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Management Accounting and Essential Requirements

Management Accounting assignment on concepts and techniques for decision makers.

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Added on  2023-01-10

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This study report discusses various elements of managerial accounting in the context of Innocent Drinks, including the essential requirements of management accounting systems, management accounting reports, and the usage of cost analysis techniques to prepare income statements using marginal and absorption costing.

Management Accounting and Essential Requirements

Management Accounting assignment on concepts and techniques for decision makers.

   Added on 2023-01-10

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Management
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Management Accounting and Essential Requirements_1
Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Management accounting and essential requirements of management accounting systems...3
Management Accounting Reports:.........................................................................................5
Evaluation of benefits of explained MA systems:..................................................................6
Integration of management accounting system and report within organisational process:....6
TASK 2............................................................................................................................................7
Usage of the techniques of cost analysis to prepare income statement by using marginal and
absorption costing...................................................................................................................7
Accurately apply a range of management accounting techniques and produce appropriate
financial reporting documents:...............................................................................................7
Interpretation of above data:...................................................................................................7
TASK 3............................................................................................................................................8
P4 Advantages of different planning tools used for budgetary control..................................8
Analyse the use of different planning tools and their application for preparing and forecasting
budgets ..................................................................................................................................9
TASK 4..........................................................................................................................................10
Adoption of management accounting systems to respond financial problems ...................10
Contribution of management accounting in sustainable success of the organisation while
responding financial problems.............................................................................................10
Application of planning tools to respond financial issue along with attainment of sustainable
success .................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
Management Accounting and Essential Requirements_2
INTRODUCTION
Management accounting regards to term that involves an evaluation of inner management
enterprise practices that enable efficacious decision - making. This generally include the use of
accounting guidelines to establish finance and qualitative information that further assist in the
effectual controlling of entity's functions resulting in the achievement of objectives within a
set time-frame. This generally also classify as the cost-accounting which helps to assess
operating expenses and further assist in the compilation of annual results and represent the
operation of the organizational units of the corporation (DRURY, 2013). The study report
consists of comprehensive discussion about various elements of managerial accounting in
context of Innocent Drinks which is a corporation that produces smoothies and drinks offered in
supermarket chains, coffee houses as well as other stores. The corporation sells around above
two million of smoothies per week.
The study discusses the theory of managerial accounting and the basic requirements of
its various systems, the specific management accounting reporting approaches and the use of
acceptable cost analysis approaches in the preparing of marginal vs absorption costing income
statements. The study also goes on to discuss the benefits and shortcomings of multiple planning
tools within the context of budgetary controlling and application to MA systems for making
respond to various fiscal issues.
MAIN BODY
TASK 1
Management accounting and essential requirements of management accounting systems
Introduction: The managerial accounting involves the formulation of several types of
framework that help to maximise the performance enterprise and produce relevant
information for decision-making. The various systems that are configured in MA
mechanism are namely cost accounting, inventory management, job costing, price
optimisation etc. With the systematic implementation of MA mechanism and its frameworks, the
company needs to reinforce decision-making in order to produce predefined performance.
Management Accounting: This pertains to the approach of determining, recognizing,
interpreting, presenting and sharing financial reports in the fulfilment of targets of the entity.
These are often referring as the cost accounting (Management Accounting. 2018). Here ' key
Management Accounting and Essential Requirements_3
distinction among financial accounting vs management accounting is management accounting
information is meant to allow administrators in an entity to making decisions, while financial
accounting designed to provide information to the entity's external stakeholders in an enterprise.
Management accounting systems: They are the mechanisms that the managerial
personnel use to collect statistics about the true operating capability of the various divisions of
the corporation. The various types of systems that are usually designed by upper management of
the company involve cost accounting, , stock management, job-costing system, price-
optimisation system etc. The core role that management of the entity seeks to execute by an
overview of the knowledge collected from the various accounts comprises planning,
coordination, monitoring and managerial decision-making (Chiu, Teoh and Tian, 2012). Here
below are certain systems which Innocent Drinks can apply, discussed below:
Price-optimisation System: Generally, a corporate entity's price optimization system is
being used to address the pricing models of the related goods along with approaches to
statistical analysis. With the implementation of such pricing measures in Innocent Drinks,
decision-makers of a corporate organization can effectively determine their current price
plans for products in line with new marketing scenarios. By applying this price-
optimisation system, company would be capable to develop major growth plans to
increase the existing level of income together with the fulfilment of the related
organisational goals.
Cost accounting system: This another significant system which considerably used in
case of Innocent Drinks in attempt to recognise and quantity aggregate production costs
incurred with assistance of thorough evaluation of multiple costs accrued towards each
stage in production of final product. This system require a controlled classification of
costs and allocation of costs to different aspects of organisation (Eierle and Schultze,
2013).
Inventory management system: This is most efficacious system which reduce the
managerial efforts towards management of wide array of inventories. This system require
detailed information and reports of multiple inventories including relevant classification
of each single inventory item. This system primarily offers assistive frameworks for
managing and handling of inventories. This facilitates managing officials with actual
Management Accounting and Essential Requirements_4

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