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Management Accounting - Sample Assignment

   

Added on  2021-02-21

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MANAGEMENTACCOUNTING
Management Accounting - Sample Assignment_1

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and essential requirements of its systems.......................................1P2 Different methods used for management accounting reporting.............................................3M1 Benefits of management accounting systems:.......................................................................1D1: Critical evaluation of accounting system reporting..............................................................1TASK 2............................................................................................................................................3P3 Different costing techniques that are used .............................................................................3M2 Various techniques of management accounting system .......................................................7D2 Interpret data for a range of business activities......................................................................7TASK 3............................................................................................................................................7P4 Planning tools used for budgetary control:.............................................................................7M3 Use of planning tools and their application for preparing and forecasting budgets:.............9TASK 4............................................................................................................................................9P5 Comparison of organisations to solve the financial problem with the use of managementaccounting system........................................................................................................................9M4 Management accounting in response to financial problem can lead organisations tosustainable success ....................................................................................................................11D3 Planning tools used to resolve financial problems:..............................................................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
Management Accounting - Sample Assignment_2

INTRODUCTIONManagement accounting can be defined as the process which is followed by top levelexecutives of business entities for the purpose of analysing, monitoring, measuring andcontrolling organisational performance. With the help of it internal stakeholders formulatestrategic decisions for the betterment of company (Wickramasinghe and Alawattage, 2012).Main aim of this project is to determine importance of management accounting, its systems andreports for enterprises to manage operations and respond to financial problems. The organisationwhich is selected for this report is Equilibrium Asset Management which is a financial consultantand have various clients such as Cambridge Manufacturing Company Ltd. which is mainlyestablished in UK. This report covers various topics such as management accounting, differentsystem and reports, use of various costing techniques to calculate profits etc. Along with this,different planning tools used in budgetary control and the way in which organisations are usingmanagement accounting systems are also covered under this assignment.TASK 1P1 Management accounting and essential requirements of its systemsManagement accounting:It is the process of analysing performance of so that strategicdecision could be formulated to enhance it and reach to the long term business goals. With thehelp of it stakeholders analyse that the company is generating profit or facing losses. InCambridge Manufacturing Company Ltd. managers conduct management accounting on regularbasis so that detailed information regarding current status of enterprise can be kept. It guidesthem to take appropriate actions that can help to critical situations such as continuous decrementin profits etc.Management accounting system: It can be defined as the system which is used bymanagers of different organisations for the purpose of analysing that business is performing wellor not. It helps managers of Cambridge Manufacturing Company Ltd. to share accurateinformation of enterprise with stakeholders so that their interest within the company can bemaintained (Zoni, Dossi and Morelli, 2012).Different management accounting systems: There are various management accountingsystems that are used by managers of business entities in order to make sure that predetermined1
Management Accounting - Sample Assignment_3

objectives are achieved or not. Some of them which are used by management of CambridgeManufacturing Company Ltd. are discussed below:Cost accounting system: It is a system which is used in most of the manufacturingcompanies for the purpose of keeping track record of costs which is related to productionactivities. Managers in Cambridge Manufacturing Company Ltd. use it for the purpose ofanalysing all the expenses related to products manufactured by enterprise in order to allot fundsto all the functional departments according to their requirements. It is required for theorganisation because it helps management to estimate cost and evaluate ability of CambridgeManufacturing Company Ltd. to generate profits.Inventory management system: It is used by different business entities to keep a trackrecord of stock which is used for production activities so that all the projects that are undertakenby company can be completed within the specific time limit. In Cambridge ManufacturingCompany Ltd. managers use it for the purpose of analysing that organisation is having sufficientstock to manufacture all the products. There are three different types of inventory managementsystem which are discussed below:LIFO (Last In First Out): In this method of inventory management currently boughtgoods are used to product products.FIFO (First In First Out): In FIFO earlier acquired goods are used for productmanufacturing activities.AVCO (Average cost): In this method, inventory is used on average basis of averagecost to conduct production activities.From all the above described methods of inventory management FIFO is used bymanagers of Cambridge Manufacturing Company Ltd. to manufacture different products. It isrequired by the organisation as it helps to analyse that sufficient amount of stock is available inwarehouses for production or not (Liang, 2013).Price optimization system: It is a system which is used by business entities to setappropriate prices for the products so that expectation of client could be matched. In CambridgeManufacturing Company Ltd. managers use this system to set best suitable prices for all themanufactured units in order to meet long term business objectives and enhance overallprofitability. It is required for enterprise as it helps to monitor response of customers on differentprices that are set by managers for products. While using this system managers determine2
Management Accounting - Sample Assignment_4

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