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Management Accounting Assignment - Ever Joy Enterprises (UK)

   

Added on  2020-10-05

24 Pages4759 Words301 Views
Management Accounting report for EverJoy Enterprises (UK)1

ContentsIntroduction................................................................................................................................4Task 1.........................................................................................................................................5Management Accounting.......................................................................................................5a. Differences between management accounting and financial accounting...........................6b. Cost Accounting system.....................................................................................................8c. Inventory management systems.........................................................................................9d. Job costing system............................................................................................................10e. Different types of management accounting reports:........................................................11f. The need for a sound accounting system and the importance of the department producingtimely, accurate and relevant information:...........................................................................13Task 2:......................................................................................................................................14Break-even point..................................................................................................................14a. The number of tickets that must be sold to break even (i.e. the point at which there isneither profit nor loss)..........................................................................................................15b. If we want to make a profit of £30,000.00, how many tickets should be sold?...............16c. What profit would result if 8,000 tickets were sold?.......................................................17Task 3:......................................................................................................................................18a. You are to evaluate how budgeting can be used by Ever Joy Enterprises as a planningand problem solving tool in dealing with financial problems, but also for leading theorganisation to sustainable success......................................................................................18b. You are to also evaluate how strong financial governance can help to pre-empt orprevent financial problems for Ever Joy Enterprises and the means by which managementaccounting systems can contribute.......................................................................................202

Conclusion................................................................................................................................22References:...............................................................................................................................233

IntroductionThe report will be prepared to understand the fundamentals associated with managementaccounting and utilizing the concepts in an organisation operating in leisure andentertainment industry and named as Ever Joy Enterprises (UK). The managementaccounting definition will be demonstrated in this report along with the differences infinancial accounting and management accounting. The report will also help in explaining thevarious management accounting systems along with the essential requirements of each ofthese systems. The different types of management accounting reports will be explained andthe importance of these reports in organisational context will be given in the report. Furtherthe report will include the calculations relating to breakeven point and other profitabilityfactors associated with the company. The report will also include a section in whichbudgetary control along with its advantages and disadvantages will be discussed and thesignificance of financial governance in an organisation will be discussed appropriately. Theoverall report will help the individual users in understanding the basic concept associatedwith management accounting and its principles. 4

Task 1Management AccountingThe management accounting cinders evolved as a concept of accounting which enables thebusiness managers in making significant and critical economic decisions of the company.Traditionally the accounting system was restricted towards providing accounting informationto the business managers of company but now a days modern organisations are adoptingmanagement accounting system as a system of control by which particular situation andconditions can be analysed by the company and the decision can be accordingly by theexecutive department (Warren, et. al., 2013). Thus, management accounting can be referredto as the tool of decision making in which various reports are generated on a timely andadequate manner so that important business decisions can be made. Functions of management accounting which assists to the Ever Joy Enterprises:Figure: Management Accounting FunctionsBy Author,2018.5PlanningPlanningOrganisingOrganisingControllingControllingDecision- makingDecision- making

a. Differences between management accounting and financial accountingPoints of difference Financial accounting Management AccountingAimsThe aim and objective offinancial accounting isconcerned with providingrelevantfinancialinformation to the outsideusers for making investmentdecision in the company.The outside partiesincluding creditors,investors, government willbe able to make informeddecision with this type offinancial tool. The aims and objective ofmanagement accounting isaltogether different fromfinancial accounting wherethe purpose is associatedwith providing informationto managers for makinginformed decisions(Weygandt, et. al., 2015). Governing principlesThe financial reports andstatement of the companyare prepared and presentedbased on ‘GenerallyAccepted AccountingPrinciples (GAAP)’It can be established thatthere are no prescribed set ofstandards described forpreparing managementaccounting reports. Thereports are prepared andpresented based on therequirements associated withteam of management. Regulatory requirements The preparation of financialreports and documents aremandatory for the publicorganisations in the industryThere are no prescribed ormandatory requirements orregulations determined butthere are some frameworks6

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