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Management Accounting - Pavestone Assignment Sample

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Added on  2021-02-20

Management Accounting - Pavestone Assignment Sample

   Added on 2021-02-20

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Management Accounting - Pavestone Assignment Sample_1
Table of ContentsINTRODUCTION...........................................................................................................................3ACTIVITY 1...................................................................................................................................3Management Accounting Systems:.............................................................................................3Management Accounting reports:................................................................................................4Benefits of management accounting system:..............................................................................5Evaluation of manner of integration of systems and reporting within process of businessentity:...........................................................................................................................................6Costs using appropriate techniques of cost analysis to prepare an income statement usingmarginal and absorption costs:....................................................................................................6Interpret Financial reports prepared and data for a range of business activities:......................11ACTIVITY 2.................................................................................................................................11Explanation of different planning tool used for budgetary control...........................................11Comparison of manner by which organisations are using management accounting systems torespond financial problems:.......................................................................................................14Analysis of the way in which management accounting lead to respond financial problems....15Use of planning tools to respond financial problems:...............................................................15CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
Management Accounting - Pavestone Assignment Sample_2
INTRODUCTIONManagement accounting defines as a process to analyse business costs and operations, forpreparing the internal financial report and records. This would help managers of a company intaking proper decisions related with achievement of business objectives. Along with this,management accounting also aid in making sense of costing data by translating the same intouseful information for managing the business (Plumb and et.al., 2017). The present report isgoing to describe the concept of management accounting and its role in managing a company.Here, different reporting methods are also analysed to get internal business information and itsuses in managing the cost of production. For this purpose, Pavestone Company of UK has beentaken that deals in small level and manufacture as well as trade the concrete products to otherconstruction companies. It uses the concept of management accounting techniques like planningand contingency tools, in order to respond future financial issues. ACTIVITY 1Management Accounting Systems:Management accounting considers as an important concept in a business that helps inanalysing present situation and forecast the future condition also, on the basis of internalanalysis. It facilitates the information to managers of a company in making appropriate decisionsfor increasing effectiveness of business (Hilton and Platt, 2013). For this purpose, it helps inmaking record of overall fiscal transaction and other activities that includes financial and non-financial data. Pavestone Ltd. deals in construction business and offers products like buildingmaterials, paving, paver stones and more, to other builders on reasonable rates. This companyuse management accounting system to determine number of labours used for manufacturing anddelivering its products to right customers (Hopper and Bui, 2016). It also forecasts the inventoryneeds to reduce expenses and complete demand of marketplace on time. Along with this, toincrease the performance of business, this company uses a number of management accountingtools such as inventory management, cost accounting, job costing and more, as explainedbeneath:- Job costing system - It is used to allocate costs in production due to diversify productrange which are entirely different from each other (Stein and et.al., 2015). It mainlyfocuses on assigning costs as per classified jobs and batches to improve efficiencies of
Management Accounting - Pavestone Assignment Sample_3
production. For better assessment as well as accountability, Pavestone Ltd. can applyprocess costing method instead of batch costing for increasing efficiencies of itsproduction cost. Price management – It is generally used for analysing how demand of customersfluctuate with change in price of products. As Pavestone deals with constructionmaterials therefore, any fluctuations in price will directly impact on its supply anddemand. It also helps in analysing factors that impact on price strategy of company, sothat concrete materials can be offered at better price on competitive rate. Cost accounting – This system is mainly designed to keep track the inventories flowduring each stage of production (Turban, Volonino and Wood, 2015). Hereby, respectivecompany can assess the viability of different project by applying cost accounting systembecause it provides a fixed cost structure, through which annual financial budget can beplanned. Along with this, Pavestone can also use this system to record productionactivities as well, for keeping stock available in inventories to fulfil demand of customerson time. Inventory management – This system can help Pavestone in specifying the shape andmanner of placement of stocks as per consumer demand. For minimising the inventorycost, it is required by management of this company to precede the regular as well asplanned course of stocks at each location of a supply (Nielsen, Mitchell and Nørreklit,2015). As this company manufacture concrete materials, therefore, to handle the storageof these products, it can adopt the concept of FIFO i.e. first in first out. It helps inminimising cost of stock handling and storage by giving priority to sale products whichare manufacturing first so that quality of them can be managed. Management Accounting reports:Managerial accounting reports generally used by small entrepreneurs to monitortheperformance of company during an accounting period, so that necessary actions can be takentimely to improve the same (Leitner, 2013). As per dependence on type of project and its timelimitation, Pavestone Ltd. can prepare reports in terms of monthly, quarterly, weekly or evendaily basis. Hereby, reporting method will help in circulating the precious informationthroughout entire management chain by proper communication, so that top managers can take
Management Accounting - Pavestone Assignment Sample_4

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