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Different Types of Management Accounting

Added on - 08 Dec 2020

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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION..........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and different type of MA systems.............................................1P2: Management accounting report........................................................................................4M1 Management accounting system's benefits regarding organization prospective.............6D1: Integration of management accounting systems and management accounting reporting6TASK 2............................................................................................................................................6P3 Cost using appropriate techniques of cost analysis to prepare an income statement........6M2 Techniques of marginal costing and absorption costing for proper documentation.......8D2 Report contains for interpretation of data.........................................................................8TASK 3............................................................................................................................................8P4 Planning tools for budgetary control.................................................................................8M3 Use of different planning tools for Airdri limited..........................................................10D3 Planning tools which helps in handling financial issues................................................10TASK 4..........................................................................................................................................10P5: Comparison of organizations adopting management accounting systems.....................10M4: Assistance of management accounting in solving financial problems and leading tosuccess................................................................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONManagement Accounting system exists as internal part of company i.e. used to evaluateand measure its process for manage of company. Managers uses accounting information forprepare internal financial report, accounts and records for achieving business goals. Airdri wasfirst hand dryer manufacturer in world to get quiet mark from disturbance of moderation society(Caglio and Ditillo, 2012).This report covers management accounting and different types of managementaccounting system. It will apply on Airdri Limited to describe of different methods ofmanagement accounting reporting. Marginal and absorption costing methods are used tocalculate profit or loss for organization. Advantage and disadvantage of budgetary control toolsused in budgetary control budgets discussed in this report. The financial problems of anorganization and uses of management accounting system illustrated with practicalimplementation.TASK 1P1 Management accounting and different type of MA systemsFrom: Management Accounting OfficerTo: General Manager of the Airdri limitedSub: Different Types of management accounting systemINTRODUCTIONManagement accounting is the proposal of accounting information in order to describingpolicies and activities. It helps the management to assist all it's function such as planning,organizing, staffing, directing and controlling. It also analyze the operations and business costfor making reports after helping to achieve business goals. In another words, it is act of makingmeaning of costing data, translating financial data into useful information for officers andmanagement within a company. Management accounting is also called managerial accountingand cost accounting.MAIN BODYDifferent Types of management accountingThere are many types of management accounting system and their role in combinationwith many organizational process related to Airdri Limited are discussed. Types of management1
accounting are as follows -Job Costing SystemA job costing system is the process of collect information aboutcost with a specific service job or production.This information may be provided in order tosuggest cost information to a customer according a contract where cost are recompense(Nielsenet and et. al., 2015).The providing information is also useful to quality of a company'sapproximation systemwhich should be capable to quote prices that allow for a reasonableprofit. These information used for delegate inventoriable cost in manufacturing goods. A jobcosting system is following three types of information -Direct materials –The job costing system must be able to track scrapped and cost ofmaterial that are used for course of the job. If materials remaining and returned to warehouse sotheir cost less from job and after that returned to storage.Direct Labor– Direct labor appointed to a job with time sheet, time card and with timeclock (networked) on a computer system.Overhead –The job costing system in overhead include cost such as depreciation,building rent and production equipment to pool costs etc. In the end of each accounting period,total amount is applied on various open jobs for allocation methodology. Airdri limited can usethis system of management accounting when products are known to keep track to expenseorder. They apply this job costing accounting procedure such as -Receiving inquiry –customer afraid about price of material, quality of material and timefor complete order.Estimate price of job –A accountant through job costing know customer preference andtaste.Order receiving -After assurance of customer, order will be placed.Production order –This helps to manage the orders received for particular productiondepartment.Cost recording –This cost recording in production process record every estimationcost.Completion of job –After completion of report, it is submitted to accounts department for finaljob costing and compared with estimated cost.Price Optimizing system– Price optimizing system is used for mathematical analysisby an organization to control and determine prices of resources. Price optimizing system is also2
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