thus in this way the managers of Innocent Drinks will
be able to identify the requirements appropriately and reduce the costs.
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Inventory management system- In the organizations, this system is quite helpful for
ensuring that the level of stock is properly and effectively managed (Borker, 2016). With its
help, the managers can ensure that they are able to identify the way stock can be managed in an
appropriate manner. The management of Innocent Drinks therefore should make its use so that
they can identify the costs of managing inventory and apply different techniques to reduce them.
Essential requirements-
 This system should allow the managers to make the use of systems like LIFO, FIFO etc.
to be able to track and manage the movement of various types of items. In this way it can
help the management of Innocent Drinks.
 With the use of this system the management can ensure that they make their inventory
processes more better. The managers of Innocent Drinks will be benefited in this way.
Job costing system- For the organizations, the use of thus system is very helpful in
ensuring that the various job costs are identified properly (Coad, Jack and Kholeif, 2016). If the
managers make its use effectively and efficiently this will make sure that the job costs are
reduced and the profits are enhanced. Thus the managers of Innocent Drinks must use it to bring
more efficiency and effectiveness in the management of job orders.
Essential requirements-
 This system should help the management to ensure that detailed job costs are identified
effectively and efficiently. In this way, Innocent Drinks will be able to assess the job
costs in an effective manner.
 The use of this system should help the managers to be able to improve the overall job
performance. Thus this will benefit Innocent Drinks.
Price optimization system- The management makes the use of this system so that it is
able to use various types of models and assess the price to be used in an appropriate manner (Dai
and et.al., 2017). Thus here the managers of Innocent Drinks will be able to ensure that they
select the right price for earning higher-level profits in the future time period.
Essential requirements-
 This system have different types of mathematical models which can help the management
to be able to forecast the data in an appropriate manner. This can ensure that Innocent
Drinks is able to set right price.
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