Management Accounting: Systems, Reporting, and Cost Analysis

Management Accounting

Table of Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1 define the term Management accounting & also discuss various forms of systems.`related to MA?.3
P2 discuss various methods that are commonly used for the purpose of management accounting
reporting?................................................................................................................................................5
TASK 2.......................................................................................................................................................7
P3 make calculation of costs using suitable techniques of cost analysis to prepare an income statement
through adopting different cost related to absorption and marginal costs?.............................................7
TASK 3.....................................................................................................................................................12
P4 name various types of Planning Tools along with advantage and drawbacks Used For the pupose of
Budgetary Control?...............................................................................................................................12
TASK 4.....................................................................................................................................................16
P5 Make comparision that how organizations are tends to be adapting management accounting
systems for the purpose to respond various financial problems?...........................................................16
CONCLUSION.........................................................................................................................................18
REFERENCES..........................................................................................................................................21

INTRODUCTION
Every organization must evaluate all management accounting practices, which are
defined as a strategic procedure that is advantageous to maintaining internal data and aiding in
decision making for the company's welfare. All internal stakeholders, such as employees,
management departments, and leaders, are primarily concerned with whether or not the
organization maintains each and every operation and performance properly through adequate
management accounting. The main purpose of this report is to discuss the management
accounting system of Prime furniture Ltd., a medium-sized manufacturing firm that was
founded in 1992 and provides a diverse range of manufacturing products such as doors,
windows, table, chair , and other products in a variety of attractive designs. This London-based
firm serves the entire market. This report will examine management accounting, as well as its
effective system and reporting, as well as the proper application of cost approaches. This paper
also identifies the benefits and drawbacks of the various planning tools utilized in budgetary
control.
TASK 1
P1 define the term Management accounting & also discuss various forms of systems.`related to
MA?
Management Accounting
It is a systematic method that can aid in the performance, management, monitoring, and
control of all accounting functions. Managers can use management accounting to efficiently
analyze, discuss, and implement facts and information that will help them improve the
company's performance (Brierley, 2017). Prime furniture employs management accounting to
make it easier for the organization to keep track of and analyze relevant data.
Management Accounting System
It is a type of internal management accounting system that may be used to analyze crucial
data in order to make informed business decisions. Prime furniture Ltd. is a manufacturing firm
that primarily uses this system to manage process costing.

Difference between management and financial accounting:
Management Accounting Financial Accounting
 MA supply important data to
management as it helps to frame rules,
as well as formulate strategies that will
allow the organization to run smoothly.
 It has the ability to focus on the
company's internal operations.
 It includes both monetary and non-
monetary data.
 Such method of accounting is primarily
concerned to the statements that are
related to finance as it tends to assist in
the provision of financial information.
 • It may be more concerned with the
company's external sector.
 It just contains financial data.
Different Management Accounting System
Prime furniture Ltd considers a variety of management accounting systems, which are detailed
below:
 Cost Accounting System - This is a structural set of systems that can assist in recording
and reporting cost measures in the context of providing suitable service. This system is
used by Prime furniture Ltd to track and keep track of direct and indirect costs (Englund
and Gerdin, 2014).
 Inventory Management System -This is a methodical technique through which a
management may efficiently track product records throughout the whole supply chain,
from purchase to manufacture to final sales. LIFO, FIFO, and AVCO are three different
types of inventory management systems. All of these forms of inventory management
systems were evaluated by Prime furniture Ltd as ways to help maintain inventory in a
manufacturing organization.
 Price optimization system -This approach is mostly used to optimize the price of the
company's manufactured items. The system is primarily used by prime furniture Ltd, and it aids

in the preparation of a record for managing the pricing of products that are ready to be sold to
clients. The company established a certain pricing that will match the clients' expectations
(Ferramosca and Ghio, 2018).
 Job order costing system - This approach is mostly used to optimize the price of the
company's manufactured items. The system is primarily used by Prime furniture Ltd, and
it aids in the preparation of a record for managing the pricing of products that are ready to
be sold to clients. The company established a certain pricing that will match the clients'
expectations (Ferramosca and Ghio, 2018).
Benefits of Management Accounting System
 Planning – The primary objective of management accounting is accurate planning for the
future. During the planning phase, the manager of Prime furniture Ltd keeps track of all
product, market, and other pertinent information. Managers can define a clear goal using
particular facts.
 Goal setting - This is also thought to be the most important advantage of management
accounting. The management of Capital Joinery Ltd sets his or her goals and works hard
to keep his or her employees motivated in order to achieve them.
 Problem solving and decision making - Major may efficiently address their problem
about products, information, and other resources that can aid in the decision-making
process by using a specific Management accounting system (Fullerton, Kennedy and
Widener, 2014).
P2 discuss various methods that are commonly used for the purpose of management accounting
reporting?
Management Accounting Reporting
It is a systematic framework that can assist in the collection and maintenance of
management accounting reports, which primarily contain particular information about business
performance. The Prime furniture Ltd. uses a variety of management accounting reporting
methodologies, including budget reports, performance reports, and other managerial accounting
reports.
Methods of management accounting reporting

 Performance Report - The major purpose of this report is to keep track of the overall
performance. In a performance report, a company can keep track of its employees'
performance so that managers can make strategic decisions about their pay, incentives,
and compensation. This report is being considered by the management of Prime furniture
Ltd in order to improve the company's efficiency and effectiveness.
 Budget Report -. This is an internal report that keeps track of the company's entire
functioning and operations. Prime furniture Ltd mostly uses this reporting approach since
it is a vital way for evaluating employee performance by department. The company
creates a budget based on its earnings, investments, expenses, and other resources. The
company established a budget in a suitable manner so that the management may
efficiently handle day-to-day operations. Account Receivable Report –This strategy was mostly utilized to keep track of their own
client count. The corporation devised this reporting approach so that they could know
what products they were offering to their customers or clients. This strategy is used by
Prime furniture Ltd because it allows them to keep track of their clients and effectively
identify any amounts owed to them. This strategy aids in the maintenance of the credit
policy, allowing the organization to lower the risks of a late payment from a client.
 Inventory Management Report - The major goal of such report method is to look at the
inventory records kept by manufacturing organizations on a date-by-date basis. Prime
furniture Ltd used this strategy to keep track of inventory and be aware of what was on
hand so that they could efficiently transport and distribute their products to their
customers (Kaplan and Atkinson, 2015).
Integration of Management Accounting Systems & Its Report In Organization Process
The organization is considering a number of management accounting systems that can
aid in the proper maintenance of management accounting reports. In terms of the management
accounting system, it is widely agreed that the Pride optimization system is extremely
advantageous and valuable to Prime furniture Ltd. The system's primary goal is to determine an
appropriate price for the clients. According to the explanation above, accounting dependable
reports are highly beneficial since they can assist in tightening credit rules, allowing the