Management Accounting and Reporting: Essential Requirements and Methods

Management
accounting

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
TASK1.......................................................................................................................................3
P1 Management accounting and its essential requirements of different types of
management accounting systems...........................................................................................3
P2 Methods used for management accounting reporting.......................................................5
TASK2.......................................................................................................................................6
P3 Calculating costs using suitable methods of cost examination to make an income
statement using marginal and absorption costs................................................................6
TASK3.......................................................................................................................................7
P4 Discuss advantages and disadvantages of different types of planning tools used for
budgetary control...................................................................................................................7
TASK4.......................................................................................................................................9
P5 Differentiate how enterprises are adapting management accounting system to respond
to financial problem...............................................................................................................9
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11
Books and journals...............................................................................................................11

INTRODUCTION
Management accounting refers to a process which is related to identification of
different cost which is implemented by Organisation in order to generate the revenue
(Azudin, A. and Mansor, 2018). It include appropriate system which is based on the current
requirement of organisation where it audit financial reports statements and accounts in order
to analyse them and using them for benefits of organisation. Under the current report, it is
based on study of Unilever. It is a global organisation which is performing and business
environment of UK. Companies operating in various kinds of products and services which
may include healthcare, beauty products and many other. In relation to the current report it is
based on discussion about management accounting. In beginning of this report, there is
discussion about various kinds of management accounting and its tools. Along with this,
there is also discussion about various management accounting reports and their advantage to
organisation. In middle of this report, there is a discussion about different financial statement
as well as practical illustration of absorption cost. In last, it consist discussion about various
factors of management accounting and budgetary tools used in financial planning along with
identification of particular business situation and how organisation deals with them.
MAIN BODY
TASK1
P1 Management accounting and its essential requirements of different types of management
accounting systems
Management accounting is that part of accounting system which is related to
accounting of various management systems and identification of them in order to identify the
cost and revenue which are projected from the working of organization. It acts as an essential
part for every organization because it provides assistance to the management in observing the
cost and implementation of various strategies. This is also useful and managing different
function and providing assistance to stakeholders in order to identify the current business
position (Drury, 2018).
According to institute of management accounting "management accounting define
that part of management function with related to audit of different financial accounts of

organization in order to meet the financial obligations and identify the current financial
position of the firm. It is that part of business activity which enables organization to identify
appropriate pricing policy by analyzing different financial accounts and performing the
function to operate business in a effective way".
Management accounting is beneficial for organization in different aspects. Unilever
can also avail the benefits of management accounting. Some of these benefits are discussed
below:
Helps in profit maximization: Management accounting is directly linked to
profitability of organization and performing its function in an appropriate manner. Under the
management accounting concept, organization use different benefits and system which enable
form to perform. In order to evaluating the current position of organization in identify various
processes which are involved in the development of production. This will help the
organization in using appropriate function and managing dysfunction according to the
requirements and whose profitability (Hopper and Bui, 2016).
Increase efficiency: Management accounting within organization is also useful in
increasing the efficiency of firm and managing its function in an appropriate manner. This is
because it helps in identifying the system which are based on the current business
environment as well as analyzed the cost which is implemented by the organization on
different production services. This will help in utilizing the accounts of different individuals
and analyzing the performance which can be used to boost the profitability.
Different systems under management accounting
Inventory management system: Inventory management system is an essential part of
management accounting which is helpful to the organization in achieving its objective and
performing the function in an appropriate manner. This is helpful to the management of the
organization in order to identify the requirements and perform the function according to the
current needs. There are number of options which are used under the inventory management
system by Unilever. This is helpful to the manager in analyzing appropriate system and
functioning in a better way. Unilever follower varied product line which makes it compulsory
for organization to use appropriate inventory management system under the management
accounting. This enables manager to divide the products in three categories which are raw
material, finished well and semi process good.