Nero Ltd Management Accounting System PDF

Added on - 22 Jul 2020

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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P.1. Explain management accounting and give the essential requirements of different types ofmanagement accounting system..................................................................................................1P.2. Explain different method used for management accounting reporting................................3TASK 2...........................................................................................................................................5P.3. Income statements using marginal and absorption costing approaches..............................5P.4.Explain the advantage and disadvantage of different types of planning tools used forbudgetary control.......................................................................................................................8TASK 4..........................................................................................................................................10P.5. Evaluate how organisation are adopting management accounting systems to response tofinancial problems....................................................................................................................10REFERENCES..............................................................................................................................13
INTRODUCTIONIn this documentation, this assignment describe about explanation of managementaccounting and furnish essential requirements of varied of management accounting system in theorganisation effectively. Moreover, this study review about to the varied of method which couldbe utilised by the enterprise manager in order to preparation of proper reporting in thecorporation in efficient form. Apart from it, the organisational manager need analyse marginaland absorption costing approach in order to identify the areas which is giving negative impact tothe business effectively. Some management accounting system can be adopted by Nero Ltd.Corporation in order to proper response of their financial issues in the organisation effectively.TASK 1P.1. Explain management accounting and give the essential requirements of different types ofmanagement accounting systemThis is also called managerial accounting or cost accounting in the organisation. This isthe method of assessment of cost in the company and make internal analysis of costing by whichthe manager of Bentley Motor Limited Company will be able to prepare a financial reportproperly at the workplace. Management accounting is totally a decision making methodology bywhich the enterprise would be able to accomplish their desired goals and objectives at easymanner(Abdel-Kader, ed., 2011). Moreover, management accounting is a process by which themanager of the company could prepare an appropriate management reports and accountingreports as well that furnish proper statically information and data analytical reports by whichmanager of the firm will make appropriate decision towards reducing costing within the businesseffectively. This will also assist the business to accomplishment of their organisational goals andobjectives with efficient way. This is a part of financial reports majorly towards the stakeholderswhich make monthly reports at the workplace by internal main employees such as manager ofthe company and some other assistant manager as well. Management accounting reports isbasically review about availability of cash amount in the company, revenue generation from thesales of the organisation and statements towards account payable and account receivable anddebts and raw material showing in its figure in the reports.Cost accounting system:This is most appropriate system for Bentley organisation inorder to assessment of their cost of production in the company as well as reducing the cost ofmanufacturing process and material. This is referred to reduction of costing in the company1
which is occurred while completion of business activities in the company at effective rate. Thiskind of accounting system used by Bentley business manager in respect to effectively identifythe differences between the fixed accounting and variable accounting within the companyeffectively (Zainun Tuanmat and Smith, 2011). Moreover, fixed costs are in the firm such asmaintenance cost of the production, tooling of the manufacturing method, production managingand purchasing raw material and quality control expenses and engineering expenses etc. forinstance, the variable cost for the company such as wages of employees etc. which is depends onthe production level of the company.The benefits of the cost accounting is that, it helps the organisational manager to makedecision towards the company which might lead profitability of the firm in the industryeffectively. It helps the firm to reduce their overall manufacturing expenses within the industryefficiently.Job costing system:Job costing approach is an effective system by which Bentleyautomotive business entity would be able to make assessment of their manufacturing costs andindividual cost of production and effectively reduce them as well. Job costing approach is mostused when in the company manufacturing process of each product different from each other atthe workplace (Håkansson, Kraus and Lind, eds., 2010). It is the system which refer to themethod by which each portion of manufacturing process might get different from each other inthe company and manager of the company give specific costing to each products line accordingto their product section in manufacturing plant. This system refer to computing the cost in thereport which is directly concerned to direct material cost and direct labour cost which is allottedin order to complete each job in manufacturing process of the company effectively. It includessome essential costing of each product line in manufacturing method which is direct materialscosts, direct labour costs and overheads costs as well.The major benefit of job costing is that, it assists the company manager to allot cost ofspecific individual manufacturing activities and compute the profitability of the company bydifferentiating margin to each company in the organisation effectively. By this process, youcould examine the operational activities at the workplace and according to them find out thesection by which the company can generate more profitability for the organisation effectively.Process costing system:Process costing method is used in most of the manufacturingcompanies. In case of Bentley automotive firm, they used process costing system when they2
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