Management Accounting - Case Study of Agmet
20 Pages6546 Words197 Views
Added on 2020-01-16
Management Accounting - Case Study of Agmet
Added on 2020-01-16
ShareRelated Documents
MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1Explain management accounting and give the essential requirements of different types ofmanagement accounting systems.................................................................................................1M1 Evaluate the benefits of management accounting systems and their application withinAgmet..........................................................................................................................................3P2 Explanation regarding different methods used for management accounting reporting.........4D1 Critical evaluation about how management accounting systems and managementaccounting reporting is integrated within organisational processes............................................6TASK 2............................................................................................................................................8P3 & M2 Preparation of income statements as per the method of absorption and marginalcosting techniques........................................................................................................................8D2 Interpretation of the data and information which have been calculated above in thestatements of income under absorption and marginal costing techniques.................................11TASK 3..........................................................................................................................................12P4 Advantages and disadvantages of different types of planning tools used for budgetarycontrol........................................................................................................................................12M3 Analysis over the use of different planning tools and their application for preparing andforecasting budgets with special reference................................................................................12D3 & M4 Evaluate how planning tools for accounting respond appropriately to solvingfinancial problems to lead organisations to sustainable success...............................................14TASK 4..........................................................................................................................................15P5 Compare how organisations are adapting management accounting systems to respond tofinancial problems.....................................................................................................................15CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
INTRODUCTIONManagement accounting can be considered as a technique though which management ofany enterprise can easily manage their available resources(Renz, 2016). As a small businessenterprise Agmet is having less resources whether in terms of financial or in terms of nonfinancial sources. Hence it is important for such enterprise to manage their sources for attainingthe objectives of the enterprise which are predetermined by its managerial personnel’s includingtop level management. This report has been framed on the case study of Agmet which is achemical manufacturing company in United Kingdom (Gibassier, 2017). Its employing less than50 employees and they are having less £500,000 hence it can be said that they need to employtechniques of cost and management accounting in its financial and organisational structure. Inthis report the concept of cost accounting have been defined with their essential requirements.Further there are two statements as per the method of absorption and marginal costing and suchstatements are presented with there interpretation.TASK 1P1Explain management accounting and give the essential requirements of different types ofmanagement accounting systemsManagement accounting can be referred as the combination of both financial accountingconcepts and managerial principles. Hence it can be said that Agmet and its management throughoptimizing the principles which are there in cost accounting can achieve the goals and objectiveswhich are there in the organisational structure since from beginning and the short term goalswhich are there in current period. As short term goals can only contribute towards the managingthe long term goals and objectives (Quinn, 2011). There are many essential requirements ofmanagement accounting as same as financial accounting hence it can be said that just likefinancial reporting frameworks management accounting is also having certain requirementswhich needs to be fulfilled so that the users can get the clear image of the company so that theycan make their decisions in respect of it. It have the combination of principles and data whichmakes it reliable and the plans which are framed according to it are also ethical and achievable.Because of it the managers and employees will not get frustrated in achieving the targets whichare determined by the top level management. Agmet can abolish the competitive factors out ofthe chemical manufacturing market (Ibarrondo-Dávila, López-Alonso and Rubio-Gámez, 2015).1
It allows firm to capture a major market share within the targeted market. The essentialrequirements of management accounting techniques are mentioned below:Traditional Accounting system: This can be defined as the system in which cost isallocated among the various departments which are accountable for such cost and price. Throughthis requirement cost can be easily traced with its responsible department further it can be saidthat the revenue of each and every department in the manufacturing units of Agmet can be tracedout easily (Pipan and Czarniawska, 2010). Lean Accounting System: This system is actually deals with the changes which arethere in management and systems. Hence it can be said that when there is a change in the capitaland organisational structure then lean accounting system can be helpful to cop up with suchchanges. Cost accounting system: It is a system which helps business to evaluate the cost ofgoods and services provided by the company in order to measure profits, also known as productcosting system. Agmet can make use of this system and calculate its cost and can evaluateprofits, for preparing financial statement. The company can compute production cost separatelyfor each operation by the help of such accounting system. Job costing system: It helps in collecting information about cost related with specificjob. With the help of this system, Agmet can submit required cost information to its customerunder contract where costs are refundable. Business can also keep a check over accuracy ofestimating system, which helps to quotes prices for obtaining targeted profits. This helpscompany to evaluate the expenses incurred on direct materials, direct labour and overheads.Batch costing system: It is specific order costing, which evaluates the cost in batchesalso includes fixed and variable costs. Company can compute per unit cost by dividend the totalbatch cost by number of units produced. For instance, when company receives order and thereare common products among several orders, the production can be done in batches and with thehelp of these system, Agmet can identify total cost on each batch performed.Inventory management system: It is a software system, which keeps a record ofinventory levels, sales and various orders placed in a reporting year. The company can keep arecord of work orders, bills of material and production to avoid overstock. This will assistAgment to calculate inventory of raw material, finished products and work in progress to manageinventory level. 2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Management Accounting - AGMETlg...
|17
|5402
|89
Management Accounting Systems & Techniqueslg...
|20
|5703
|222
Management Accounting System of Agmet Company : Assignmentlg...
|18
|5183
|402
Report on Management Accounting - Doclg...
|17
|5725
|171
Management Accounting - Agmet company Assignmentlg...
|17
|5466
|107
Management Accounting System for Financial Problemslg...
|17
|4969
|110