Management Accounting: Types, Methods, and Planning Tools

Management Accounting
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Essential requirements and types of management accounting..........................................3
P2 Methods used for accounting reporting.............................................................................4
TASK 2............................................................................................................................................5
P3 Cost analysis and appropriate techniques for formulation of income statement...............5
TASK 3............................................................................................................................................8
P4 Advantage and Dis-advantage of different types of planning tools..................................8
TASK 4..........................................................................................................................................10
P5 Compare between two organisation for responding towards financial problems...........10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
The term management accounting is explicated as a process of analysing, collecting and
reporting overall information related with functions and operations of organisation. In simple
terms, management accounting is explained as an activity which tracks all information and data
related with financial factor of business. Jeloa Limited is selected as an organisation for this
report and the section learn from the upcoming reports is management accounting and its types.
Different method and their use for management reporting will also include in this report (Bayne
and Wee, 2019). Cost calculation and methods for preparation of income statement is also
understands through this report. In the last, advantages and disadvantages of planning tools and
their use in budgetary control is focused in the report.
TASK 1
P1 Essential requirements and types of management accounting
Management accounting is the process of determining business cost and operations for
formulation of effective internal financial strategy which helps to make effective decisions. This
is also defined as an act which is used to generate sense related with costing of products and
services. Jeloa Limited utilise management accounting system for formulation of effective
strategies and forecasting budget for all departments.
Types of management accounting system
Some kinds of management accounting system which is appropriate for Jeloa Limited are
mention as follow:
 Inventory management system- This is explained as a system which is used for
monitor all resources related information that are related with supply chain (Chi and et.
al., 2015). Jeloa Limited management utilise inventory management system because
this helps for managing all resources in a limited cost.
Essential requirements- One of the primary essential requirements of inventory
management is to utilise all raw-materials and resources related with business. In the
current scenario, management is focused towards maximisation of profits.
 Job Costing system- The job costing system is explained to a process of cost
allocation which incurred or relate with a particular job. This also considered towards
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formulation of procedures which exists in a manufacturing job. From the perspective of
Jeloa Limited job costing system is used for generate estimated profits.
Essential requirements- The job costing system is required by organisation because this
helps for calculate the cost related with the project. Along with this job costing system
generate effective results related by analyse all job activities.
 Cost accounting system- The main use of respective system is to consider overall cost
that is related with fixed and variable manufacturing cost. Also, product costing system
is used by Jeloa Limited because this helps in managing products and its cost with
motive of earning profits in an organized manner (Ghasemi and et. al., 2019).
Essential requirements- Cost accounting is essential for organisation because this helps
for identify those product and services that maximise profits. Jeloa Limited induce cost
accounting system as it helps for estimate all over cost in an appropriate manner.
P2 Methods used for accounting reporting
All process and procedure which relates with accounting reporting help top management of
respective organisation to make accurate decisions. From the perspective of Jeloa Limited,
accounting report methods is used for monitoring overall work performance. Some of the
management reporting systems that are universal for all organisation is mention as follow:
 Inventory management report- This is an important factor and it is performed by
organisation for completion of task according to decided report that provide
information related with business. Jeloa Limited use inventory management system for
understand opening and closing stock, fixed cost, cost related with resources, etc. The
prime focus of inventory management system is to generate balance between inventory
and customer services. This also results all resources are managed by organisation
properly.
 Budget report- These types of budget accounting report is very complex to measure all
performance of organisation. On the other side, budget report supports management to
complete the project according to decided cost (Goretzki, Strauss and Wiegmann,
2018). Management of Jeloa Limited use the budget report system because this helps to
predict the cost of upcoming future operations and functions. All resources and their
overall utilization is monitored and track through engage them in budget.
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