Research Project On R.L.Maynard - Management Accounting

Added on -2020-02-05

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MANAGEMENT
ACCOUNTING
Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Management accounting and essential requirements of different types of management
accounting systems.................................................................................................................3
P2Explain different methods that are used in management accounting reporting.................6
TASK 2............................................................................................................................................7
P3Calculate unit cost and also describe the difference among the marginal and absorption
costing technique....................................................................................................................7
TASK 3............................................................................................................................................9
P4) Advantages and disadvantages of different types of planning tools for budgetary control
................................................................................................................................................9
P5 Compare how organisation should adapt management accounting system to respond the
financial problems................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
INTRODUCTION
Management accounting plays a very significant role in the organisation as they are the
integral part within the management. Therefore, management accountant plays a great role in
providing the proper guidance and advises that assist them to run the business activities
smoothly. It also assists in enhancing the efficiency level in both management as well as staff
workers. Management accounting is totally different from the financial accounting as they are
always looking forwards rather than take historical based data. Therefore, it mainly consists of
the information regard to statistical and financial due to which managers make their day to day
decisions regard to business activities. The research project in context to the R.L. Maynard is
small size medium enterprises in that are only 50 employees are working and the annual net
turnover is less than £500,000. There is a discussion on the management accounting and there
necessary requirement of different types of management accounting system (Scapens and
Bromwich, 2010). Furthermore, there is an also study on the various methods which are mainly
use in the management accounting reporting. Thereafter, income statement has been prepared by
the company by adopting two different techniques are the marginal and absorption costing
techniques. Further, there is an also study on the budgetary control and its various types of
planning tools. Along with that, there is an also description on management accounting system
that are responding the financial problems.
TASK 1
P1) Management accounting and essential requirements of different types of management
accounting systems
Management Accounting:
Managers have to keep a track of different activities which take place in the organisation
for which they are working. R L Maynard is an organisation that has to maintain its flow of
information and accounts so that finances and resources are well managed. The term
management accounting or managerial accounting is based on the specific provisions of
accounting information for getting better perception about the financial or non-financial situation
and make effective decisions (Ward, 2012). This practise is applicable in three wide areas i.e.
strategic management, performance management and risk management. Company can get better
strategies and organisational heads will be able to make effective decisions through these
aspects. Financial statements are presented with better evaluation when management accounting
practises are incorporated. Analysis, interpretation and presentation of the data is very efficiently
done (Parker, 2012).
Often management accounting and financial accounting are confused with each other.
But these two terminologies are quite different and have a separate meaning and application
(Fullerton, Kennedy and Widener, 2013). Financial accounting is preparation of reports which
are formed on the basis of past performances. However, management accounting is totally based
on the collection of data from revenues, outstanding debt requirements which are further utilised
for managing everyday operations and business decisions (Bebbington and Thomson, 2013).
Different types of management accounting systems:
Traditional cost accounting: Company’s overhead manufacturing costs when allocated
effectively then traditional cost accounting method is said to be initiated (DRURY, 2013). Also
referred as conventional technique of cost accounting, the indirect costs associated with goods
which are to be manufactured by R L Maynardare depicted and allocated in this system. The
major attributes which were included in this system are labour hours which are directly
applicable on production, machine hours, and volumes of units produced in a particular time slot,
etc. Earlier business organisations faced a lot of issues and problems because of external
expenses depicted in the financial statements (Li and et. al., 2012). The uniformity in products
was demanded by customers but this lead to serious complications in manufacturing and
production due to lesser technologies. Hence, there is a need to gain estimates of the pricing
which is considered as overhead costs. This was performed under traditional cost accounting.
Cost accounting system: This type of management accounting system is also known as
product costing system. The entire framework is developed by businesses to get an estimate
regarding the costs associated with products and followed by their analysis of profitability. Other
functions involved in this system are cost control and inventory valuation. R L Maynard will be
able to understand the estimate and realise the products that are profitable and the ones that are
not generating any sort of profit.
Job costing system: Under the cost accounting system, job order costing or job costing is
also involved. According to this system, the cost of manufacturing on every job of the company
(R L Maynard) is estimated separately. The production of specialised services and products
which are unique in qualities is controlled through job costing system. The appropriateness of

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