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Management Accounting - Sample Assignment

   

Added on  2021-02-19

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MANAGEMENTACCOUNTING
Management Accounting - Sample Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1: Management accounting and essential requirement of various types of managementaccounting system.......................................................................................................................3P2: Different types of management accounting reporting.........................................................5M1: Benefits of management accounting systems and their organizational applications...........6D: Critically evaluate the accounting system or accounting report with the organisation..........7TASK 2............................................................................................................................................7P3: Produce income statement by using marginal or absorption costing method.......................7...................................................................................................................................................10M2: Apply accounting techniques to produce financial reporting documents.........................10D2: Prepare and apply financial reports to interpret data for business activities......................11TASK 3..........................................................................................................................................11P4. Planning tools for budgetary control...................................................................................11M3: Application of planning tools for preparing and forecasting budgets...............................13TASK 4..........................................................................................................................................14P5: Define financial problem and comparison different organisation by masking the use ofmanagement accounting system................................................................................................14M4: Management accounting in response to solve financial issue that can lead to thesustainable success....................................................................................................................16D3: Planning tools to resolve the financial problems...............................................................16CONCLUSION..............................................................................................................................16REFRENCES.................................................................................................................................18
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INTRODUCTIONManagement accounting analysis the business activity that assist the internal managementto make sound decision. It is the formulation of accounting information that help the manager tocarry on day to day business activities. Both financial and non financial information are the partof management accounting to maximize the profitability successfully (Atrill, McLaney andHarvey, 2014). For the better understanding of report Brightstar company has been selectedwhose headquarter is in UK. It offer financial consultation services to the client of various sectorlike retail, manufacturing as well as hospitality. Amongst different financial service seeker, oneof them is Airdri company which take the help to Brightstar to formulate better financialdecision. This report cover following topics such as management accounting and requirement ofmanagement accounting system. Access different types of management accounting report andprepare income statement with the help of marginal and absorption costing. Further, define thevarious planning tool which are used for budgetary control. Further, use of effective accountingsystem to solve the financial problem faced by company are covered in this report. TASK 1P1: Management accounting and essential requirement of various types of managementaccounting systemManagement Accounting: This accounting approach can be defined as a process ofcollecting, recording and presenting data in such manner that it may assist the management tomake effective planning and decisions for a specific period of time. Managerial accounting isdifferent from financial accounting as financial reporting is useful for external users whilemanagement accounting used by internal stakeholders specially the managers. Managerialaccounts hasn't any specific formate as they are not statutory to be prepared. These can beformatted as per the convenience of the accountant.Management Accounting Systems: This system is evolved to provide information anddata for preparation of managerial accounts. Management accounting system collects all the dataand material subject matter whether it is financial or non-financial in nature (Byun and Roland-Luttecke, 2014). It is a kind of accounting adopted by companies to maximise and enhance thegross profit by coordinating expenses and revenue. With the help of this method, administrationof Airdri limited creates various reports and budgets, design strategies accordingly and focus on
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analysis of performance of the firm. Some of the systems used by respective firm are describedbelow:Price Optimisation system: Price optimisation is a mathematical method to record thereaction and behaviour of the customers towards different set of prices for number of products.For this purpose, a sales model and cost model is created. After conducting customers' activityregarding prices, a preferred set of prices for plurality of products is provides in this system.With the support of Price optimisation system directors of Airdri limited are competent to figureout the best possible price of their goods that will draw in ample number of customer and supportthem to maintain desirable profit. This system is used to fix the product price by analysing thecost of production, understanding customer needs and evaluating desired profit.Cost Accounting System: A cost accounting system is a model used by organizations toevaluate the cost of their products for inventory valuation, profitability investigation and costcontrol. It is essential to find out the original cost incurred by various cost centres in order tomanufacture a product for deriving desired profit, execute planning and making future decisionsefficiently . This system includes job order cost, process cost, direct costs, non-operational costs,etc. The administration of respective organization follows cost accounting system for measuringefficiency, identifying the unproductive functions, deciding the prices and future planning. Thisframework further useful to calculate and examine the entire profitability of business and in caseof unfavourable outcomes, healing actions can be taken to achieve desired results.Inventory Management System: This system is used for keep an eye on every singlemovement of inventory produced by organization. Inventory management system tracks goodsthrough the whole production process. It covers information from purchase of raw material towarehousing and shipping of the inventory. It also includes sales return, damaged goods, goodssent on consignment and WIP. Management of the chosen company uses inventory managementsoftware to record the information of inventory so that time and energy can be saves and queriesof the customers may be solved rapidly, timely and satisfactorily. By following this practise, firmis capable to get rid of the shortage of stock situation, save the carrying cost and create happycustomer base. Job Costing System: this costing method is used to estimate and evaluate the costassociated with a specific task , job or service (Chamizo-Gonzalez, and others, 2015). The joborder costing system is used when the various items produced are sufficiently assorted from each
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