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Management Accounting Assignment - Nero company

   

Added on  2020-10-04

15 Pages4718 Words39 Views
FinanceLeadership Management
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MANAGEMENTACCOUNTING
Management Accounting Assignment - Nero company_1

Table of ContentsINTRODUCTION...........................................................................................................................1SECTION 1......................................................................................................................................1P1Management accounting and necessity of various type of management accounting system.1P2 Different methods used for management accounting reporting.............................................3M1 Benefits of management accounting system and their application in organisational context.....................................................................................................................................................4D1 Integration of management accounting reporting and management accounting system.......4P3 Calculation of cost by using cost techniques such as marginal and absorption costing........5M2 Accurate use of management accounting techniques for financial reporting.......................6D2 Produce financial reports that accurately apply and interpret data for complex businessactivities......................................................................................................................................7SECTION 2......................................................................................................................................7PART A...........................................................................................................................................7P4 Advantages and disadvantages of various type of planning tools used in budgetary control7M3 Use of different type of planning tools and their use for forecasting and preparing budget9D3 measurement of planning tools to respond financial problems to lead organisation............9PART B............................................................................................................................................9P5 Evaluate how organisations are adapting management accounting system to respondfinance problems.........................................................................................................................9M4 How organisations are leading by using management accounting system to respondproblems....................................................................................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
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INTRODUCTIONOrganisation are adapting management accounting to attain core competence subject tomanagement and operation. There are various type of management accounting system are usedby the organisation for effective management and operation. This unit is prepared to demonstratethe dynamics of various management accounting system (Baldvinsdottir, Mitchell and Nørreklit,2010). Wide range of management accounting techniques are used to calculate profit and cost ofproducts. Use of planning tools are used in management accounting defined in this context.Various ways are compared in respect of use of management accounting to respond financialproblems. This unit is divided in 2 units in which Nero company is opted to evaluate the role ofmanagement accounting subject to growth and development of organisation. SECTION 1P1Management accounting and necessity of various type of management accounting systemManagement accountingManagerial accounting is one of the popular aspect in respect of managing and operatingthe business operations and function. Management accounting is a set of multiple standards,principles, concepts, financial and accounting knowledge. It is required to understand themeaning of management accounting in respect of responding financial problems and complexissues. Essential decisions and plans depends upon effective management of financial resources.It is also helpful to make important business strategies and plans for development andgrowth of the organisation. It requires in depth knowledge about finance and accounting rule todeliver the essential financial information and data (Fullerton, Kennedy and Widener, 2014).These information and data are use to frame new business plans and strategies and decisionmaking process. Junior accountants and finance managers remain responsible to make strategiesand plans for better operation and management.International accounting and financial standards, rules, guidelines and procedures areconsidered in management accounting. IFRS, CIMA and ISA are the main governed authoritieswhich provides rules and guidelines in respect of retaining financial records and accountinginformation in books and records.Various type of management accounting system and their importanceManagement Information System (MIS): Technology and advancement has given lotsof useful and important inventions to improve the tactics of business. MIS is also one of the1
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example of advanced and structured system for managing and operating the departments of anorganisation. It is a system which is made of statistical and analytical software and programs.Management information system helps provides computer based summarised information relatedto departments and sections of an organisation. More over the information helps to identify theaffecting factors and conflicts which occurs in decision making and strategic planning. BasicallyMIS system assist managers and accountants in decision making process.Inventory control and management system: in manufacturing and retail industriesinventory management is one of the challenging task for managers and store keepers (Herzig,Viere and Burritt, 2012). These are the organisation which face huge amount of fluctuating ofraw material and stock. Inventory management and control system helps provides a path tomanage and control the flow of raw stocks and finish goods in stores and in manufacturingprocess. ABC system, LIFO, FIFO and weighted average method of calculating the cost ofinventory are the most common methods which are used by the organisation in present situation. Job costing system: Organisations which operates more than one sections anddepartments are considered as multi section and multi purpose organisation. Managers andaccountants would become eligible to manage the departments and sections in structured form.There is a separate records and information are maintained for each department and section.There is a consolidated and summarised information prepared by the managers and theaccountants which helps the senior authorities to make business plans. Price optimising system: this is the method which helps to identifying the cost affectingfactors. This system remain essential for sales and production managers subject to makingpricing policy and cost consumption strategies. There is a detailed analysis done by theaccountants and the managers in order to identify the cost and profitability. All the prime costsuch as direct material, direct labour and direct expenses are consolidated in single form toascertain the net cost of the product. After adding profit margin the sale price of the product isdetermined by the managers (Lambert and Sponem, 2012). This is also a part of decision makingin which cost accountants and finance managers contribute their skills and knowledge tooptimise the prices and cost of the product to attain profit.Advantages of management accounting system2
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