Management Accounting - Leonard Business Services Assignment
Added on 2021-02-20
17 Pages5021 Words28 Views
MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1LO1..................................................................................................................................................1P1. Various types of Management Accounting Systems............................................................1P2, Different Method used for Management Accounting Reporting..........................................2M1. Benefits of Management Accounting System and its application in context oforganization.................................................................................................................................3LO2..................................................................................................................................................4P3. Calculation of costs using appropriate techniques of cost analysis in order to prepareincome statement ........................................................................................................................4M2. Range of Management Accounting Techniques to produce financial reporting documents.....................................................................................................................................................8LO3..................................................................................................................................................9P4. Advantages and Disadvantages of various types of planning tools used for budgetarycontrol.........................................................................................................................................9M3. Use and application of different planning tools in preparing and forecasting the budget.10LO4................................................................................................................................................11P5.Compare how organisations are adapting management accounting systems to respond tofinancial problems. ...................................................................................................................11M4 Role of management accounting towards the sustainability of the organization...............12CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15
INTRODUCTIONManagement Accounting refers to maintaining the financial data of the company. Itcomprises of recording, transacting and analysing the information of the business. It is helpful inproviding the financial and statistical information of the organization. Assignment is based onLeonard Business Services. It is a financial advisory company. This firm is located in London inUnited Kingdom. It provides financial assistance and business solutions to its clients. The Project report will explain the management accounting and will evaluate the benefitsof the management accounting systems. It will explicate various methods that is being used forthe management accounting reporting. The Study will apply a range of management accountingtechniques in order to produce financial reporting. Furthermore, the study will explain thedisadvantages and advantages of various types of planning tools. It will do comparison on howthe organisations adopts the management accounting systems in order to respond the financialproblems. Lastly, it will report will provide conclusion. MAIN BODYLO1P1. Various types of Management Accounting SystemsManagement Accounting It refers to the preparation of financial statements and recording business transactions inorder to provide statistical information of the Company. It is used to assist the planning,controlling and formulation of polices which are required to operate a firm. It facilitatesmanagers to take decision of the organization. It is helpful in identifying the business problems.Various Management accounting systems are explained below - Cost Accounting System – This systems is being designed to evaluate the business cost.Through this the business costs can be estimated. It is helpful in inventory valuation andprofitability analysis (Cost Accounting Systems, 2019). To control the enterprise cost thisaccounting system is being used. It is of two types Job order costing and Process costing.The cost allocation is carried out under this system. It is based either on activity basedcosting system and traditional costing system. Inventory Management System – It refers to the use of barcode scanners, barcodeprinters and desktop software in order to streamline and control the inventory of thebusiness. It is helpful in determining the current inventory level of the Company. In case1
of under-stock and overstock situations the company is able to mange it (Nitzl, 2016). Asthis system automatically tracks when the stock levels are below the average level. It ishelpful in relocating, receiving and disposal of the inventory. Job Costing System – It involves the process of accumulating the costs. It is helpful insubmitting the cost information in regards to particular production job. It allocates themanufacturing costs of the individual batches of the goods. There are three types of Jobcosting system namely, Direct Materials, Overhead costs and Direct Labour. It is trim toidentify the customers requirements as some allows to charged only certain costs(Senftlechner and Hiebl, 2015). It is helpful for determining the cost of manufacturingwithin the workplace of the organization. Price Optimization System – It refers to the mathematical programs that are used toevaluate how the demand differs at various price levels. This system is used torecommanded the prices and for improving the profits (Burritt, Herzig, Schaltegger andViere, 2019). It is adopted by the organization as it helpful in assessing the demand andfor fixing the prices. It defines different price levels of the products and services in orderto meet the business objective. P2, Different Method used for Management Accounting ReportingManagement accounting reports is being used for regulating, planning, decision-makingand for measuring the business performance. Thus, various methods which are used inManagement accounting reports are explained as follows - Budget Report – It refers to the report that describes the budget in respect to theexpenses so that it can be control during a period of time. It is critical for themeasurement of business performance of the organization and it is helpful in generatingoverall profitability of the business (Bui and Villiers, 2017). Estimations in this type ofreport are being made on the basis of the former data and reports. It is helpful for theadministration in meeting with the unanticipated event and for dealing with theunfortunate conditions in the future.Performance Report – It refers to the report that evaluates the actual performance ofthe business. It is helpful in determining the variances through comparing the actualoutcomes with the predetermined budget. When the unfavourable variances is being2
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