Management Accounting in Toyota
Added on 2020-10-04
14 Pages3827 Words413 Views
MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P.1. Explain the management accounting and essential requirement of different kind ofmanagement accounting system in Toyota firm.........................................................................1P.2. Different methodologies used for management accounting reporting.................................3TASK 2............................................................................................................................................4P.3. Marginal and absorption costing methodology....................................................................4TASK 3............................................................................................................................................6P.4. Advantage and disadvantage of using different planning tools that could be utilised forbudgeting control at workplace...................................................................................................6P.5. Adoption of management accounting system to respond to financial management............8REFERENCES..............................................................................................................................10
INTRODUCTIONIn this research, we would critically discuss about to management accounting tools andmethods for Toyota automotive business to improve their financial performances andrequirements of different kinds of management accounting system which can be utilised withinToyota automotive business and explain about to different methods used for managementaccounting reporting in the firm as well. We would discuss in this investigation about to usingappropriate techniques of cost analysis to prepare income statement using marginal andabsorption method by using both costing techniques. Furthermore, we would explain theadvantages and disadvantage of different kinds of planning tools used for budgetary control forToyota automotive business. Ultimately, we will compare how Toyota firm are adoptingmanagement accounting systems to effectively solve all financial issues within Toyotaautomotive corporation.TASK 1P.1. Explain the management accounting and essential requirement of different kind ofmanagement accounting system in Toyota firmToThe general manager of the Toyota automotive, japan, Date 2-2-2018Sub: Management accounting process and their significantManagement accounting is a methodology in which financial data and information aremeasuring, analysing, interpreting and communicate them towards the Toyota business goalsand objectives effectively. This is also concern about to utlise this process as cost accounting inthe firm. The main difference between management accounting and financial accounting is thatdata analysis of management accounting assist the company's manager in order to decisionmaking in right way, whereas financial accounting is the process which furnish external partiesoffering information effectively(Wu and Boateng, 2010). The methodology of managementaccounting and report provides the information about day to day financial report and staticanalyst of financial data are required to manager to make their decision towards company'sshort terms and long term goal and also helps in their day to day operation within the business.There are several types of tools and techniques which are used in the Toyota business in termsof accomplish their managerial goals and company's financial objectives as well. There arevarious type of management accounting which are inventory management, price optimisation,1
cost accounting system, job costing system and process costing system as well. All theseaccounting systems benefits provide the basic factor about to formulate standardise format interms of data analysed, identified and communicate in better way. These all managementaccounting methodologies would help the Toyota business in respect of reducing theirmanufacturing and other irrelevant cost within the corporation. Job costing system: This approach which is widely used by those businesses which aredoing their business in manufacturing industry. Several times, it could have been seenthat there are wide amounts of customised product acquired to deliver them sufficientproduct demanded by their customers(Cokins, 2013). Due to several specifications ofToyota company's products and services so that there are several types of costing areavailable for them to give each particular product to their fixed and specified rate whichmust provide to every product and services. Toyota business need to fix their rate ofeach customised product and services to manage their costing rate of essentialinstruments within the firm which are required to control their essential material costwithin the firm which are unnecessary. Job costing methodology provides the techniquesof maintaining their separate books of accounts of every product and services andaddition of this, various kind of expenses are calculated in them. Toyota business mustuse job costing system in the business to specify each product and service cost of thecompany which are using while manufacturing automobile vehicles at the workplace sothat their direct material cost and labor cost which are given to their workers andemployees can be reduced and fixed.Process costing system: This is the approach which are used when there is massproduction of similar product within the business so that where price are concerned withthem could not be differentiated to each other. In this process cost of eachmanufacturing product are as same as another product costing in the firm. Costing ofwhole mass production are computed and appropriate cost is recognised in term tounderstand whole product line within the business(Shields, 2015). This process mustfollow by Toyota automotive business to get advantage of which manufacturing processin the firm are making high cost at the workplace and essential to reduce and managetheir cost effectively by their managerial activities of management accounting within thebusiness. In this process it could be stated that mass amount of manufacturing costing2
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