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Added on  2021-02-21

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ManagementAccounting

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management Accounting System:....................................................................................1P2 Management Accounting Reporting:................................................................................3Conclusion and critical evaluation:........................................................................................4TASK 2............................................................................................................................................5P3 Cost and Costing Methods:...............................................................................................5Support of financial reporting and statements to business growth and success:..................10TASK 3..........................................................................................................................................10P4 Budgetary control and Planning tools:............................................................................10Analysis of the use of different planning tools for preparing and forecasting budgets:.......13TASK 4..........................................................................................................................................13P5 Financial Problems and Financial Governance:..............................................................13Evaluation of management accounting in responding financial problems and achievingsuccess: ................................................................................................................................15CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17

INTRODUCTIONIn today's competitive era, managing external affairs is not enough to survive in theindustry, it also requires managing and having control over internal operations and activities. Theframework that has been evolved for this purpose is known as management accounting.Management accounting is an effective process to assess, manage and control the internal affairsof an organization (Qian, Burritt and Monroe, 2018). It is important to study the overall processof management accounting in order to defeat internal core issues.The organization which has been chosen for preparing this report is AstraZeneca PLCwhich is an English-Swedish multinational pharmaceutical company situated in Cambridge,England. The company was established in 1999 by the merger of Astra AB and Zeneca GroupPlc (AstraZeneca PLC, 2019). The other organization which is opted for project B is TPGProcessing which is an American investment company founded in 1992 by David Bonderman,James Coulter and William S. Prince III. This report is including an enhanced knowledge ofmanagement accounting systems and reporting. It is also considering various types of cost andproper use of these costing techniques. It is explaining different planning tools and budgetarycontrol, various financial problems, financial governance and other techniques to solve financialproblems.TASK 1P1 Management Accounting System:Management Accounting:Management accounting is an entire process of assessing,analysing, collecting, summarising, classifying, recording and presenting financial and non-financial data and information so that management can make effective decisions in order tooperate the internal operations of the organization. The process which is also known asmanagerial accounting was come into the existence at the beginning of the nineteenth centuryand was developed to provide assistance to the internal administration to manage and have anemphasis over internal components and operations of company. The main role of managementaccounting in an organization is to prepare and present financial and non-financial data for theuse of management and administration so that they can plan strategies and make decisions forachievement of the organizational objectives and aims in an effective manner. This accounting1

concept has some significant differences from financial accounting concept which are mentionedbelow:Financial AccountingManagement AccountingFinancial accounting is mandatory by the lawtherefore follows a specific format to presentfinancial reports.Management accounting is not statutorilymandate and hence it can prepare reportsaccording to the convenience.Financial accounting reports are prepared toprovide data and information to the externalstakeholders of the organization such as taxauthorities, investors, creditors, etc.Internal stakeholders such as shareholders,owners and especially the managers are theuser of reports prepared by the managementaccounting.Management Accounting Systems: Managerial accounting system is developed to assistthe management in evolving such a process that can derive financial and non-financialinformation and data from the internal operations and activities and provide them for managerialreporting so that administration can plan strategies and make decisions in an impressive mannerand achieve the goals of the company (Puasa, Smith and Milda Amirul, 2018). Some of themanagement accounting systems that are used by manufacturing firms like AstraZeneca aregiven below:Cost Accounting System: This accounting system helps the management in evaluatingthe cost which have been incurred during the entire production. Cost accounting system tracks allthe data related to the products and calculated expenditures absorbed during the manufacturingprocess. AstraZeneca PLC use this system to calculate the cost of their products effectively.Inventory Management System:Inventory is the main source of cash inflow in theorganization hence it is essential to keep an eye on the movement of organizational stock.Inventory management system uses various techniques to have a proper record of inventory fromthe production line to sales and distribution of the products and even after the sales also. It helpsthe respective company in deciding optimum method for evaluation of inventory from;LIFO: Recently manufactured products will be sold first.FIFO: The products which have been produce first must be sold first.AVCO: All the production will be sold at the average cost of production.The AstraZeneca has opted LIFO for inventory evaluation.2

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