Management Accounting in Rowlinson Knitwear

Added on - Dec 2020

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ManagementAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and need of various types of accounting systems..........................1P2 Methods used for management accounting reporting............................................................3M1 Benefits and applications of management accounting systems............................................4D1 Critical analyses of accounting reporting system..................................................................5TASK 2............................................................................................................................................5P3 Calculation of costs and net income using marginal and absorption costing........................5D2 Interpretation of data.............................................................................................................8TASK 3............................................................................................................................................8P.4 explanation about different type of Planning tools used for budgetary control with theiradvantages and disadvantages.....................................................................................................8M3 Applications of planning tools of budgetary control...........................................................9D3 Evaluation of planning tools for accounting respond appropriately to solving financialproblems to lead organizations to sustainable success................................................................9TASK 4..........................................................................................................................................10P5 Comparison on how organisations are adapting management accounting systems:...........10M4 Analyses of financial problems..........................................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONManagement accounting is considered as a core activities at the time of managing firm,this involves different techniques as well as system for preparing the reports for manager andsome other documents. As this shows the organisational fiscal position that assist investors andanother related individuals for accessing the exact records and reports of management (Banerjee,2012). For this report, the chosen company is Rowlinson Knitwear which is a leadingmanufacturer and generally sells the schoolwear, corporate wear and so on. It apply thetechniques of cost analyses such as absorption as well as marginal costing so that their they canprepare profit and loss accounts. The purpose of this report is to describe the managementaccounting and requirements of different kinds of accounting system. Methods that which isutilise for reporting management accounting. Advantages and disadvantages if various planningtools types used in budgetary control. Apart from this companies are compared in order toresponds towards financial problems are also mentioned in this report.TASK 1P1 Management accounting andrequirements of different accounting system typesManagement accounting can be called as amethods of formulating the managerial aswell as select various data from that documents in order to examine, understand and present datain perceivable manner(Burritt, Schaltegger and Zvezdov, 2011). Management accounting andfinancial accounting are both the different terms and management accounting includes widerscope than the financial accounting as well it also includes the finance related issues.Rowlinsonis known as the fastest growing manufacturer in UK that applied systems of managementaccounting for improving its methods of making decisions. For an effectual managing companymany systems of management accounting are used are mentioned below:Different kinds of management accounting systems and its requirement intobusinessSystems of management accounting are considered as process for analysing andrecording in order to gather knowledge regarding the position of company structure that are asfollows:Price optimisation systems –It ismanagement accounting method that assistorganisation for allocating various prices to produced goods and study response of1
consumers in order to develop best pricing strategy (Vander and Stede, 2011). Rowlinsonhave various prices for their products as they deliver uniform wear to consumers. Thisleads them to follow price optimisation system in order to satisfy their customers needand demand for earning maximum profits.Activity-based costing:It is an approachby the help of that, costs are determined whichinvolved in an activity performed by the organization (Christ and Burritt, 2013). Forexample, in the respective organization itascertaincosts includes indifferent actionsuchas manufacturing, packaging etc.This costing helps in providing reliable resultsforpreparation of managerial and financial reports.Inventory management system:It is procedure for managing inventory that is stockedin enterprise. Rowlinson Knitwear is retail store operating business into UK that delivershuge number of clothes each year that leads them to stock their products.For thatpurpose, corporation need impressive inventory management system which can providesframework for managing and controlling inventories. It includes raw material and workin progress goods so that objective of organisation can be achieved.This helps inproviding customer satisfaction and increase in profit maximisation.Cost accounting system –It ismethod that assist firm to ascertain all types of costsinvolved in organisation for estimating profitability(Contrafatto and Burns, 2013).Here,Rowlinson Knitwear can apply this accounting system in order to estimate different typescosts that can be enclosed in processes for finding clear profit.Job costing –It isprocess for ascertaining cost that is involved in particular task or job(Ward, 2012). It aid organisation for determining various costs for products. This methodis suitable to those firm which deals in production of customised goods. RowlinsonKnitwwear can apply such method as it produces personalised goods.Product costing –This is the process of ascertaining overall price included into goodsthat is produced through firm involving whole costs of direct as well as indirect such asdirect labour, materials fixed expenditure and so on. Rowlinson Knitwear have appliedthis product costing system in order to ascertain their goods cost so that its can apportionprice as well as determine profit.2
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