This presentation provides an overview of management accounting, including methods of reporting, calculation of costs, principles, role in organizations, integration, and benefits.
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MANAGEMENT ACCOUNTING STUDENT ID:
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TABLE OF CONTENTS Name of SlideSlide Address Introduction3 Management Accounting4 Methods of Management Accounting Reporting5 Calculation of Costs to Prepare an Income Statement6 Principles of management Accounting8 Role of Management Accounting and Management Accounting Systems 9 Integration of Management Accounting in an Organization10 Benefits of Management Accounting Functions to Organizations11 Conclusion12 References13
INTRODUCTION •Thispresentationisdesignedforfacilitatingknowledgeabout management accounting systems. •The focus of this presentation is also on application of the management accounting techniques used in different organizations. •Itisalsohelpfulinunderstandingtheintegrationofmanagement accountinginabusinessorganization.Finally,thepresentationis helpfulinunderstandingbenefitsofdifferentfunctionsofthe organization.
MANAGEMENT ACCOUNTING •Management Accounting: •Management accounting can be defined as the branch of accounting andfinancialmanagementthatdealsinstudyandevaluationof financial data of company in order to evaluate financial performance of companyandalsotoprovideappropriateadvicetocompany (Blackwood, 2014).
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CALCULATION OF COSTS TO PREPARE AN INCOME STATEMENT Income Statement According to Variable Costing ParticularsDetailsTotal Value (in £) Sales81000000 Less: Variable Expenses Direct Material Cost400000 Direct Labor Cost500000 Cost of supplies consumed250000 Variable selling and distribution overheads460000 Total Variable Expenses16100001610000 Contribution Margin79390000 Less: Fixed Expenses Fixed Portion of Production Expenses200000 Fixed Selling and Administrative Expenses300000 Annual Insurance Cost50000 Other Fixed Expenses50000 Total Fixed Expenses600000600000 Net Profit78790000
CONTINUED… Income Statement Under Absorption Costing (in £) ParticularsDetailsTotal Value (in £) Sales81000000 Less: Cost of Goods Sold3500000035000000 Gross Profit Margin46000000 Less: Selling and Administrative Expenses Variable selling and distribution expenses1000000 Fixed selling and distribution expenses25000003500000 Net Profit42500000
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PRINCIPLES OF MANAGEMENT ACCOUNTING •Influence •Relevance •Value •Trust
ROLE OF MANAGEMENT ACCOUNTING AND MANAGEMENT ACCOUNTING SYSTEMS •Management accounting and management accounting systems perform the role of stewardship. •Management accounting is also highly beneficial in designing optimal capital structure for the company. •Management accounting is also helpful in control mechanism due to availability of variance analysis technique in the hands of management accountants.
INTEGRATION OF MANAGEMENT ACCOUNTING IN AN ORGANIZATION •Integration of management accounting in seen in different organization in the form of development and usage of big data analytics management system. •In addition to this, the management accounting is also integrated with the accounting information systems and database management systems within an organization.
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BENEFITS OF MANAGEMENT ACCOUNTING FUNCTIONS TO ORGANIZATIONS •The benefits of management accounting function are visible in organizations in the form of capital budgeting decisions, adoption of optimal capital structure etc. •Management accounting focuses on adoption of scientific forecasting of budgets that ultimately contributes in increasing production or output within the organization.
CONCLUSION •On the basis of above presentation, it can be summarized that there are different types of management accounting systems such as price optimizing system, inventory management systems, cost accounting systems and the job costing systems. •There are different principles of management accounting such as relevance, value, trust and the influence. •Example of different roles and benefits of management accounting involves optimal capital structure decisions, cost-volume profit analysis, scientific budget forecasting, evaluation of financial performance and better control through variance analysis technique.
REFERENCES •Blackwood, N. (2014)Advanced Excel Reporting for Management Accountants. USA: John Wiley & Sons. •Cairney, C.T., Chivaka, R. and Fourie, H. (2011)Principles of Management Accounting: A South African Perspective.UK: Oxford University Press. •Jones, S. (2015)The Routledge Companion to Financial Accounting Theory.UK: Routledge. •Maher, M.W., Stickney, C.P. and Weil, R.L. (2012)Managerial Accounting: An Introduction to Concepts, Methods and Uses.USA: Cengage Learning. •Smith, S.S. (2017)Strategic Management Accounting: Delivering Value in a Changing Business Environment Through Integrated Reporting.USA: Business Expert Press.