Management Accounting and Reporting: Essential Requirements, Methods, and Tools

Management
accounting

Table of Contents
INTRODUCTION......................................................................................................................3
TASK1.......................................................................................................................................3
P1 Management accounting and its essential requirements of different types of
management accounting systems...........................................................................................3
P2 Methods used for management accounting reporting.......................................................5
Task2..........................................................................................................................................6
P3 Calculating costs using suitable methods of cost examination to make an income
statement using marginal and absorption costs......................................................................6
Task3..........................................................................................................................................8
P4 Discuss advantages and disadvantages of different types of planning tools used for
budgetary control...................................................................................................................8
TASK4.....................................................................................................................................10
P5 Differentiate how enterprises are adapting management accounting system to respond
to financial problem.............................................................................................................10
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................13
Books and journals...............................................................................................................13

INTRODUCTION
Management accounting is that function of management which is related to
information of financials resources well as accounting function which help firm in identifying
accounting details of firm. It includes number of function which is related to communication
and management of different aspects of firm.it is slightly different from financial accounting
because it has major focus on controlling the coast of operations (Otley, 2016). This report is
considered on ASDA, where key aspects of firm will be evaluated in terms of management
accounting. ASDA is a British retail super giant which is operating in UK. This firm is
known for its operations and cost effective techniques in business operation. In this report,
there is explanation about management accounting, where different types of accounting
system will be discussed. The method which is used for management accounting reports will
also be identified. There are number of accounting system for calculating coast and analysis
for income statement will be identified. In the middle of this report, there is also discussion of
advantages and disadvantages of different budgeting tools. In the end of this report there will
be a comparison between accounting system to respond the financial system of organtional.
TASK1
P1 Management accounting and its essential requirements of different types of management
accounting systems
Management accounting is a process which is related to giving information to
accountants about the financial account of firm. This is to be done for identification of actual
performance of company e in a direction of its goals. This is also done for decision making
process buy analysis of cost account it which can be helpful in decreasing the product cost as
well as operation cost (Maas, Schaltegger and Crutzen, 2016).
According to institute of management account( IMA) “management accounting is that
profession which includes partnering in management decision making and device planning
for increasing the performance of management system and providing perfect financial report
and control system to manager for assisting the formulation and implementation of
organizational strategy on firm”
Management accounting is that function which has number of benefits and some are
also helpful for ASDA which are mentioned below:
Maximize profitability: Management accounting also helps in maximization of profits
in firm with the help of effective budgetary control and capital budgeting tools which
minimize cost of firm operation and brings effectiveness in work of firm. This all will help
firm in getting advantages and make firm less ordinary in performance of its functions. This
also builds chances for super profit of abnormal profit to organization (Hopper and Bui,
2016).
Increase efficiency: This help firms in getting advantage of increased efficiency this
is because this function help organtional in maintaining organtional activity and increase
performance of employees within firm. As they can control and known the cost which firm is
incurring and maintain function in cost effective manner which leads in increased efficiency
of firm.
Management style: Management style is a particular we which a manager do
accomplish the goals and objectives of the organization number of decisions plants and

organized work which will help a manager to exercise its security within the organization.
Number of factors which changed the management styles which are internal and external
internal factors are policies, priorities and corporate culture within the organization where
external factors are customers, suppliers, competitors, economy and the law where the
organization working (Way, Jimmieson and Bordia, 2016).
Organizational structure: organizational structure is that system which outline how
the all activities within the organization will be directed in order to achieve the goals and
objective of organization it includes number of activity which prescribed the rules and
responsibilities of every individual within the organization the organizational structure also
determine how the information flow within the organization and each level of company. In
case of Asda, company follows centralized structure where all information is in the head of
Central security for higher level of management ( Neubert, Hunter and Tolentino, 2016).
System use in management accounting
Price Optimisation System: It is calculation instrument which is used in management
accounting for identification of proper response to customer by managing different prices of
product. This system help firm in determining the prices of the product according to the cost
implemented on them. the main objective of the system is to maximize the profit structured
product where organisation easily get it cost in product and profit for running its operation
and future growth (Otley, 2016)
Inventory Management System: This is system which includes adequate and perfect
combination of software and hardware with predetermined combination of process and
procedures which are useful to company in monitoring and identifying goods. This also helps
form in categorising all the assets of company in different categories like raw material and
finished goods. This help company in identifying inventory management system using
information for proper arrangement of inventory in organisation where there is identification
of product related information (Armitage, Webb and Glynn, 2016).
Cost Accounting System: cost accounting system is that part of management
accounting which is related to formation of number of cost structure for identification of cost
in share by the firm on manufacturing and other important functions which are related to
product. There are number of charts like revenue chat, sales charts and marginal cost chart
which are formed under this function. This is an important part of management accounting as
it helps finding associate cost of product which form implemented on product for getting the
profit (Malina, 2017).
Job Costing System: This is related to identifying the information about the expenses
and revenues related to some specific functions of organisation and services which are related
to production of a product. The provided information can be helpful for company in
maintaining structure of the job it includes all the expenses related to performance of the
specific task in a given job. These expenses will be evaluated for identifying the cost in care
in performance of job and other decisions related to pricing of product compensation for
labour and many more. This is important part of every company have great impact on profit
identification and calculation of growth for company (Hopper and Bui, 2016).