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Management Accounting [PDF]

   

Added on  2021-02-19

16 Pages5255 Words47 Views
MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1. MAS and its types.................................................................................................................3P2. Various methods of management accounting reporting. .....................................................5M1. Benefits of management accounting systems......................................................................6D1. Management accounting system and reporting are integrated within the organisationalprocess.........................................................................................................................................7TASK 2............................................................................................................................................7P3. Income statement with the use of costing techniques...........................................................7M2. Management accounting techniques for producing the financial reports............................9D2. Interpretation of financial reports.........................................................................................9TASK 3..........................................................................................................................................10P4. Benefits and drawback of planning tools............................................................................10M3. Planning tools for preparation of budgets..........................................................................11TASK 4..........................................................................................................................................12P5. Difference between the companies to overcome from the financial issues with use ofmanagement accounting systems..............................................................................................12M4. Management accounting to overcome from the financial issues.......................................14D3. Planning tools to response against the financial problems.................................................14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16

INTRODUCTIONManagement accounting is a part of accounting that is associated to systematicarrangement of qualitative and quantitative information of the companies in the form of internalreports (Songini, Gnan and Malmi, 2013). These reports are very crucial for internal stakeholdersof the companies, specially for managers and board of directors. This is so because on the basisof it, they make further plans and policies. One of the key feature of management accounting thatmakes it different from other accounting is that it consists both kind of information includingfinancial and non financial. For the purpose of understanding the management accounting“James & Juices Ltd.” company has been chosen. This company is engaged in the production ofJOJO juice. In the project report, MAS is defined along with its essential requirement of differentsystems. As well as management accounting reports are also included with the preparation ofincome statements under absorption & marginal costing methods on the basis of given data.Additionally, planning tools of budgetary control and role of MAS in overcoming from financialissues is also mentioned in a descriptive manner.TASK 1.P1. MAS and its types.The management accounting is a system of gathering, analysing and interpreting thefinancial and non financial information to produce the internal reports (Myers, 2013). It consistsvarious kind of reports such as:Cost accounting system: Cost accounting system used by the managerial accountants inorder to calculated the cost of production, cost analysis and reduction in cost. Usuallypeople think that cost accounting is management accounting but it is just a part ofmanagerial accounting which is only related to cost of production and evaluation of profitmargin. This system helps in ensuring co-operation in building cost accountingstatements which helps the management in ascertaining appropriate cost of production.Management team of James & Juices Ltd adopt this accounting system so that it may becapable to evaluate the cost of its products and fix its profit margin. This system alsohelps in improving the quality of the product according to the customer requirements andavoiding ineffective costs which reduces cost and increase profit margin.

Price optimisation system: Price optimisation system is a tool that analyse the customerbehaviour and reaction regarding different prices of different products (Campanale andCinquini, 2016). This system helps in analysing the fluctuation of demand with differentlevels of prices. In this system, a cost model and price model is created for a particularproduct and it presented to customers. After studying the customers reaction on differentprices, the best price which is suitable for the company as well as customers is fixed asthe product price. This system is used by the respective firm so that it can opt out theoptimum price set for its juice products with maximum profitability and customers canbe satisfied as well by classifying the consumers in different groups. Product quality andits life cycle can be increased with the help of price optimisation system.Job costing system: Job costing system is used by the management in order to find out thecost of a specific job, task or unit. This costing method is mostly used when eachproduced unit has specific significance from other units. This costing method is similar tothe contract costing technique but has minor differences. The inventory produced underjob order, can not be calculated under cost accounting or inventory management systemtherefore this costing system has been evolved. The administration of James & Juices Ltdadopted job costing system to analyse and examine the cost of its products which aremanufactured for different age groups. This system is also helpful in measuring theefforts of the employees in order to achieve the job order objectives.Inventory management system: For a manufacturing company like James & Juices Ltd,inventory is the major source of its revenue hence proper record and management ofinventory is very crucial. Inventory management system helps in order to get thisobjective (Bradbard, Alvis and Morris, 2014). This system helps the management intracking each and every movement of goods presented within the firm. It has a detailedknowledge from purchase of raw material to goods available in the warehouses andshowrooms. It also includes the information of goods that is shipped to delivery, onconsignment or returned from the customers. With the use of this system, managers arecapable to choose the best valuation method for the inventory available in the warehouse.This management system aids the management team in solving the queries of thecustomers regarding products and also aware in context with shortage of inventory with

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