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Preparation of Income Statement of Imda Tech using Marginal and Absorption Costing

   

Added on  2019-12-18

14 Pages4291 Words77 Views
MANAGEMENTACCOUNTING
Preparation of Income Statement of Imda Tech using Marginal and Absorption Costing_1
Table of ContentsINTRODUCTION ..........................................................................................................................3TASK 1............................................................................................................................................3P1 Functions of management accounting ..................................................................................3P2 Type of management accounting system and its use to each and every department in thecontext of Imda tech....................................................................................................................4TASK 2............................................................................................................................................6P3 Preparation of income statement of Imda tech using marginal and absorption costing .......6TASK 3............................................................................................................................................9P4 Planning tool with the discussion on budget and pricing strategy in the context of Imdatech limited..................................................................................................................................9a) Planning tools and budget advantages and disadvantgaes ................................................9b) Process of preparing budget.............................................................................................12c) Pricing strategy.................................................................................................................12TASK 4..........................................................................................................................................13P5 Balance scorecard and its implementation to improve the performance ............................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
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INTRODUCTION Management accounting helps the managers of an organisation to take effective decision.These decision making are helpful for them in making their success easy in keen competitivemarket. Managerial accounting specifies such type of decision which are for the short term. Ithelps in conduct the daily operations systematically so that any kind of deviation chances getreduced. Present report is all about the Imda tech limited who are dealing in special type ofchargers for mobile telephone and other gadgets. In the last board meeting department managerscomplained about the lack of financial information which reduce the working operations ofbusiness. The assignment define about the different type of costing method which use bydepartment managers to control their working cost. Along with this preparation of budget and itsadvantages and disadvantages are also going to be discussed. Moreover balance scorecardapproach is an effective method which helps in identify about financial and non financialposition of the company(Herzig and et. al., 2012). TASK 1P1 Functions of management accounting Management accounting is a method which helps in preparing the data on which thedecision making process and differentiation can made. It is generally prepared on the basis ofshort term by conducting day to day operations of the business(Li and et. al., 2012). It helps inthe planning process and organise all such planning elements by controlling them to takeeffective decision. So managers enable to make their working of department smooth andappropriate. This process helps in the long run by providing short term analysis. Hence, the management accounting have four main functions which are as follow: 1.Planning2.Organising 3.Controlling4.Decision makingThese four are the core functions of management accounting so that its nature becomedifferent from the financial accounting. These elements aids in taking the short term decision sothat all task and project get accomplish without any issue(DRURY, 2013).
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It is prepared for taking the decision for the internal stakeholders of the business. So thattheir benefits and interest do not get spoil and they keep supporting an organisation. Financial accounting is a method through which final reports get prepared. It is maintainon the whole year process and it includes all the short run and long run activities of a company.There are some major difference between in the financial accounting and managerial accountingmethod which are as follow: Management accountingFinancial accounting 1. It is prepared for the internal stakeholders ofthe business. 1. This form of accounting is maintain for theexternal audiences of an organisation.2. Management accounting helps in facilitateabout the decision which are related withcurrent and future course of action.2. It provides a great importance to the currentand potential investors.3. Chief executive officer, employees etc. aresome of the example of this accountingprocedure.3. Stockholders, financial institution are someof the example of financial accounting. Management accounting is a important tool which helps in taking all the decision whichare for the business welfare(van der Steen, 2011). It enables all the department managers to makeweekly analysis of all their 7 days operation and in any case of deviation they take decisionwhich are beneficial for them. Along with this it also aid them in make a proper report of theirstock and other core activities so their budget get fully utilise in a proper manner. This helps them in taking such type of actions and judgement which promote them inpositive manner.P2 Type of management accounting system and its use to each and every department in thecontext of Imda techManagement accounting system is a procedure through which a firm collect, store andprocessing financial and accounting data which helps to the senior management in their decisionmaking process. This is one of the most important system because all the short term decision aretaken on this system approach. This approach is beneficial as per the department managers cangather all the data of acts which they perform during a week or in a month. Monthly and weeklyreports enable them to take such type decision which promote their determination in a proper andsystematic manner(Soin and Collier, 2013).
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