Management Accounting: Services & Techniques

Management accounting
services & techniques

Table of Contents

INTRODUCTION
Management accounting (MA) is a process that analyse the business operational cost in
preparing the final statement and accounts and other relative information that help to manager in
decision making process (Nilsson and Stockenstrand, 2015). To achievement of the business goal
it is necessary to measure the organisational performance on regular time period. It may include
the data related to costing and financial data that transformation the information into relevant
data to support the management of an organisation. Management of a business looks into the
matter related to process happening around the business and find out the needs of it. This tool of
management accounting is help in the fabrication of the business plan of action and achieve the
financial growth. For the better understanding, Oshodi plc company is selected to prepare this
report. This is manufacturing company based in UK that produce the fruit juice item and expert
in JOJO brand. This report is all about the management accounting method, process, financial
difficulty in the business and planning tool that help in the resolving the business issues.
MAIN BODY
TASK 1
P1. Management accounting systems and its requirements:
Management accounting:
It is financial tool which consider the financial and non monetary data to management by
providing the related information so that they can analyse the business information related to
operating activities of an entity. It will help in the strategic decision making related to future
planning of the business (Halbouniand and Nour, 2014). It plays a good role in assessing the
financial data and address the business concerns with a effective business model. So it help to
Oshodi plc in enhance the productiveness and profit of the business. Management style that is
connected with the accounting system of the organisation must be effective to use by
management. MA is used by all organization in order to make right business decisions and
increase the profitability. It helps to realize the needs of organization and make activity to fill up
the needs by using proper MA principles.
Management accounting system:
MA system is a business process that utilise the business data and information in a structured
manner to obtain the set targets by following the company's rules and regulation. These systems
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of MA help in making the fiscal decision for determining the price of the offerings by Oshodi plc
company. The chief goal of this system is to examine the overall business action, set the
objective and standard, rules and process and control on the operational activities of the business.
These accounting system are depends on the structure of the business organisation. In order to
develop the MS crucial information that are available from the business must be effective tyo
use by management. So the management system are helpful in the business to correct
evaluation on timely basis. Some of the management system are discussed as under:
Cost accounting system:
This is the important system of MA which emphasises on the cost composition of a
company. In the method of cost, institution includes different feature related to business concern
to reckon the cost of producing the food items, provided services and its impelling strategies like
price control, cost per unit etc. without using this system, it is difficult to evaluate the cost of
manufactured goods and services, value of services. So this cost model is used by the oshodi plc
to determine the price structure, cost of products inventory valuation, profitability analysis etc
(Boyns Edwards and Nikitin, 2013). The essential requirement of this system is ascertained from
the point that this process help in eliminating the extra cost related to manufacturing process of
an unit. By applying this cost system in the business oshodi plc can ascertain the input cost of
material, labour and direct overhead at different level of production. This method fulfils the
requirement related to the resolution of the different assorted kind of cost issues like high
operating and functional cost in processing units. The aspect which is achieved from the
application of the same is that cost must be affordable to purchase the goods by the customer.
Inventory management system:
This is the fundamental systems that is related to management of stock material in the
business. Its pools the process regarding the management of inventory that includes the process
of raw material, work progressive and processed goods. The requirement fulfilled due to the
effective application of this system is about availability of the material and stock at right time
and to track the inventory and keep proper records of all inventories within organization. So
oshodi plc can make the decision regarding the purchase of the stock by considering the stock
level. This system is generally adopted by those organisations which deals in the manufacturing
business and stores like shopping mall's warehouses, marketing company's stores etc. These
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