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Management Accounting- Excite Entertainment Ltd

   

Added on  2020-11-12

16 Pages5310 Words235 Views
Management Accounting
Management Accounting- Excite Entertainment Ltd_1
Table of ContentsINTRODUCTION................................................................................................................................3MAIN BODY.......................................................................................................................................3LO 1......................................................................................................................................................3P 1. Explaining management accounting system and its essential requirements.................................3P 2. Analysing different methods for management accounting reporting...................................6M 1. & D 1. Benefits of management accounting system along with their application in organisation.................................................................................................................................7LO 2......................................................................................................................................................7P 3. Calculation of Marginal and Absorption Cost of Excite Entertainment Ltd........................7M 2. & D 2. Management accounting techniques for producing financial reporting documents.8LO 3......................................................................................................................................................8M 3. Analysing use of planning tools in budget forecasting and preparation...........................11LO 4....................................................................................................................................................12P 5. Explaining the adaptation of the management accounting systems in resolving the financial problems....................................................................................................................................12M 4. & D 3. Financial problem resolution and its impact on organisation success..................13CONCLUSION..................................................................................................................................14REFERENCES...................................................................................................................................15
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INTRODUCTIONManagement Accounting is defined as a process of preparation of business reports, statements,accounts with the help of available business, statistical as well as financial information. It is amechanism of analysing all the business operations so as to prepare internal report which aids themanagement in decision making process. The present report is based on Excite Entertainment Ltdwhich is conducting its business operations in UK related to leisure and entertainment industry. Thereport will discuss the concept of management accounting and how it differs from financialaccounting. It will define the different management accounting system and methods used formaking of management accounting report. Also, it will assess the Absorption as well as Marginalcosting for Excite Entertainment Ltd along with its interpretation. This report will define differenttypes of the budgetary planning tools with its advantages and disadvantages. At last, the report willdisclose that how management accounting system can assist company in solving its financialproblems.MAIN BODYLO 1P 1. Explaining management accounting system and its essential requirements.Management Accounting is defined as the process of monitoring, identifying, evaluating,measuring, interpreting, and communicating all the business and financial information to themanagers of the company for successful attainment of business organization goals and objectives. Itis considered as a mechanism of preparing internal reports, records and statements on the basis ofstatistical and financial information of the company (Kaplan and Atkinson, 2015). ManagementAccounting assist the manager or the management of the company in making crucial businessdecision related to the expansion, investment etc. It also helps the company in formulation ofbusiness plans and strategies which supports the goals and objectives of the company.Difference between Management Accounting and Financial AccountingBasisManagement Accounting Financial AccountingMeaningThe term management accounting is asystem which provides all the necessaryas well as relevant information aboutthe company's business operations toFinancial Accounting is defined as aone of the accounting system whichprovides focus on the preparation offinancial as well as income statement of
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the managers for formulation ofbusiness plans and strategies for smoothfunctioning of the business in a costeffective manner (Maskell, Baggaleyand Grasso, 2016).the business organization to provide allthe crucial financial information to itsend users for making investment relateddecision.ObjectiveThe main objective is to provideassistance in the planning and decisionmaking process of the management ofthe company by providing detailedbusiness as well as financialinformation.Financial accounting providesinformation related to the financialtransaction of the company to theinvestors and other stakeholders (Pratt,2016).ReportsIt includes preparation of the internalmanagerial report of the company.It prepares the financial report of thewhole company which depicts about thefinancial position of the company.UsersInternal as well as external users.Internal users includes the managementof company whereas external comprisesinvestors, suppliers, creditors,government, customers and otherstakeholders as well.Consist of only internal users i.e. Themanagement of company.Different types of management accounting system available to Excite Entertainment Ltd are as follows:1.Cost Accounting System – The cost accounting method of management accounting systemis defined as a framework or mechanism which can assist Excite Entertainment Ltd or anyother business firm in making estimation of cost factor or cost associated in carrying onbusiness operations including production or manufacturing of its products. This methodhelps company in analysing the profitability level as well as cost expenditure, inventoryvaluation and its management. It also assists in controlling the cost expenses to be incurredin carrying on productions or other business operations (Klychova and et.al., 2015). ExciteLtd can make rough estimation about the cost of producing a product will yield profitablesituation or not. Cost Accounting system can be of two types:Direct Cost – The direct cost is defined as a cost price which is directly associated with
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