Management Accounting: Methods, Techniques and Tools

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Management accounting and essential requirements of systems..........................................1
P2. Different methods of management accounting reporting......................................................2
TASK 2............................................................................................................................................3
P3: Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs...........................................................................3
P4: Explain the advantages and disadvantages of different types of planning tools used for
budgetary control.........................................................................................................................8
TASK 4..........................................................................................................................................10
P5: Comparison of organizations...............................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management Accounting refers to the use of a wide range of methods and techniques
through which the organizations are able to ensure that they can attain their goals and objectives
by properly managing the financial data, facts and information in the right manner (Golyagina
and Valuckas, 2020). It is quite important that the use of Management Accounting is made by the
organizations for the particular purpose of taking of important decisions which can be quite
useful in managing the different types of needs and requirements in a proper way. Management
accounting is related to presenting information to forecast inconsistencies within finances in
order to make rational decisions to maximise profits together with minimise losses. For the
presentation, Prime Furniture is selected company which is a growing London Based
organisation. It is making plan for starting training courses for new internes.
The report covers definition of management accounting and essential requirements of
each management accounting system. It also highlights methods which are used by businesses in
management accounting reporting. The report highlights key management accounting techniques
for preparing income statement. It also explains usage of multiple planning tools in budgetary
control. At last, comparison among organisations in aspect of adapting management accounting
systems for the purpose of responding to problems related with funds are discussed.
TASK 1
P1. Management accounting and essential requirements of systems
Management accounting is defined as practice for recognising, measuring, evaluating,
interpreting and exchanging information about financial aspects to top management with pursuit
to goals of entity. In Prime Furniture, purpose which management accounting serve is to guide
users internal to business in well informed and rational decision making. Role of management
accounting in Prime Furniture is to conduct relevant cost analysis with the hope of determining
current expenses along with giving suggestions about future practices. It also plays role of
creating financial plans for any type of organisational undertaking related to financial department
(Johnstone, 2020).
Management accounting system could be described to internal systems of entity which
provides critical information to top managers for operational decision making. Prime Furniture is
a type of manufacturing entity that opts management accounting systems for costing addition to
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