Management Accounting - Sample Assignment
Added on 2021-02-20
19 Pages4159 Words109 Views
Management Accounting1
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INTRODUCTIONA process of proper analysis of each activities that have effect over books of accountsand financial performance of the company, monitoring each activity and imposing effectivecontrol over it using professional skills is known as management accounting system. It can beseen as an essential element to be an inclusive part of a business organisation. Managementaccounting can also be defined as a set of numerous methods and concepts that enable managersin determining various alternatives that can be used by them for the purpose of imposing moreeffective control over the each financial activities of the business organisation. This system isuseful for managers in order to develop effective control over both financial and non financialactivities of the business. The present study provides a brief description about management accounting andmanagement accounting system along with essential requirements of adopting variousmanagement accounting systems within the firm. It highlights various methods that can be usedfor effective management accounting reporting. It describes use of management accountingtechniques for effective internal control of the company. Further, in the assignment, effective planning tools used by the manager for budgetarycontrol systems are also being defined along with their benefits and drawbacks. Furthermore, thestudy includes various tools and techniques of management accounting system that helpmanagers in effectiveness within the company so as to improve its ability to respond variousfinancial problems of the business. ACTIVITY 1Management accounting and management accounting systemManagement accounting Management accounting is a branch of overall accounting system which includes aprocess of partnering with management department of the company and help them in managingvarious monitory and non monitory functions of the company by providing all relevantinformation to the managers in such a way so that even a non commercial manager can easilyanalyse the reports and evaluate company's actual position in order to formulate their effectiveplans and strategies for the business (Management Accounting – Meaning, Advantages &Functions. 2019). Management accounting system3
Management accounting system is a managerial function that includes gatheringinformation from managerial accountants and perform their tasks of planning, monitoring,analysing, controlling etc. for financial activities of the company. Essential requirement of different types of management accounting systemsManagement accounting system can be categorised into various categories. such as costaccounting system, inventory management system, job costing system, price optimisationsystem, etc. Essential benefits of these systems can be determined as under:●Job costing system: Job costing system is that type of management accounting systemthat ensures that the company could generate sufficient amount of profit from the sellingtheir product and services to the customers. This system is Useful for those businessorganisations that provides customised goods or services to its customers. Providingcustomised products results in incurring different cost on various goods or servicesproduced by the business. This system enables the business in deciding appropriate priceto be charged for each product in order to generate reasonable profits. Its essentialrequirements can be determined as under:Requirements▪It helps in determination of cost incurred on production of each product orservices.▪It is required for setting price of customised product or services.●Cost accounting system: Cost accounting system is a set of various methods, guidelinesand principles that helps in maintaining effective control over the overall cost system ofthe company and development of cost efficiency within the business. This system isuseful for each type of business units. as being cost efficient is a basic requirement ofmaintaining and improving cost effectively within the company.Requirement▪It is required for ensuring cost efficiency within a business organisation. ▪It enables the managers in detecting wastage of cost from each part of the firm.▪It helps the managers in formation of effective strategies and plans so as tomonitor and analyse total cost incurred by the company during a specific timeperiod.4
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