Management Accounting PDF

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Management accounting and essential requirements of different types of management
accounting systems......................................................................................................................1
P2 Various methods used for management accounting reporting...............................................3
M1 Benefits of management accounting systems and their application.....................................4
D1 Management accounting systems and management accounting reporting is integrated.......5
TASK 2............................................................................................................................................5
P3 Costs using appropriate techniques of cost analysis to prepare an income statement...........5
M2 Range of management accounting techniques and produce appropriate financial reporting
documents...................................................................................................................................7
D2 Financial reports that accurately apply and interpret data.....................................................8
TASK 3............................................................................................................................................8
P4 Advantages and disadvantages of different types of planning tools......................................8
M3 Various planning tools and their application for preparing and forecasting budgets.........10
TASK 4..........................................................................................................................................10
P5 Organizations are adapting management accounting systems to respond to financial
problem.....................................................................................................................................10
M4 Financial problems, management accounting can lead organizations to sustainable success
...................................................................................................................................................12
D3 Planning tools for accounting respond appropriately to solving financial problems..........12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting is a provision of financial data as well as advice to firm for use
in company and its development. It is a procedure of preparing management accounts and also
reports which give accurate statistical and financial information needed through managers to take
short-term decisions. Management accounting helps in analyzing costs and operations of
business to prepare an internal financial records, account and report that help managers in
decision making. It is process of determining, measuring, recording and also representing
financial information that is used internally through management for control and decision
making. This present report is based on Airdri organization. It is a manufacturer company and
designs warm air hand dryers, minimize energy consumption, sound levels and reliability have
specifications with Airdri brand. This report will be discuss about concept of management
accounting and also requirements of various kinds of management accounting systems and along
with this management accounting techniques will also be applied (Abdelmoneim Mohamed and
Jones, 2014). Benefits and disadvantages of various types of planning tools used for the purpose
of budgetary control will be discussed in given assignment. There will be discussion about the
different methods used for the management accounting reporting.
TASK 1
P1 Management accounting and essential requirements of different types of management
accounting systems
Management accounting is an act of the making sense of costing and financial data along
with converting that data in to useful information for officers and management in company. It is
provision of non- financial and financial decision making information or data to managers. It is
presentation of accounting information in context to develop better policies to adopted through
managers and also assist the daily activities. It is helpful for management to perform all functions
consisting the planning, organizing, directing, staffing and controlling. Airdri business firm used
to explain accounting methods, techniques and systems with special ability, help management to
perform tasks for increasing profit level (Bovens, Goodin and Schillemans, 2014). It assists in
producing reports for internal stakeholders of company. It is related to use of the gathered
accounting data through cost and financial accounting for preparation of policies, decision
making and control through management. The accounting methods of management help in
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determining the cost incurred in production and inventory management by an organization.
There are various kinds of management accounting systems mention below:
Job- costing system- It is a system for assigning the cost of manufacturing to each
person product while monitoring the expenses. Airdri company can use this system when goods
are to be identical in order to keep track of the order expenses (Chan, Wang and Raffoni, 2014).
It is related with evaluation of cost that included in job performed through staff members or an
organization. The management of Airdri business firm use this kind of system to measure cost of
every task of firm.
Cost Accounting System- The cost accounting system refers to framework used through
companies in order to examine cost of goods for inventory valuation, cost control and
profitability analysis. It is used through Airdri firm to identify actual cost that included in the
process of production. It is helpful in give a detailed information about cost of various
departments.
Inventory Management System- This is a system that tracks finished goods in its entire
supply chain or in its business operation chain, which covers all operations like production to
retail, warehousing to shipping etc. This system assist in better decision making for investments.
Managers at Airdri Ltd. Focuses on the different stages of supply chain with the same objective
of sales at the end and profit to the organization. Inventory management system usually offer
features like bar-coding, inventory alerts, reporting tools, forecasting of inventory, and
accounting tools. These features may vary depending on the company needs and funds. This
method reduces physical audits, time and resources as well as helps in keeping automated
records of the inventory.
Price Optimization system- This system is used to control of resources costs. It is used
in deciding costs of many goods and services at a time (Cooper, Ezzamel and Qu, 2017). This
model is a mathematical system that calculates the variation in demand by the variation in prices,
then combines the collected data with the records of inventory levels to make changes in prices
to improve profit. This system acts advantageous for the companies still underdeveloped or
developing and helps in better decision making. This method at Airdri Ltd. assists in managing
fluctuations in demands, forecasting demand, developing pricing and promotional business
strategies, controlling inventory level, and to develop customer satisfaction.
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