Management Accounting: Principles and Planning

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Management Accounting
Principles and Planning
Tools for Managing
Accounts

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Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Explaining what is management accounting as well as essential requirements of its various
categories of system of management accounting........................................................................1
P2 Defining certain methods that are implied for management accounting reporting in the
company.......................................................................................................................................4
TASK 2............................................................................................................................................6
P3 Calculating multiple types of costs with the help of suitable methods to generate an income
statement of the company............................................................................................................6
TASK 3............................................................................................................................................8
P4: Identification of benefits and drawbacks related to tools of planning used in company......8
TASK 4............................................................................................................................................9
P5: Compare how organisations are managing the function of management accounting for the
purpose of dealing with financial problems.................................................................................9
CONCLUSION..............................................................................................................................10
REFERNCES.................................................................................................................................12

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INTRODUCTION
Concept of management accounting is seen as a part of organisation which is directly
connected to managing the provisions of the accounting information system and help the
stakeholders in identifying the current financial position of the organisation by managing
different kind of accounts (Qian, Hörisch and Schaltegger, 2018). In relation to the current
report, Airdri Limited is the chosen organisation. It is a medium sized establishment which
manufacturers variants of hand dryers.
Under the current report, there is a discussion about the management accounting in
addition the requirements of unalike kind of management accounting system within the
organisation where the explanation related to method used for management accounting will also
be considered. There is also use of practical illustrations to define the absorption and fixed cost
implemented by the organisation. In the end of the report, there is a discussion about the
advantages and disadvantages of various budgetary control tools as well as comparison between
management systems to respond different financial problems by using two organisations.
TASK1
P1 Explaining what is mmanagement accounting as well as essential requirements of its various
categories of system of management accounting
Definition of management accounting
Management accounting can be definite as a development within organization which is
related to identification and valuation of different accounts to determine the financial position of
the company as well as use the information for management of finance (Gibassier and Alcouffe,
2018). In relation to Airdri Limited, management accounting can be defining as system which
provides a particular process to the organization for recording its different accounts to identify its
current position for achieving the goals and objectives.
As per Institute of management accounting, it is determined that "Management
accounting is that field of management which is related to Management of financial and cost
accounts of the organization which help the management in taking different decisions related to
planning and increasing the performance of the organization. This system is directly associated
with the current position of the organization because it provide the analysis of financial
accounting system of the firm which are prime standard for determining the financial position of
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