Management Accounting and Importance: Assignment
Added on -2021-02-21
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ManagementAccounting
INTRODUCTIONManagement accounting refer to the presentation of account knowledge and informationin various paths that help the stakeholders to understand and took their decision accordingly. Itincludes daily transaction activities which impact the business and operational functions.Management accounting is beneficial for managers to evolve the strategic and importantdecisions and implement for accomplishing organisational goals. For the better understanding ofthis concept, this report select the Oshodi Plc is a fruit juice manufacture organisation. Currentlyit is involved in manufacturing JOJO fruit juice so manager required all the relevant informationfor the decision making process. This project report cover various topics such as management accounting and importanceof these accounting system. Management accounting report to evaluate employees and businessperformance. Moreover, it undertakes the costing method which helps in determining incomefrom different methods. With help of planning tool, organization able to control their budget andperform accordingly. In addition, company face some fiscal issue that impacts on the businessand operational activities. So how organization able to resolve their financial problems by usingaccounting system. MAIN BODY TASK 1P1It is also called cost accounting which include the process of identifying and controllingvarious activities. All the required information to the manager. It further helps in decisionmaking process where they take necessary action in order to complete organization's goals &objectives. It is the procedure for managing internal operations which helps the administration toimprove their operational efficiency. Below mention accounting system helps the manager totake necessary action for earning more profits by increasing productivity of the juices.(Armitage, Webb and Glynn, 2016). Some of them discussed below: Cost accounting system: This is also called system of costing the product because theyutilized structure for identifying the product cost which further helps in analysing productivity,cost control and inventory valuation. It is essential for the manager to determine accurate cost of1
product and advance decisions will be taken accordingly. In context of the JOJO juices costaccounting system also helps in reducing cost for the whole period of production and try tominimise because lower the cost will provide high profit margin which increase the demand ofproduct as well. This accounting system required to develop requirement of information whichhelps the manager for further decision making process. It further required to analyse managerialbehaviour. Price optimisation model: works as a numerical program that helps an organisation foridentifying the consumer behaviour and purchasing patterns of products. With the help of thismodel, managers are able to examine that how demand will impact as per the different pricerange. It is essentially required to determine product price which meet the objectives of thecustomers. In context of JOJO fruit juices, manager follow these system for analyse suitableprice range for their product that is JOJO fruit juice. It helps in analysing the affordable pricestructure for customer. Inventory management system: This refers to the collection of technological practiceswhich include hardware or software that further helps the organization to maintain theirinventory level. This system provide overall monitoring and maintenance. Inventorymanagement system required by the manager in order to analyse level of stock in the businessbecause it impact the production. In context of JOJO fruit juice manufacturing company,manager required regular review otherwise it impact the production or generate various situationsituation like to reduce unnecessary activities such as raw-materials. (Bobryshev and et.al.,2015). Accounting system required for source of information which help the management to getimportant information. Both cases generate financial loss for the business so this system helps inpreventing these situations. Some types of inventory system are explain as follow: Last In First Out (LIFO): It is the inventory management methods where material usedto record in the pattern of most recent goods used for the production first. Basically, lastordered material out first for production of goods. Manager use this inventorymanagement system to records each item according to the date of purchase and make surethat last ordered item used to manufacture product. First In First Out (FIFO): This system also used to record raw material but in the orderof first in first out. Manager ensure that earlier ordered item will be use first to2
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