Management Accounting Report

Management Accounting
Report

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Covered in PPT...........................................................................................................................3
TASK 2............................................................................................................................................3
P3 Cost calculation and formulation of income-statement.........................................................3
TASK 3............................................................................................................................................5
P4 Advantages and Disadvantages of different planning tools used for budgetary control.......5
TASK 4............................................................................................................................................7
P5 Compare between organisation to adopt accounting system for respond the financial
problems......................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
The term management accounting refer to different practices which is used for
identifying, analysing, measuring, interpreting and communicating the financial information to
the managers for accomplish of organisation goals and objectives. This varies from the financial
accounting as the primary role of management accounting is to the assist make well-informed
management business decisions. The selected organisation for this report is Prime furniture and
this is one the developing or growing organisation which is established in the region of East
London (Alhatabat, 2020). The report highlights on management accounting system which is
essential requirements and also different methods related with management accounting. Along
with this cost calculation and appropriate techniques for formulation of income-statement will
also included focus in the report. In the last, advantages and disadvantages of different planning
tools will also learn from the report.
TASK 1
Covered in PPT
TASK 2
P3 Cost calculation and formulation of income-statement
COST- The term cost is explained as an expenditure which is required for manufacture
and sell the product or to get an asset ready for their normal use. In simple terms, this is
explained as an amount which is paid by the manufacture for collect and utilise resources that
make a product (Bobryshev and et. al., 2015). From the perspective of Prime-furniture cost is
explained as an expense which helps for manage cost with profits.
COST ANALYSIS- In economic terms, cost analysis refer to the calculation and
measure of the cost-output relationship. The economists are concerned with determine all cost
perspective which is incurred for hiring inputs and how they are arranged for maximise the
organisation productivity.
Basis Cost Cost-Analysis
Approach To determine the cost organised and
systematic, cost-accounting
approach is implemented which is
For cost-analysis price of
competitors products is also
monitored so this is a

simple and effective. complicated approach to
implement.
Method to perform At the time of cost management
perform work with induce all those
task that are engaged in company
operations.
For cost-analysis certain
conditions which exists in
external environment is
considered and this governs it
relates with different factors.
COST VOLUME PROFIT- CVP analysis is explained as the method of cost-accounting which
monitor or look on the impact of different level of cost and volume (Cleary, 2015). The main
motive of cost-volume method is to identify the number of operating profits.
FLEXIBLE BUDGETING- The major importance of flexible budget is to generate and induce
changes for make adjustments in actual revenue levels. Actual revenue and all other activities
measures support Prime-Furniture for formulate an effective flexible budget.
COST VARIANCE- A cost variance is explained as the difference between the cost which
actually incurred and the planned amount of cost. This is one of the most common track for
manage and monitor company expense, but it is also be tracked at the time of project level.
Prime-furniture use cost variance method for constant tracking.
Marginal and Absorption Costing
 Marginal Costing- The term marginal costing refer to the method or technique which is
used for monitor the marginal cost. Number of units are calculated and this helps for
manage cost by writing off the fixed cost from all production (Fiondella and et. al.,
2016). Moreover, the primary role of marginal costing is to calculate profits and expense
of business.
 Absorption Costing- It explain about the techniques which is used by organisation to
calculate all cost that is engaged with production process. Prime-furniture induce
absorption costing because this helps for control the overheads related with business.
Calculations: