Management Accounting | Sample Assignment
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Added on 2021-02-21
Management Accounting | Sample Assignment
Added on 2021-02-21
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ManagementAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1ACTIVITY 1....................................................................................................................................1Management Accounting Systems:.............................................................................................1Management Accounting Reporting:..........................................................................................3Benefits of management accounting system and their applications:..........................................5Evaluation of management accounting reporting and system how integrated withinorganisational processes:.............................................................................................................5Preparation of income statements using absorption and marginal techniques:...........................6Usage of management accounting techniques and preparation of appropriate financialreporting documents:...................................................................................................................9Interpretation of Financial Reports:............................................................................................9ACTIVITY 2....................................................................................................................................9Planning tools applied for budgetary control:.............................................................................9Analyse the usage of different planning tools and their application for preparing andforecasting budgets:..................................................................................................................13Adoption of management accounting systems to respond financial problems:........................13Comparison in between organizations in context of use of management accounting's systemsto respond financial issues:.......................................................................................................14Contribution of management accounting in sustainable success of the organization whileresponding financial problems:.................................................................................................15Application of planning tools to respond financial issue along with attaining sustainablesuccess:......................................................................................................................................15CONCLUSION..............................................................................................................................15
INTRODUCTIONManagement accounting system is primarily regarded as core utility or task of businessentity which circulates and retrieves fiscal information within organisational structure. Itcomprises organisation's efficiencies of maintaining liquidity, compliance capacity, company'seconomic flexibility and more. Easy accessibility of company's internal information assistmanaging personnels in effective and efficient planning and major resources' allocation. On theground of such internal information an organisation could choose appropriate alternative andtake decisions with aim of company's future growth (Adegbile, Sarpong and Meissner, 2017).This study focuses on this management accounting system theory and how much it enables anorganization track financial performance. For this purpose, a reputed engineering company ofUK is taken, named by Severn Trent. It is top regulated water and sewerage company operatingbusiness through headquarter in England. In order to streamline company and to build goodimage of company worldwide, Company's line managers adapted different managementaccounting's systems for the purpose of spreading and enhancing understanding across variousdivisions. This study is segregated into two major parts. The first part consists of explanation aboutmanagement accounting's concept along with various types of management accounting system.Moreover, it also exhibits significance of integrating reporting and systems within organisationalprocesses. While second part consists of advantage or features and disadvantage of numerousplanning tools assists in budgetary control's process. ACTIVITY 1Management Accounting Systems:Management accounting is often regarded as managerial and cost accounting whichfacilitates a smooth structure of optimising and analysing costs and other trade operations inorder to develop internal fiscal records, schedules and accounts. This term also relates to task ofgathering raw undefined information and converting such information into unique and relevantinformation, which finally help in tracking business entity's efficiencies. It usually covers a rangeof accounting manifestations such as margins, assessment, capital budgeting and costing ofproducts. In addition, its primary problem is with the entity's internal variables and thepreparation and presentation of a corporates' financial statement is essential for executives. In1
addition, executives of a organization can schedule short-term plans and day-to-day operationswith the support of management accounting (Balaman, 2016). Management AccountingSystem can be described as an inner organisational process which defines the information ofeconomic and fiscal development of the company, the capacity to fulfil obligation, resourceallocation and more. It collects the significant information such as profitability, income,excellent debts, etc. and report such data for managerial or business decision-making. SevernTrent has also adopted different systems to handle and manage their different operations withaim to achieve targets. Following discussed are key systems of managerial accounting asfollows:Cost Accounting System: It is defined as a procedure of controlling the transformationinto finished goods of raw materials. In addition, it is mainly used by manufacturers to recordmanufacturing operations. Cost accounting system pertains to a structure that offers ananticipated inventory valuation, controlling costs, and beneficial evaluation cost of its items to abusiness. The respective scheme evaluates the input expenses of each manufacturing stage forthis phase, as well as for fixed expenses such as depreciation on equipment and machinery(Chang and et.al, 2014). A standard cost accounting system operates by monitoring raw materialsas they move through phases of manufacturing and in real-time progressively transform in tofinished products. In Severn Trent, it assist management officials in determining costs involvedin purifying and supply of water to different parties and people. Inventory Management System: It is specified as a management system that keepsrecord relevant to inventory like collecting inventory information stored in warehouse, inventorysupply, and much more. Inventory management is quite crucial for an company's supervisor tobe able to identify regularly regarding storage and stock supply. This systems assists ineffectively managing level of wide ranger of items of stock and control expenses originatedthrough inventory processes. This systems is mostly proffered by manufacturing industry asbusiness belongs to such industry as these business entities have small, moderate and large sizedstock items and different processed inventories (Turban, Volonino and Wood, 2015). Managingsuch wast amount of inventory is difficult but by applying this system stock managers can easilyhandle such task. In Severn Trent, managers are adopting it to manage storage of water and otherits inventory or store item. This also enables businesses to keep just-in-time inventory structurewhere products should only be ordered as required from providers and supplies. No additional2
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