Management Accounting - Sample Assignment

MANAGEMENT
ACCOUNTING

Introduction
The management accounting is a type of accounting system which is related to the
providing financial and non financial information to the managers so that they can take important
decisions regarding to the internal management. This accounting system is different from other
kind of accounting system, this is why because it contains detailed information about monetary
and non monetary transactions. As well as this accounting system is not compulsory to
implement. In this report, different kind of systems and accounting reports are mentioned. Along
with financial statements are prepared with the use of appropriate costing techniques. Apart from
it, benefits and limitations of various planning tools and role of management accounting system
in resolving the financial issues is also described (Songini, Gnan and Malmi, 2013). For details
understanding of this topic, company named Brightstar financial company is chosen which
provide services to the manufacturing company KEF Plc.
LO1
P1.
The management accounting consists different kind of accounting systems that play a
significant role in the context of different kind of organisations. Some accounting systems are
mentioned below which are being used by the KEF manufacturing Plc company:
 Cost accounting system- This is a type of accounting system that provides a basis for
computing the cost of various kind of cost of activities. In the absence of this accounting
system it can be difficult for the companies to calculate about how much cost is occurring
in different kind of activities. Eventually, this accounting system is essential for
managing and eliminating the total cost as much as possible. Apart from it, this
accounting system is also beneficial in resolving different kind of financial issues. Such
as in the KEF manufacturing Plc they use this accounting system in the guidance of
Bright- star financial company. Due to this their cost of manufacturing activities get
under control.
 Inventory management system- The inventory management system is a kind of
accounting system which is related to the proper management of the stock including raw
material, finished goods etc. As well as in this accounting system companies can take
further decision about purchasing of new material and production of new products. This

is why because on the basis of it, companies can aware about how much stock is
available in the warehouses. Such as in the KEF manufacturing Plc company, they
implement this accounting system to evaluate about the available raw material, finished
goods and make decisions accordingly (Salterio, 2012).
 Price optimisation system- The price optimisation system is an accounting system that
determines the price of products and services at an effective level. As well as it is helpful
in analysing customers reaction on different pricing levels. Eventually, in the absence of
this accounting system it can be difficult for the companies to determine the right price of
their products. So this accounting system is essential for right pricing of products and
services. Such as in the KEF manufacturing plc company, they implement this accounting
system for the purpose of allocating right price of different products and services.
 Job costing system- The job costing system is a kind of accounting system that
determines the cost of job of different activities separately. Eventually, this is beneficial
in providing detailed information about the cost of jobs and companies can make suitable
decisions about the jobs. So basically, this accounting system is essential for the
controlling the cost of jobs. Herein, the aspect of KEF manufacturing plc, they apply this
accounting system for the purpose of evaluating the cost of job which is assigned in
different kind of activities.
So overall these accounting systems are being used by the KEF manufacturing plc in the
guidance of Bright-star financial consultancy.
P2.
There are various kind of methods preparing the reports, which are being used by the
companies to manage their financial and non financial performance. Such as in the KEF
manufacturing plc, they prepares different kind of accounting reports with the help of accounting
systems. Herein, below some types of accounting reports are mentioned below: Performance report- It is a kind of report that tracks and manage the performance in a
systematic manner. In this report, manager set the financial and non financial goals which
are needed to be achieved after that compare the actual performance with the standards.
So main purpose of the performance report is to control the performance of different
activities as well as of employees. In the KEF manufacturing plc company, they prepare

these reports so that they can evaluate the efficiency of their activities and can take
further decisions accordingly. Cost accounting reports- The cost accounting reports are prepared with the help of cost
accounting systems. In this report companies get the detailed information about cost of
different activities and accordingly can evaluate which activities are high cost consuming.
As well as on the basis of these reports, organisations can take better decisions about
minimising the cost. Basically, these reports are suitable for the manufacturing entities
because they are required to have detailed knowledge about cost of activities. Same as in
the KEF manufacturing company, they prepare this report to get information regarding to
the cost of their different kind of activities (Novas, Alves and Sousa, 2017). Inventory reports- The inventory reports are kind of reports which are related to
providing information about quantity of raw material and finished goods available in the
warehouses. Due to this companies can aware about how much stock is available so that
they can purchase new material. Apart from it, this report is also useful in getting
information about various kind of overhead in the process storing the stock. Same as in
the KEF manufacturing plc, they make these reports for the purpose of managing their
raw material and prepared products. This is why because on the basis of it, they can
decide whether they should purchase new material or not.
 Account receivable ageing report- This is a kind of report which is associated with the
providing detailed information to the companies about the total payables in the market as
well as about how many debtors are overdue. Apart from it, in this report companies can
get information about dates on which payment is due. So overall main objective of this
report is to help the companies in collection of amount from the debtors. In the above
respected company, they prepare this report for the purpose of getting information about
the total amount due in the market from different debtors.
So these are the reports of accounting which are being used by the KEF manufacturing plc for
getting important information about financial and non financial activities (Rossing, 2013).
M1.
The management accounting system consists various kind of accounting systems which
are mentioned above. Each of these accounting system has some importance which is mentioned
below: