Management Accounting Assignment - The Berkeley Partnership
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Added on 2020-10-05
Management Accounting Assignment - The Berkeley Partnership
Added on 2020-10-05
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Management Accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3LO1 .................................................................................................................................................3P1 Management accounting systems......................................................................................3P2 Methods used for management accounting reporting.......................................................5M1-.........................................................................................................................................6D1...........................................................................................................................................6LO 2.................................................................................................................................................7P3, M2 and D2. Calculation of costs for preparation of income statement by using themarginal and absorption costing technique............................................................................7LO 3.................................................................................................................................................9P4 Advantages and disadvantages of different types of planning tool used for budgetarycontrol.....................................................................................................................................9M3 Application of planning tools ........................................................................................11LO 4...............................................................................................................................................12P5, D3 and M4 Organisation are adapting management accounting systems to respond tofinancial problems................................................................................................................12.......................................................................................................................................................15CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................17
INTRODUCTIONManagement accounting is a process of managing the accounts and finance of thecompany to maintain the company financial position stable. Accounting is done by theaccounting department team on the internal bases as it is not regulated by law and rules.Management accounting is very beneficial to the company as they manage the decision makingpower of the employees working in the company. By managing the accounts of the companythey can early identify the problems arises in the company and can prepare a proper feedback toovercome from that problems. For this project The Berkeley Partnership has been selected which involved in offersconsultancy services to variety of businesses. Report will include a brief understanding ofmanagement accounting systems. It also includes the techniques for management accounting.Further it describes the various planning tool such as cash budget, operating budget and Zerobased budget to helps in managing accounts. Lastly it includes the various ways that organisationuses to respond to financial problems in managing accounts. LO1 P1 Management accounting systemsWith the growing organisations and techniques there is a need to maintain the records ofthe company and plan the manufacturing process and sales in by the company. Managementaccounting system is the system which contains recording of the daily data in the organizationand evaluating the weak points in the company (What is management accounting, 2019). Thereis preparation of the statistical data and reports that are used by the company to make the dailydecisions. The management accounting also help in studying the previous data and makingbudget accordingly for the next business cycle (Maas, Schaltegger and Crutzen, 2016). Thebudgets are made at various level to compare the cost incurred and the cost expected to beincurred. Management accounting also helps in the process of financial accounting too as thedata and reports made in the management accounting is used to make decisions on the financialprojects and investment for the product. It includes reports on income and expenses, return oninvestment and sales analysis reports, improving the performance and reduce the flaws in thefunctioning of the Berkeley Partnership. The income and expenses reports are used to balancethe expenses and income through any product. Return on investment reports are necessary to
know the income incurred by the investment made by the company. Sales analysis reports showsthe sales over a period, by the company and take decisions on the future production of theproduct (Cooper, Ezzamel and Qu, 2017).There are different types of management accounting system these are as follows-Cost accounting systems- Cost accounting is the process which is used to estimate theprice of a product in the organisation for the purpose of inventory valuation, controllingthe cost and the profitability of the product so produced. The cost of product is theexpenses incurred on the manufacturing of the product till the product is sold by thecompany The Berkeley Partnership. There are two main components of cost accountingsystem that are- Job order costing and process costing (Chenhall and Moers, 2015).Inventory management systems- Inventory is the stock of finished goods in theorganization. This is a system through which the amount of stock is calculated by themanagers for the purpose of further manufacturing, and making budgets accordingly.Inventory management helps in evaluating the level of goods produced and sold by thecompany so that there is no misuse of valuable resources in The Berkeley Partnership.The inventory is divided in three main categories the are- Raw material stock, work inprogress goods and the finished goods produced by the company. Inventory managementensures that there is no excess amount of goods lying in the storage and on the other handthere is no shortage of goods when needed for sale (Granlund and Lukka, 2017).Job- Costing system- It is a system which involves calculation of cost of the product onthe basis of cost incurred in the production of the product. The cost is then used toevaluate the price of product to the final customers. It also helps in evaluating the costincurred on labour, raw material, and manufacturing expenses by the company TheBerkeley Partnership Price- optimising system- this is a mathematical process which involves the calculationof price on the basis of change in demand on the different price levels of a produc .(Kokubu and Kitada, 2015).The cost and inventory level is used to determine the pricelevel of the product which is more profitable to the company. Thus, there are many ways of managing the accounting process in The BerkeleyPartnership. These systems help in the growth and development of the company by evaluatingand focusing on the problem areas of the company (Nielsen, Mitchell and Nørreklit, 2015).
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