P4. Advantages and disadvantages of different types of planning tools

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Management accounting and its different types of system...................................................1
P2. Explain different method of management accounting reporting.........................................3
TASK 2............................................................................................................................................4
P3 .Appropriate techniques of cost analysis to prepare an income statement.................................4
TASK 3............................................................................................................................................6
P4. Advantages and disadvantages of different types of planning tools used for budgetary
control.........................................................................................................................................6
TASK 4............................................................................................................................................8
P5. Organisations are adapting management accounting systems to respond to financial
problems......................................................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Management accounting is also termed as an managerial accounting. In this form of
accounting system there are different types of accounts and reports that are required by managers
to conduct their daily basis operations along with making short term decisions. In simple terms,
this system is mainly related with proper monitoring, interpreting and analysing financial data in
well effective manner to frame internal decisions in best effective manner (Adler, 2013).
Management accounting include information in the form of non-financial and financial form.
This acts as an key essential element in an organisation with the help of which financial
transactions can be conducted in well effective manner. In this project formative discussions has
been made on, concept of management accounting along with its benefits. In addition with this
various form of managerial reports in addition with accounting techniques and advantages and
disadvantages are included in this report. Furthermore, to justify different techniques used by
organisations to deal with financial issues, a comparison is made between Capricorn Wealth
Management Brightstar and Financial Limited Company of UK. Lastly, different measures with
the help of which financial issues can be overcome are also included in this report.
TASK 1
P1. Management accounting and its different types of system
Management Accounting:
Management accounting term include combination of two elements management and
accounting. It is mainly a type of accounting system which is mainly linked with business
organisation internal part. With the help of this, managerial decisions can be effectively framed
in best effective manner along with this managerial reports can be made that will directly help in
framing plans and policies. Organisations are not bound to make managerial reports, it is all on
their will to frame that or not. Moreover, this accounting system have their own importance in an
organisation internal framework. Mentioned below there are different types of accounting sytsem
which is described below in descriptive manner.
Cost Accounting System:
This system is one of the crucial element in management accounting structure as this
effectively helps in evaluating cost of products that include, variable and fixed cost etc. in order
to effectively conduct business operations it is essential for an organisation to have proper
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estimation of their products and services cost as this will further aid in analysing and evaluating
products and loss ratio of a product and a service. Organisations by taking advantage of this
accounting system can effectively able to check and evaluate different type of cost related to
financial products and services. It further helps organisation to have proper check on their profit
and loss balance along with financial services and products this will benefit them to focus on
those products and services that will prove more beneficial for organisation.
Cost Accounting System must be practical, simple, tailor-made and capable of meeting
the necessitate of organisations in making more effective plans. The data or information to be
followed by the Cost Accounting System must be accurate or relevant; otherwise it may distort
the result of the system. Along with this, the system of costing must not sacrifice the utility by
presenting meticulous as well as unnecessary details. In this, Management of an organisation
must have a faith or belief in the Costing System and must also give a helping hand for its
improvement and success.
Price Optimisation System:
Price optimisation system acts as an key essential framework with the help of which
organisation can easily able to determine price of services and products which will prove suitable
for organisation as well as for organisation. This will further aid in evaluating consumers review
on different pricing level. Main aim or price optimisation system is to offer factors with the help
of which price can can be set in well effective manner. With the help of this form of accounting
system, companies can effectively set their price at numerous level which further aid in
providing benefits for company along with consumers. In order to set price, Mathematical
calculation is most essential and important which will help an organisation in managing its
transaction in systematic manner. Calculation introduces as an important act of calculating,
which is applying maths as well as logic to figure out a problem.
Job Costing System:
This system in tend towards, proper calculation of overall cost that occurs while offering
services and products in addition with after assignment of cost to every individual unit relating to
product and service. Job costing system effectively helps in those organisations that provide
different types of products and services (Ward, 2012). In order to offer numerous form of
products and services it become essential for organisations to effectively estimate every
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individual unit cost. For this, company can effectively take advantage of job costing system in
order to effectively evaluate and analyse cost of various services and products.
Inventory Management System:
This system is one of the most effective and crucial system in management accounting
system. As with the help of this organisation can able to track status of their products and
services. This further benefits of using evaluate and measure their products and services
availability. Inventory management system proves to be beneficial in supply chain management.
With the help of this management system, companies can track availability of their products and
services and measure status. For instance, in order to effectively track, mortgage loan's
clarification then by taking advantage of this method company can able to effectively check
status of service. There are different system of inventory management such as EOQ, ROP, JIT
etc. All these are essential and effective systems which will help an organisation to manage
inventory and achieve better outcomes within given time duration. In organsations, EOQ is most
effective and essential method which will support an enterprise to analyse how much to buy and
when to buy.
For Example:
Mentioned below there are Six roles of management accounting
Accounting: In this role of management accounting, responsibilities relating to
calculation of profit and loss, financial transactions and expenses are done as to handle
bookkeeping responsibilities.
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