Management Accounting and its Application in Organizations

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
SCENARIO......................................................................................................................................1
1. Management accounting and the requirements of the different types of management
accounting systems......................................................................................................................1
2. Different methods used for management accounting reporting...............................................2
3. Benefits of management accounting systems and their application within an organization.. .3
4. Integration of the management accounting systems and the management accounting in an
organizational process..................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Management accounting is one of the key functions in an organization wherein the
financial information shall be communicated and based on that the management of the company
shall be making the sound business decisions in the company. The current project shall be
highlighting upon the requirements of the different types of the management accounting systems
and how are they benefiting the organization in which they are applied. It shall also be reflecting
the methods of management accounting reporting and all these are integrated within the
organization.
SCENARIO
1. Management accounting and the requirements of the different types of management
accounting systems
Management accounting is the essential business function in which the accounting
information shall be communicated to the management which shall be assisting them in
formulating the key business decisions and accordingly controlling the operations within an
organization. It shall be playing the crucial role in budgeting and the forecasting of the future
business operations, controlling the costs and integrating the various processes so that the
organizational objectives of the company can be achieved.
The essential requirements of the various management accounting systems in the
organization are:- Cost accounting systems- The cost accounting system shall be applied in the business so
that the total costs of the operations can be assessed and the controlling can be
accordingly be undertaken by the management (Alvarez and et.al., 2021). Based on these
the essential requirements like the assessment of the profitability, application of the cost
effective techniques, shutting down the operational segments which are ineffective in
terms of higher costs etc. Inventory management systems- This is the other management accounting system that
shall be tracking the levels of inventory, identifying the correct method of its valuation,
determination of the supply chains and it shall mainly be applied by Prime Furniture to
govern the issue of the under-stocking and overstocking of the inventory. Its required to
determine the correct levels of the inventory that are to be ordered to minimize the costs.
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