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Management Accounting Assignment - Jupiter PLC

   

Added on  2020-10-05

12 Pages2900 Words235 Views
MANAGEMENTACCOUNTING
Management Accounting Assignment - Jupiter PLC_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Management accounting and different types of management accounting systems ....................1Different methods used for management accounting reporting ..................................................2Benefits of management accounting systems .............................................................................2Integration between management accounting system and reporting with organizationalprocesses......................................................................................................................................3TASK 2............................................................................................................................................4Income statement for absorption costing ....................................................................................4Income statement for marginal costing .......................................................................................5TASK 3............................................................................................................................................6Advantages and disadvantages of planning tools used in budgetary control ..............................6Use of different planning tools and their application for preparing and forecasting budgets......7TASK 4............................................................................................................................................7Management accounting systems adopted by different organization to respond to financialproblems ......................................................................................................................................7Management accounting can lead organization to sustainable success by responding tofinancial problems........................................................................................................................8Evaluate planning tools for accounting to solve financial problems ........................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
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INTRODUCTIONManagement accounting is related to providing accounting information which helps inmaking decision of the organisation to improve the performance of the organisation. Jupiter PLCwill be included in this report which is a medium sized manufacturing company. This study willinclude about different types of management accounting systems and their benefits. It will alsoinclude different methods of management accounting reporting. Furthermore, it will containadvantages and disadvantages of planning tools that are used in budgetary control. Moreover,this study will provide information about marginal costing and absorption costing. Also, it willinclude management accounting systems used for solving the financial problems.TASK 1Management accounting and different types of management accounting systems Management accounting is used to present the accounting information by preparingvarious report and statement which assist the managements in making effective decisions on thebasis of this information to improve the profitability and productivity of the Jupiter PLC (Malmi,2016). There are different types of management accounting systems which are used byorganization to improve the performance of enterprise that consist of Cost accounting system,inventory management system and job costing system.Cost accounting system : it is system used by organization to make estimates for thecost of their products to analysis the profitability of the firm. Cost accounting system is used tocontrol the cost of product by taking necessary action to reduce the expenses for improving theperformance of firm. Coast accounting system include fixed cost and variable cost (Tappura andet.al., 2015). Fixed cost is that cost which remains constant over the period and does not changewith the change in volume. Variable cost is the cost which changes with the change in thevolume of sales. Inventory management system : This system is used to control the flow of inventoryand utilize the resources in the best way to increase the profitability of the firm. Inventorymanagement helps in controlling the misappropriation of inventory. It includes LIFO and FIFOmethod for valuation of inventory (Chiarini and Vagnoni, 2015). In FIFO method the first goodpurchased are the first to be sold. According to LIFO method the last inventory purchased is theone to be sold first.1
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Job costing system : it is the system which allocate the cost the product in to each job.This system contains information of direct material, direct Labour and overhead. Direct Labouris related to workforce which is used in manufacturing the product. Direct material is the rawmaterial used in production process. Overhead are the expenses used in production of the productand accumulate to it cost.Different methods used for management accounting reporting There are different methods of reporting used in management accounting that consist ofbudget report, account receivable aging report and job cost report.Budget report : This report is prepared by management in order to improve the performance ofthe organization by estimating the budgeted expenses and incomers to compare them with theactual to measure the performance and profitability of the firm and take corrective action toimprove the performance if there are any deviations (Lavia López and Hiebl, 2014).Account receivable aging : This report is prepared by management to have information aboutthe customer that have not paid the amount outstanding to the organization. This report helps informulating credit policies of the organization.Job cost report : This report shows the expenses and income relating to particular job which arecompared with the estimated income and expenses. This helps in controlling the cost andincreasing revenue for the firm.Jupiter PLC maintain these reports to have information about the various operations ofthe organization to increase the profitability of firm. These reports helps Jupiter PLC in effectivedecision – making.Benefits of management accounting systems Benefits of cost accounting systemThis system helps Jupiter PLC in controlling the cost of the product to increase theprofitability of firm.This system helps Jupiter Plc in making effective decision for the future to improve theperformance of organization.Disadvantages of cost accounting system This system does not include financial figures due to which cost ascertained in not alwayscorrect.2
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