Management Accounting and Systems

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1Explain management accounting and states various kinds of management accounting systems..........3
P2 Explain the different methods used for management accounting reporting........................................3
M1 Evaluate the benefits of various management accounting systems....................................................4
D1 critically evaluate how management accounting systems and management accounting report used in
an organization........................................................................................................................................5
TASK 2.......................................................................................................................................................6
P3 Calculate costs per unit order under absorption and marginal costing..............................................6
M2 Prepare income statement under marginal costing..........................................................................6
TASK 3.......................................................................................................................................................7
P4 Explain advantages and disadvantages of different types of budgetary control..................................7
A) Compute standard costs of PVC sheet and also determine difference between actual and standard
costs.........................................................................................................................................................8
B) Compute materials price and quantity variance..................................................................................8
M3 Analyze the use of different planning tools for forecasting budgets..................................................9
D3 Evaluate how planning tools helps in solving problems of Dell........................................................9
TASK 4.....................................................................................................................................................10
P5 Comparison of Dell with another organization.................................................................................10
M4 Analyze how management of Dell will respond to financial problems in achieving sustainable
success...................................................................................................................................................10
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
Role of management has increases with the increasing competition in the market in which
business will analyses its performance in order to gain benefit. Dell will be selected for the given
project report who intends to use the expertise of management in improving their profitability by
10%. This report is about explaining different tools of management accounting and standard
costing techniques.
TASK 1
P1Explain management accounting and states various kinds of management accounting systems
Management accounting us that steam which enhances the role of management in
handling complex files and various business transactions in the business. Management
accountant are appointed in the business to control the performance of the firm in order to
allocate tasks and duties (Otley and Emmanuel, 2013). It is that specialized service which
enhances the skills and the capabilities of an individual. The control needs to be imposed by an
entity in improving the existing performance of the business in relation to its external market.
The major concern of the management is to reduce its costs by optimally utilizing the existing
resources in the business. There are various ways of management accounting systems helps in
enhancing the overall value of the business which is given as below:
Budgeting- It is common technique used by an entity in order to analyze their performance that
increases the functional requirement of an entity. The current resources are analyzed in order to
predict its performance in the near future. The budgets are prepared in different aspects such as
master budget, expenses and sales budget.
Forecasting- Trend line is that technique commonly used by an enterprise in analyzing the
existing resources in order to predict their future sales. These statistical measures like trend
analysis that analyses which improves the existing business performance of an enterprise.
P2 Explain the different methods used for management accounting reporting
Job costing- This technique is regarded as one of the important aspects of the
management accounting in determining the cost of the products (Renz, 2016). The current
method will be useful for an entity in tracking costs incurred by the business which will be
compared in relation to the sales and the revenue earned by an entity in a particular year. The
major motive of this technique is that standards are prepared in order to enhance the existing
profitability of the business. The transactions are arranged in different jobs to attain all goals and
the objectives in order to gain competitive advantage over its variety of competitors. The
tracking will be easy for the firm as this would help in getting attention of all the customers when
the business will categorize its expenses according to its need in order to earn higher profit by
reducing its existing expenses.

Process costing- This accounting technique is widely used in assessing the existing costing
patterns of all the products currently offered by the company given in the current situation that is
Dell. This costing technique will consider a particular process in which various expenses are
allocates into two different forms such as direct or indirect costs of the total batch of the products
offered to its variety of the customers. In this particular process costs are divided to each and
every singular item. The overall cost of products will get easily find out by determining singular
costs of every item included in the business. In the given case scenario, Dell has uses manual and
electronic process in which sub parts of making computer internally in the same organization tll
the last step of the whole process. Logistic process of passing the finished output from one end
towards the door step of the customers who directly purchases the finished product in form of
Dell computers or laptop. In the end process, the amount of inventory used will be ascertained at
the end of the process of the business enterprise. Total costs incurred by an entity will be
ascertained by determining per unit cost of the product currently in which an entity deals in.
Batch costing- It is that important costing technique which is slightly related with the job
costing in which the selling price of the products are separately calculated for the sake of the
owner (Kaplan and Atkinson, 2015). The sub parts of computers and laptop such as CPU, SMPS,
fan, chip set are all the internal accessories to be used to finish the final output of making of the
whole product like computer and laptop in order to facilitate its variety of customers. Batch
prepared by an entity are like clusters which will includes identical units of all the same products
whose cost per unit are calculated by dividing the total production cost of batch with the number
of units included in the overall batch of that particular products. This method is ideally used in
the industry of engineering component industry and other kind of manufacturing industries
which will be helpful for an entity in order to achieve their desired goals and the objectives.
M1 Evaluate the benefits of various management accounting systems
Cost management- Primary concern of the top management is to determine the cost of an entity
as t is essential in order to earn higher amount of profit. Profit is the basic motive of conducting
the business operations as every owner aspire to accomplish their desired aims and targets by
earning higher profit (Renz, 2016). Cost principles will be followed by an organization which
enhances the role of the business entity in order to achieve the desired goals and the objectives.
Cost will be ascertained by the firm to enhance their current skills by recognizing their strengths
and weaknesses.
Expenses reduction- The daily routine expenses incurred in the business will be reduce by using
working capital which is the basic difference between current assets and the current liabilities.
Management imposes several controls in order to regulate the expenses in the firm to in order to
reduce all the operational expenses. Expenses are firstly sanctioned by the higher authority in
order to pass only important expenses by prioritizing all the expenses into two categories that is
important and less important expenses.