Management Accounting and Control Integration
Added on 2020-06-04
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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1PART A...........................................................................................................................................1P1 Management accounting and necessity of different types of system.....................................1P2 Methods used for management accounting reporting............................................................3P3 Calculation of cost and prepare income statement using marginal and absorption costing. .4M1...............................................................................................................................................7D1................................................................................................................................................7M2...............................................................................................................................................8D2................................................................................................................................................8PART B............................................................................................................................................8P4 Advantages and disadvantages of planning tools for budgetary control...............................8P5 Usage of management accounting system to respond to financial problems......................10M3.............................................................................................................................................11D3..............................................................................................................................................11M4.............................................................................................................................................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................12
INTRODUCTIONManagement accounting is a profession which deals with financial terms andhelps managers in decision making process by providing accurate information. In fact allthe monetary terms and theories comes under this category which is used byorganization while estimating their future cost (Abrahamsson, Englund and Gerdin,2011). Basically this field is responsible for managing capital of a company as well astrying to reduce loss. Nero limited is a software company in UK having number ofbranches due to which they require proper management of their budgetary system torun their business smoothly. This assignment is segregated into two equal weight-agefor describing the necessary elements of finance for example various types ofaccounting system, methods of calculating cost etc. Furthermore, it also highlightedbenefits and drawbacks of tools which is used by organization while planning processfor controlling the budget of an organization. Lastly, report also shows usage ofmanagement accounting system in resolving various financial issues.PART AP1 Management accounting and necessity of different types of systemAccounts are associated with the collection of data, recording it to the books ofaccounts and summarised in order to make a proper financial statements for acompany. All those informations are controlled and managed through applying effectiveplanning, controlling techniques. This assist the businesses entity to make moresustainable and reliable for the coming time (Albu and Albu, 2012). Managementaccounting provided business a base to plan the set objectives in more proper manner.It mainly associated with controlling cost which are incurred during production processof products. Some of the important techniques are lean accounting, traditional costingand transfer pricing. The accounting and managements are inter-connected with each other in orderto take effective decisions regarding the growth and stability of the company'sperformances. For any company its financial positions are the main aspect to makeinvestment. It would present a complete images of a company the whether they are ableto meet out its short and long term goals. In NERO, Ltd company, they are dealing in1
various electronic items such as mobile phones, internet and other board band facilities.They required a perfect accounting system to manage and control their financial data.So that they business would continued into the right direction in which they wants tooperate. The main reason company's wants a perfect system is to get a perfect resultsand on time (Becker, Ulrich and Staffel, 2011). So that their necessary planning can beimplemented in order to expand their business. A appropriate planning can alwaysoriginated through a well organised accounting system. It is done so in order to achievegroup goals as well as organisation goals. While, implementation of right techniquesand updated technology the company financial transactions are recorded and managedproperly. Some to the accounting systems are:Price optimisation system: It is considered to be an important accountingsystem which is used in the NERO, Ltd company to control its operationalactivities. It is related with the concepts that price is the most sensitive aspect forthe customers, which are decided by the company according to the capacity ofcustomers interest (Bennett, Schaltegger and Zvezdov, 2011). The companyneed to analyse that whether customers are comfortable for the price which areset for the product and services are fulfil the need of them. The reaction of thecustomers towards various product prices are analysed through this system.Inventory management system: In this system, the management of stocksavailable with the company are analysed and controlled. The managers andconcern departments are work according to the proper utilisation of company'sresources so that effective results can be achieved. There are various toolswhich are used in order to do control inventories. Such as EOQ and ABCanalysis.Cost accounting system:It is necessary to evaluate those costs which areused under the production process by the organisation. This is mainly emphasisnot only related with the costs but to manage the expenses (CallahanStetz andBrooks, 2011). There are some costing techniques which can be helpful in orderto control the costs. Such as normal, standard and actual costing.Job costing system:- According to this process there are numerous of jobwhich are essential to be performed in an organization. Therefore it is essential2
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