Management Accounting: Systems, Tools, and Financial Problem Solutions

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Management accounting system and their requirement..............................................................3
Different methods of management accounting reporting............................................................4
LO2..................................................................................................................................................4
LO3..................................................................................................................................................8
Explaining uses of different planning tools that are used in management accounting................8
LO 4...............................................................................................................................................11
Comparing the different management accounting system used in order to meet the financial
problems....................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Management accounting is defined as analysis and evaluation of the financial information
in order to take the management decisions for the betterment of the company (Otley, 2016). The
present report is based on company GSQ limited which is a manufacturing company located in
UK. The report will discuss about different management accounting system along with their
application and advantages and disadvantages. Further the report will apply some management
accounting tools in order to calculate the cost. Next the discussion will highlight the different
planning tools which the company can use to manage the budgets. In the end some management
accounting system will be discussed and how they help company in dealing with financial
problem will be outlined.
LO 1
Management accounting system and their requirement
The management accounting system are different types of system which help the
company in order to evaluate the performance of the company with help of financial accounting.
There are many different types of accounting system which GSQ Ltd can use in order to attain
their objectives which are as follows-
Cost accounting system- This is a system which is used by GSQ Ltd in order to ascertain
the cost of producing the product or services. This is very necessary for the company to ascertain
the cost because of the fact that in this cost only the profit margin is added and then charged to
consumers. This system is applied in GSQ ltd in order to calculate the cost of per unit production
and this is done with help of different tools like lean accounting, marginal costing and many
other different types.
Job- costing system- This is a system under which cost is charged to every job separately
in order to ascertain cost of every job. The whole production includes different types of job and
every job has its own particular cost which need to be assessed separately. This costing is applied
in GSQ for estimating the individual cost of each and every job separately.
Price optimising system- This is a system which help GSQ Ltd in order to calculate the
demand for the product and services at different price levels and what will be the response of the
consumers at all these different levels of price (Maas, Schaltegger and Crutzen, 2016). This
system is applied in GSQ for estimating its profit at different types of prices in the market.

Inventory management system- The inventory is the most important part in the
manufacturing company like GSQ ltd because without inventory no work can be done. Thus, it is
very necessary for GSQ ltd to manage the inventory on time and this will assist the company in
completing manufacturing process on time (Quattrone, 2016). This include application of some
software which assist the company in managing their inventory on time do that the
manufacturing process can be completed with efficiency and effectiveness and on time as well.
Advantage of management accounting system- The use of different management
accounting system is very advantageous for GSQ because of the reason that these systems help
in proper planning and organizing for the business and its development. These management
accounting systems help GSQ in improving all the business activities and this assist the business
in building coordination among all the different business areas. Hence. This result in the
development of the business as a whole and not focusing on a single issue (Dekker, 2016).
Different methods of management accounting reporting
There are a variety of different types of management accounting reporting which helps
GSQ in reporting of all the information relating to management of business activities.
Budget report- This is a report in which all the estimated income and expenses are
recorded and management try to actually incur that much only. This will assist GSQ ltd in order
to make some estimation for all the possible income and expenses and to compare it with past
records.
Performance report- This is a type of report which is prepared by GSQ in order to
evaluate the performance of each and every individual. This help company in knowing the areas
in which company need to improve and the areas which are good.
The management accounting report is integrated with organization process because this
will enhance the process within the organization (Hopper and Bui, 2016). This is because of the
reason that all these reports will help organization in deciding all the major decision for the
betterment of the company.
LO2.
Absorption costing- It is the method that accumulates costs attached with the process of
production and apportioning them to an individual product. It is the type of costing which is