Management Accounting and Systems - Essay

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Added on 2020-07-22

Management Accounting and Systems - Essay

Added on 2020-07-22

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MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and systems for Small White Elephant (SWE).........................1P2 Explain various methods used for management accounting reporting.............................3TASK 2............................................................................................................................................5P2 Income statement for SWE...............................................................................................5TASK 3............................................................................................................................................7P4 Planning tools used for budgetary control within SWE....................................................7TASK 4..........................................................................................................................................10P5 How SWE is adopting management accounting system to face the financial issues......10CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15

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INTRODUCTIONManagement accounting officer has its own value in SWE that manage the financialissues and resources effectively. This will help business to improve their operational activities.The report covers the essential management requirements and different management accountingsystem. Management accounting reports are also assessed in this report with income statementfor SWE using absorption and marginal costing system. Different types of planning tools tocontrol the budget and manage the financial issues will be discussed in this report. Managementaccounting officer characteristic to solve the financial problems and help management towardstheir decisions also assessed in this report effectively.TASK 1P1 Management accounting and systems for Small White Elephant (SWE)MANAGEMENT ACCOUNTINGManagement accounting is very useful for SWE that it helps them to manage theirinternal and external transactions effectively. It is also known as managerial and cost accounting.Management accounting is used for analysing business cost and operations which will helpmanagement accountant officer to prepare internal and external financial reports, decision-making process and record for accounting effectively. It also helps in preparing financial andcosting data to covert it into useful information for the officer at SWE. This also helps inachieving better control and planning towards business operations.ACCOUNTING SYSTEMManagement accounting system provides useful data to the officer to use and manage thebusiness resources to facilitate the firm effectively (Ab Rahman, Hassan and Said 2015). Thewider management information system also provides useful data to meet the requirements ofmanagement in terms of short and long decision-making. It involves the cost of products, goods,services, data to manage operations and planning.Cost accounting system: Cost accounting system helps officers to evaluate the cost of productsand services, business resources and units and cost of different departments effectively. This willhelp officers to manage and control the cost within budget at SWE effectively. Managementaccounting officer can also make effective planning and strategies to control the various business

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operations effectively. Cost accounting system is applied on retailers, manufacturers,government departments and sole proprietorships efficiently.Cost accounting system helps officers to determine the cost of products and servicesoffered by SWE.The system also helps in evaluating selling price of the product and service.It also analyses the profitability of business which helps in competing with others.Inventory management system: Inventory such as products, resources, finished goods, rawmaterials and work in progress comes in inventory management. The inventory managementsystem is a plan or policy from which officers can manage and control the inventory levelseffectively (Campanale and Cinquini, 2016). This will help them to determine the stockavailability, what level of stock should be managed and quality or quantity which organisationshould order to complete its operational activities effectively. The inventory cost is also knownas holding or carrying costs such as facilities, insurance, taxes, utilities and cost of capital. Thiswill also include the purchase quantity of products and services, transportation costs and shortagecosts such as finished goods, raw materials and work in progress effectively.Inventory management system protect against uncertainties and also raw materialshortage.The system supports strategic plans and policies and also helps in taking advantage ofeconomy scale effectively. Job costing system: Job costing system is a procedure of accumulation and cost recording. Jobcosting system identifies the job or group of people from which the cost can be collected andmanaged effectively. Job costing system is useful for those businesses where the production of aproduct or service is undertaken for a special or specific requirement of customer effectively andefficiently (Chenhall and Moers 2015). In addition to this, each order given by the customerstakes short period to complete.Job costing system helps officers to control the cost make planning accordingly andfinally to take decisions.It also helps to calculate or determine the selling price of a product and evaluate the profitand loss effectively.Complete the specific order in minimum time.

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