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Concept of Management Accounting Systems : Report

   

Added on  2020-07-23

17 Pages5621 Words41 Views
ManagementAccounting

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and essentials requirements of various type of managementaccounting systems......................................................................................................................1P2 Various methods used for management accounting reporting...............................................3M1 Merits of using management accounting system..................................................................4D1 Integration of management accounting systems and reporting with organisational process5TASK 2............................................................................................................................................5P3 Calculate cost using marginal and absorption costing...........................................................5M2 Use of management accounting techniques..........................................................................8D2 Financial reports that apply for interpret business activities.................................................9TASK 3............................................................................................................................................9P4 Advantages and disadvantages of different types of planning tools......................................9M3 Evaluation of planning tools...............................................................................................11D3 Planning tools for respond financial problems....................................................................11TASK 4..........................................................................................................................................11P5 Adaption of management accounting system to respond financial problems......................11M4 Evaluation of financial issues.............................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14

INTRODUCTIONConcept of management accounting is the one which is use by managers for collect datarelated with accounting. This help managers in achieve better control over business operationsand contribute in achieve end goals and objectives in an effective way (Zimmerman and Yahya-Zadeh, 2011). Whether a business is small, medium or large, it is a significant part of everyorganisation. One of the main benefit of this concept is that help firm in execute all operations inan effective way which contribute a lot in success and growth of organisation. This make themanagers aware about current financial position of firm and help in take right decisions relatedwith planning, organising, directing, controlling and resource allocation. Zylla, a small businessenterprise under which less than 50 employees work is taken under this report for study. Conceptof management accounting and requirements of different type of accounting systems in anenterprise is all mentioned under this report. Various methods of management accounting andintegration of business process with this system of management accounting is all given underthis. Further, various methods which an organisation use for calculation such as absorption andmarginal costing is detailed in this. In addition to this, benefits and disadvantages of differentplanning tools is all covered in this report. TASK 1P1 Management accounting and essentials requirements of various type of managementaccounting systemsProcess of preparing financial reports on timely basis which helps managers in take rightdecisions for business is known as management accounting. One of the main benefit of this, isthat help manager in get better control over business operations which contribute in success andgrowth of company (Hutaibat, 2012). Concept of management accounting helps managers inprepare reports related with performance of employees. Collection of right and accurate datahelps managers in execute all business activities in an effective way. Various sources of datasuch as internal and external are all use under this. It is very essential to analyse the collecteddata and communicate the same at different level of organisation. Mainly this concept is relatewith collecting information related with financial aspect of company such as variation take placein stock, raw material and in financial condition of company. Objective of Zylla is achievesustainability and execute all business operations in minimum cost. Concept of managementaccounting also improve financial condition of company. For get all benefits of this concept, it is1

very essential for firm to hire accountant to collect and keep a financial record of businessactivities. Number of problems and issues arise while execute business activities, and managementaccounting is the one which help firm in overcome with these issues and contribute in success ofenterprise (Pimentel and Major, 2010). For achieve its set goals and objectives, Zylla also needto keep and maintain a record of its financial activities. Importance of management accountingsystem can be understood by the points given below:Qualitative data: For execute all business operations in an effective way and to achievecontrol on business activities, it is very important that collected data must be relevant andeffective. Management accounting helps in achieve the same and help in find effectivesolutions of critical business issues. Ongoing training as well as information: It is very important for Zylla to conducttraining programmes for its employees so they can also understand and learn about thisconcept. Provide relevant data: One of the biggest advantage of this concept is that it helpsmanager in collect and analyse relevant information which helps managers in take rightdecision about business activities. Type of accounting systemCost accounting system: This system of management accounting helps managers inestimate the cost of products and services which effective use of various approaches suchas cost control, profitability analysis and many more (JOSHI, and et. al., 2011). Estimatethe right cost is very difficult for firm so all these methods can be use by Zylla to makethe business operations more profitable.Inventory management system: This approach of management accounting helps managerin keep and maintain a optimum level of cost which helps in reduce overall cost ofbusiness operations. Main tools which can be use by Zylla for this are as follows:Just in time approachEconomic order quantity (EOQ)Both these tools help firm in maintain the minimum cost and also help in achieve endgoals and objectives of business.2

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