Management Accounting Report - Nisa Retail Limited

Added on - 06 Jan 2020

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Management Accounting
Table of ContentsINTRODUCTION................................................................................................................................3TASK 1.................................................................................................................................................3LO1.......................................................................................................................................................3P1 Explaining the management accounting & give the essential requirement of different MAsystem...............................................................................................................................................3Essential requirement of different MA system.................................................................................4P2 Presenting distinctive methods for the managerial accounting reporting...................................5M1 Evaluating the benefits of Management accounting systems and their applications in NisaRetail store........................................................................................................................................6D1 Critically examine how MA systems and MA reporting can be integrated with Nisa’sprocesses...........................................................................................................................................6TASK 2.................................................................................................................................................7LO2.......................................................................................................................................................7P3 Cost calculation to prepare an income statement under marginal and absorption costing..........7M2. Apply a range of management accounting technique & produce financial reportingdocument...........................................................................................................................................9D2 Producing financial reports to apply and interpret data for different activities........................10TASK 3...............................................................................................................................................10LO3.....................................................................................................................................................10P4 advantage and disadvantage of different types of planning tools..............................................11M2 Analysis of use of planning tools and application for forecasting budget...............................12D3 Evaluation of planning tools that could be used for solving financial problem.......................12LO4.....................................................................................................................................................13P5 Compare how Nisa can adopt MA systems to respond financial problems..............................13M4 Analysing how MA can lead to resolve financial problems and attain sustainable success....14CONCLUSION..................................................................................................................................14REFERENCES...................................................................................................................................15
INTRODUCTIONManagerial accounting is the procedure of measuring, examining and interpreting theperformance of an organization which aimed at assisting top executives within the firm to makeright decisions. It is different from the financial accounting which purpose is to produce financialreports like income statement, balance sheet and cash flow statement to measure the profitability,financial health and cash position. However, MA can be defined as a process of managing businessoperational metric and covers various aspects such as cost determination, examining managerialreports, forecasting through budgets, variance analysis by finding deviations of actual results withthe targets and many others for making on-time decisions to arrive the defined target goals. Thepresent project report focuses Nisa Retail Limited which is small grocery wholesaler located in UK.It is a private limited organization whose aim is to deliver best quality of retail services andcompetitive food at affordable charges. The proposed assignment will critically examine the role ofmanagerial accounting information as a decision-making tool for Nisa’s success. Moreover, thereport will also present an in-depth evaluation of MA systems with the advantages anddisadvantages and cost determination through marginal and absorption costing for reaching for thequalitative decisions.TASK 1LO1P1 Explaining the management accounting & give the essential requirement of different MA systemTo: General Manager, Nisa Retail Store LtdFrom: Management Accounting officerDate:7thApril 2017Subject:Management accounting (MA) and Management Accounting system (MAS)IntroductionThis report will introduce the management accounting role and importance for the Nisa retailstores along with the various types of MAS that it can use for the objective of making goal-orienteddecisions.Management accounting: It consists of preparation, delivering and analysis of the financial& statistical information to the executives, managers and directors, so that, they can handle short-term managerial decisions, devise planning & manage business performance. In Nisa retail store, itis the accountability of the managers to administrate, supervise, monitor and control theirdepartmental functioning (Bhimani and et.al, 2013). MA provides them relevant or needed
accounting information which assist them in strategy formulation & implementation as well. Now-a-days, in the competitive challenging world, many-times, managers have to make big decisionspromptly, which cause difficulty for them in analysing and interpreting the data, therefore, they useMAS to get the required data quickly and examine it for making suitable decisions for the growth.Cost accounting system: It is essential for the company to estimate their product andservices cost accurately (Saladrigues and Tena, 2017). As its name, the system enables Nisa retail’smanagers to identify the right cost of their retail goods, identifying its trend, inventory &profitability analysis and making decisions for the cost-control.Job costing system:It refers to the process of accumulating various cost information thatbelonged to a particular job (Fullerton, Kennedy and Widener, 2013). It is mainly helpful to providecost information to the consumers for their order placed. It allows Nisa retail store to quote theirgoods prices after adding a reasonable return.Inventory management system: This software enable corporation to track their inventorylevels for the ordering and delivering purpose to satisfy their consumer base. With the help ofmanaging stock to a right level, Nisa can place order on-time for having adequate inventories in thewarehouse to maintain their stock level.Price optimisation:This MA system helps retailers to identify that how their clients willrespond at distinctive prices of the goods and services, so that, managers can set right prices tomaximize their operational return (Quattrone, 2016). More importantly, in retail sector, it seemsessential for the marketers to figure out the impact of change in their goods prices on the marketdemand in order to fix an optimum price.Essential requirement of different MA systemRelevant information: Every departmental manager of Nisa retail store i.e. finance,purchase, sales, marketing, production need relevant information about their cost, revenues andoperational efficiency for performance measurement and interpretation and thereby makerationalized plans and decisions (Romano, 2015).Reliability and accurate information:CAS, IAS, JCS and other management accountingsystems must provide reliable & accurate data to the managers. It is because; manipulated data maymislead the decisions and bring serious harm.Time-updated:MA systems must render up-to-date information so that comparativeanalysis can be made over the years to devise better policies and plans for the organizationalprogress.
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