Management Accounting System of Unicorn
17 Pages5260 Words37 Views
Added on 2020-07-23
Management Accounting System of Unicorn
Added on 2020-07-23
ShareRelated Documents
MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1 ..........................................................................................................................................1P1 Different kind of management accounting systems...............................................................1P2 Methods for management accounting reporting ...................................................................3TASK2.............................................................................................................................................5P3 Comparison between marginal and absorption costing.........................................................5TASK3.............................................................................................................................................9P4 Merit and demerit of different kind of planning tools which are used in budgetary control.9P5 Adoption of management accounting systems for responding financial problems ............11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14.......................................................................................................................................................15
INTRODUCTIONA process where different financial data is recorded and analysed in termed asmanagement accounting. It is very popular is modern era because it assist in making short aswell as long term decisions which can help an organisation in achieving their mission and vision.It support all the department of an enterprise by giving them appropriate advice so they can findtheir flaws and deliver better results. Unicorn is a company which is operating in groceryindustry. They sell organisation food and other eatables in Manchester, England. This file willdiscuss about various kind of systems of management accounting. Different method of reportingwill also become part of this report (Ward, 2012). Planning tools, their merits and demerits,which are used in budgetary tool will get cover under this assignment. Comparison of adaptionof management accounting in order to face financial problems will be included in this project. TASK 1 P1 Different kind of management accounting systemsThe main reason for adopting an accounting technique in an organisation is to recordvarious types of data so managers can use them in upcoming time for planning their futureactivities. With time the some major improvements happened in this filed and companiesintroduced management accounting in their enterprise because it assist them in reduction cost oftheir business operations and support them in finding the areas which can help them in earningmore profits. This system play significant role in making long term decision which has eitherdirect or indirect connection with organisation's vision. Normally people think that it is onlyrelated to finance division but this perception is wrong because this technique assist in otheractivities like monitoring risk, formation of business strategies etc. Management accounting isimportant for other departments like human resource, IT and production. It is involved in day today operation of a company and analyse current trends as well as cash-flow (Parker, 2012). An enterprise has option to adopt any kind of accounting system, it depends on their needand way of doing business. Management accounting also has many advantages anddisadvantages. It can help a small firm in locating the areas where they can reduce their cost,they have limited finds so it is very important for them to management their money properly andinvest them in right direction. This will also stop them from moving in wrong direction which isa common mistake done by small and new businesses. This system can also provide them1
significant assistance in managing their cash-flow appropriately so they by predict their futureexpense and income. If they will has a clear picture of these two important elements of businessthan they can do optimum utilisation of their available resources. This will help them intriggering the useless expenditure which can be invested in other areas (Renz, 2016). One of themajor disadvantage of this management accounting technique is that its installation is bit costlyso it can not be adopted by every organisation. Necessary requirement of various kind ofmanagement accounting method is as follows:Inventory management system – This process focuses on quality and quantity of stock.It is involved with planning of various arrangements which are essential for timely deliver ofgoods. Inventory is managed in a way that the cost of keeping the stock goes down and problemsrelating to under or over stocking minimises. It can be done by using a software, but smallorganisations like Unicorn groceries can also adopt manual method because they do not needexpensive soft-wares as their area of operation is very limited.Cost accounting system – This process concentrate on minimising the cost of businessso company can increase their profit in long run. Profitability analysis is its essential part wheremanager compare the expenditure they will do on an activity and the return it will deliver in a setperiod of time (Fullerton, Kennedy and Widener, 2014). Valuation of inventory and controllingof cost are other areas where this system focuses. Job costing technique – It is generally used when an organisation produces differentproducts so they try to determine their cost either on the individual basis or by allocating cost toa batch. For example a small firm like Unicorn can adopt this in their company because it willhelp them in bifurcation the cost of various organic item which they are selling in their outlets. Ifthey were selling similar or only one commodity than they could prefer process costing but theyproduce variety of products. Price optimisation – In this system an organisation try to find an appropriate price whichcustomers are ready to pay and company is happy to sell goods on that value. This can be doneby analysing market and expenditure incurred in production. If they charge more money for aproduct than its demand will go down, if they sell it at less price than the revenue which theycould earn will decrease. This system help in determining a price of a commodity which isfavourable for both sides. An enterprise can make quality goods but if they do not adopt correctmethod of pricing than they can face severe losses. It can become main reason for failure of an2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Report on Management Accounting System - DOClg...
|18
|5628
|27
Assignment on Kinds of Management Accountinglg...
|13
|3905
|47
Management Accounting Assignment (solution)lg...
|13
|4201
|180
Management Accounting Report - Unicorn Grocerylg...
|23
|5074
|47
Planning Tools and Management Accounting Systems for Financial Planninglg...
|13
|697
|39
Report on Management Accounting and Systems - Taj Storeslg...
|18
|5503
|95