Management Accounting of RL Maynard : Report

Added on - 06 Jan 2020

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ManagementAccounting
Table of ContentsManagement Accounting.................................................................................................................1INTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Concept of management accounting and necessary requirement of various types of managementaccounting system..................................................................................................................3P2 Techniques used for management accounting reporting...................................................7TASK 2............................................................................................................................................8P3 Calculate costs using appropriate techniques of cost analysis concept to prepare an incomestatement using marginal and absorption costs......................................................................8TASK 3..........................................................................................................................................10P4 Benefits and limitation of different types of planning tools used for budgetary control10TASK 4..........................................................................................................................................13P5 Management accounting system to respond to financial problems.................................13CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
INTRODUCTIONManagement accounting is a managerial technique which help the organisation for making such areport which help the manager so that they can enhance the organisation growth and profitability.Management accounting includes all the information, data which are essential to make an effectiveplanning of resources, funds so that manager can estimate the actual requirement of funds and resourcesand utilize them effectively (Wajeetongratana, 2016). In this management accounting, includes all thefinancial and managerial decision which help the organisation's growth. In this research report RLMaynard is taken as a company, which is the UK's largest retailer company. In this report, it describesthe concept of management accounting and also explain the different type of management accountingsystem which are essential in an organisation. It also explains the different methods which are used inpreparing management accounting reports. By calculating the cost by using absorption and marginalcosting method,it will also determine the benefits and limitations of several types of planning toolswhich are used for controlling budget.This report also explain the role of management accountingsystem so that it resolve the financial problem of an organisation.TASK 1P1 Concept of management accounting andnecessaryrequirement ofvarioustypes of managementaccounting systemManagement accounting is also known as a managerial function, by which managers will use themanagerial information, data and facts so that they can analysis there performance and take a correctcourse of action to improve there performance and growth (Vosselman, 2014). Management accountingalso include the preparing of management reporting so that mangers can estimate the actual position offunds and resources and allocate them in appropriate manner where such resources are really required. Inthis way, management accounting involves the decision making, planning and managing perform,andsystem and make an effective control so that organisation's will formulate and implement the strategy toincrease the growth of an organisation.Management AccountingIt is the process of maintaining and monitoring financial data of company in order to evaluate andmeasure business performance on regular basis. It is used by accountant because it clearly demonstratesthe figures of cash, sales revenue, debts, raw materials, inventory variance etc. Further, it is important forRL Maynard to maintaining the record through this system in order to stand out in competition as it willassist the management in understanding the actual position of business in context to all factors like,profitability demand, sales etc. Moreover there are various methods of Management accounting system
which assist the organisation in understanding its business functions and determining performance whichare s follows:Cost Accounting System:It can be used by RL Maynard to estimate the cost of its products andservices which can also help in evaluating profits, cost effective technique and valuation ofcommodities in order to maximize profits and satisfy customer needs and wants.AdvantagesIt is used by firm to make optimum utilisation of resources and to eliminate waste.It used by accountant of RL Maynard to identify and analyse the reasons behind profits and loss.It is the best method which used by enterprise to ensure cost effectiveness in business operations.DisadvantagesThe major limitation of implementing this system is that, it evaluates the reasons and profits onthe basis of past performance of the organisation.It does not even help the entity in solving the problem which has been discovered with the usedof this method.Job costing System:This system is used by R.L. Maynard to value the cost of manufacturing ofproducts according to market demand and competitors. Further, it helps in determining the bestpossible cost which can assist the enterprise in valuing commodities successfully in comparisonto other retailers.AdvantagesIt is beneficial of R.L. Maynard to measure profit from specific job.It is used in the retails companies because it assists in evaluating performance of each individual.DisadvantagesIt requires specific data of organisation for every team and individuals.It does not allocate overhead to finished products.Batch Costing system:In this system the organisation calculates the value of all the productsmanufactured under one batch instead of determining value of individual commodities.AdvantagesIt is used by R.L. Maynard because it assist in controlling the time of processing.It helps in reducing setup and processing cost of products.DisadvantagesIt is time consuming system as it is based on data, storing and bulk process which needs time todata appropriate information.
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