Management Accounting

MANAGEMENT
ACCOUNTING

Table of Contents
TASK 1.......................................................................................................................................................3
Management accounting and the essential requirement of different types of management accounting
systems....................................................................................................................................................3
Different method used for management accounting reporting.................................................................4
Benefits of management accounting systems..........................................................................................5
Integration of management accounting system and management accounting reporting...........................5
TASK 2.......................................................................................................................................................6
Income statement as per marginal costing and absorption costing...........................................................6
TASK 3.......................................................................................................................................................9
Explaining the advantages and disadvantages of different planning tools of budgetary.........................9
control.....................................................................................................................................................9
Analyzing the usefulness and application of different planning tools...................................................11
TASK 4.....................................................................................................................................................12
Different types of management accounting systems available for resolving the financial....................12
problems...............................................................................................................................................12
CONCLUSION.........................................................................................................................................14
REFERENCES..........................................................................................................................................15

INTROUCTION
Management accounting is the process of analyzing the cost of business and assist in
preparing internal financial report. This assignment will provide understanding about the
different types of management accounting systems. Moreover, it consists of different methods
used for management accounting reporting. It also evaluates the benefits of management
accounting systems. It also includes the different types of planning tools used for budgetary
control. Also, it will assist in providing information regarding the management accounting
systems which helps in responding to the financial problems.
TASK 1
Management accounting and the essential requirement of different types of management
accounting systems
Management accounting assists in preparing the internal report on the basis of which the
organization is able to make the decision for improving the future performance and profitability.
It assist in allocating the cost and identifying the ways in order to reduce the cost for increasing
the profitability of organization (Kaplan and Atkinson, 2015). The management accounting is
the way the organizations able to manage the internal accounting of the firm and helps in
reducing the cost in order to achieve the goals and objectives of organization. With the help of
identifying the cost of the process the management accountant is able to provide the organization
the reports on the basis of which the firm can take decision which will be profitable for the
business in future. There are different types of management accounting systems which are as
follows :
 Inventory management system: It is the management accounting system
through which the organization is able to manage the level of inventory which
will helps in reducing the wastage and also the cost of the organization will be
reduced. It helps in identifying the level of inventory which is required in the
organization and can assist in providing the firm with the benefits and cost of
maintenance of the inventory is also minimized.

 Cost accounting system: It is the system used in the organization in order to
estimate the cost of their product in order to determine the level of profitability an
control the cost for the future which will help in increasing the profit margin
(Quattrone, 2016). It helps in controlling the cost by allocating the cost in the
effective and efficient manner.
 Job costing system: It is the process of allocating the cost to the specific job in
order to identify the profit associated with that job. It will assist in identifying the
cost of every job and the information regarding them.
Different method used for management accounting reporting
Management accounting reporting assist in identifying the performance and profitability
of the firm on the basis of which he organization is able to make decision for the future. With the
help of this report the firm is able to make forecast for the future and can determine the strategies
which are required to be formulated in the organization in order to improve the profitability and
performance in future. The following are the different reports which are being prepared by the
management accountant.
 Budget reports : This are the reports which are being prepared by the management
accountants in order to make forecast for the future on the basis of which they are able to
determine the future performance and profitability of the firm and can also take the
decision for improving the performance and profitability. It consist of case budget report,
operating budget report, sales budget reports etc.
 Account receivable aging report: It is the reports which is prepared by management
accountant in order to know the customers that have taken credit for the amount payable.
It also assist company in taking the decision regarding limiting the credit limit in order to
reduce the bad debts which affect the credibility of the firm and also the firm profitability
is affected to a great extent (Otley, 2016). It helps in tracking the customers and the
balance which not payable by them. This report assist the firm in making the effective
decision for improving the credibility of the firm and receiving the payment by customers
on time in order to reduce the bad debts.
 Cost report : The cost report assist in allocation of the cost to the different products
manufactured by the organization. With the help of cost report the firm is able to identify