Management Accounting Part 2

Management Accounting
Part 2
Table of Contents

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1: Costing method used by an organisation.........................................................................1
1.2: Wide range of management accounting techniques........................................................3
1.3: Interpretation of data gathered from income statement...................................................3
TASK 2............................................................................................................................................4
2.1: Merits and demerits of using planning tools use in budgetary control...........................4
2.2: Analysis of Expenditure for July and August.................................................................5
2.3: Purpose and cash budget.................................................................................................5
TASK 3............................................................................................................................................6
3.1: Use of accounting system to examine financial issues....................................................6
3.2: Analysing financial issues faced by UCK furniture........................................................7
3.3: Evaluation of planning tools which is used in management accounting.........................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management accounting is an essential aspect for every profit motive business organisation.
The primary motive of an organisation is to uses an effective management control systems that
can provide company to increase better chances of growth in near future time. The primary
motive of manager is to make use of appropriate tools and techniques that can assist in providing
more valuable outcomes to the company. This particular part of project report is providing more
specific position of UCK group plc. Certain effective types of costing method are discussed
under this report that is use for evaluating net profitability for the company. Advantage and
disadvantage of using planning tools are explained under this report. All the financial issues that
are being faced by company are illustrated under this project more clearly (Amoako, 2013).
TASK 1
1.1: Costing method used by an organisation
In any business, costs are essential aspects that are needed to be taken into consideration.
The primary motive of every financial manager is to arrange valuable capital for the company
(Brewer, Sorensen and Stout, 2014). A business can raise capital from various sources such as
equity and other important sources. The capital is invested in various projects of the company in
order to produce sufficient amount of product and services to the company. Costing is the
systematic process of evaluating total cost a company is investing over the production of good
with the available amount of capital. The management evaluate appropriate amount of capital to
select best suitable option which would be able delivery more effective outcome for the company
during the period of time. Cost of capital is the value of amount paid in order to attain something.
These costs are either directly or indirectly associated with the production process in more
beneficial manner. There are various types of costs those are associated with the company. Some
of them are discuss underneath:
Absorption costing: According to this particular cost which is applicable over production
of products and services during the time. It consists of both variable and fixed costs because of
which they are known as full costing method (Absorption costing, 2018). It has been seen that
there are plenty of benefits that is provided by using this particular method. While at the same
time, it is having certain demerit. This cannot be considering effective techniques for making
upcoming decision.
1