Management Accounting - AGMET

   

Added on  2020-10-22

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Management Accounting
Management Accounting - AGMET_1
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1. Management accounting and essentials requirements of various type of managementsystems........................................................................................................................................3P2. Various methods used for management accounting reporting..............................................6M1. Merits of using management accounting system.................................................................7D1. Integration of management accounting systems and management accounting report.........8TASK 2............................................................................................................................................8P3 Calculate cost using marginal and absorption costing...........................................................8M2. Use of management accounting techniques.......................................................................10D2 Financial report that apply for interpret business activities................................................10TASK 3..........................................................................................................................................11P4 Advantages and disadvantage of various planning tools.....................................................11M3. Evaluation of planning tools .............................................................................................13TASK 4..........................................................................................................................................13P5. Adaption of management accounting system to respond financial problems.....................13M4. Evaluation of financial issues ...........................................................................................15D3. Evaluation of planning tools for responding to financial problems...................................15CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
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INTRODUCTIONManagement accounting system is the procedure of preparing the financial report thathelps manager in taking right decisions and also attains control on the business operations ehichdirectly contributes towards the attainment of company's desired goals and objectives. This givesinformation related to the financial situations of the firm and also used in taking decisions oforganising, directing and controlling the cost by optimal utilisation of resources. AGMET issmall business enterprise which is incorporated on 29 April 1980 and manufacture chemicalproducts (Balakrishnan, Labro and Soderstrom, 2014). This report contains various kinds ofmanagerial accounting system and their significance. Further, it describes about different toolsand techniques of cost analysis that is used for preparing income statement by using absorptionand marginal cost. In addition to this, project also includes different planning tools whichprovides direction for performing their task more effectively. This report also contains differenttypes of managerial accounting system which assist in AGMET to make business operationsmore profitable. TASK 1P1. Management accounting and essentials requirements of various type of management systemsManagement accounting can be defined as the process of identifying, analysing,measuring, communicating and interpreting information to manager for achievement of theorganisational goals and objectives. It is action related to making sense of costing and financialdata and converting that in a productive information for management and employees in thecompany. Advantage of management accounting is that it assists in getting better control on thebusiness activities that helps in the growth and success of the organisation (Bedford, 2015). Inthe context of AGMET, managers of the company evaluate the the information that is related tothe financial aspects that is variation in stock, raw materials, financial condition of an enterpriseand many more which aids in performing business operations in minimum cost and in aneffective manner. One of the major benefit of management accounting is that it helps inimproving the financial situation of the firm and also provides stability in the financial system. An organisation may faces problems and issues while performing business functions andmanagement accounting helps in finding solution to these problems and contributing towards theachievement of overall goals of the firm. AGMET have to manage and keep a record of whole
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financial activities which helps in growth and success of the business. There are variousimportance of management accounting system that are mentioned below in points: Assist in decision making: Management accounting system is the procedure of analysisand collection of data that can be used by AGMET to formulate policies and plans. Thisassist in taking correct decision which results in attainment of set organisational goalsand objectives. Safety and security from trade cycle: The useful information collected with the help ofmanagement accounting system provides real picture of past trade cycle that aidscompany in ascertaining the cause of effects and errors (Bennett and James, 2017).Therefore, it helps AGMET in protecting the organisation from the negative impact thatmay arises because of the trade cycle. Increases efficiency of business: One of the major importance of managementaccounting system is that it helps in improving the efficiency of business activities. Itdetermines the objectives of various departments in advance and achieve of these goalsare used as an efficiency management tool. It is useful for AGMET in planning,managing, coordinating and controlling activities of the enterprise. Types of accounting system:Cost accounting system: It is the type of management accounting system which helps inanalysing the cost of organisation's products and services for controlling the cost,inventory valuation and profitability. It is very necessary to estimate the exact productioncost of AGMET which helps in making business operations more profitable and alsodeveloping financial statement of enterprise that determines the financial condition ofcompany for whole year. Job costing: It is the another type of management accounting system which accumulatesthe information of cost that is associated with a specific production and service is knownas job costing (Job Costing, 2018). This helps AGMET in recording and tracking the kindof cost incurred like labour, manufacturing cost, overheads, etc. Job costing focuses onmanaging and controlling the expenditures and increases the profitability of the firm.
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