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(Solution) Management Accounting System: PDF

   

Added on  2020-12-24

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Management Accounting 1

ContentsINTRODUCTION...........................................................................................................................3Management accounting system and their essential requirements..............................................3Different methods of management accounting reporting............................................................5Benefits of management accounting system and their application within an organisationalcontext..........................................................................................................................................6Evaluation of various system and reports integrated with organisation process.........................8TASK 2............................................................................................................................................8Total Production cost and sales of January..................................................................................8Various techniques to produce budgeted profit and loss statement.............................................9Financial Report.........................................................................................................................11TASK 3..........................................................................................................................................11Explain Advantage & disadvantage of different type of planning tools which is used forbudgetary control.......................................................................................................................11Analyse of various planning tool to prepare forecasting budgets..............................................13TASK 4..........................................................................................................................................13Comparison of companies with the use of different system to respond financial problems.....13Management accounting can lead companies to attain success................................................15Evaluation of planning tool to deal with financial problems.....................................................15CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................162

INTRODUCTIONManagement accounting is defined as the process of making internal decision within anorganisation in order to attain the predefined goals (Bedford, 2015). In business scenario, theprocess of collecting, analysing, recording and reporting useful fiscal information into finalaccount by the internal manager of company is defined as the management accounting.Management of businesses gather, displays, quantity, mechanise and examine the composedmaterial that supports them to make strategies and approaches to flourish objective. It is ascheme that is monitored by the administration for determination numerous monetary problemsthat may rise within an organisation. Through the help of authentic, accurate and appropriateinformation meaning full decision are made to attain the future goals. To better understand theconcept of relevant topic, ABC Ltd has been selected. The respective company is a medium sizeenterprise that deals in manufacturing industry. Management of company use to prepare finalaccount so that actual measurement, analyses can be made at the end of financial year. In this project, the importance of several management accounting system and reportshave been discussed with their essential requirements. Report also cover kind of costingtechniques such as marginal and absorption costing approaches to calculate net profit during ayear. Apart this different planning tool and their importance to company and how companiesadopt different accounting system in order to overcome financial problems have been describedin this report. Management accounting system and their essential requirements.In present era, management accounting has evolved with time and its concepts help the internaland external stakeholder to acquire the beneficial knowledge about the company’s performanceduring a year (Kastberg and Siverbo, 2013). As it is a systematic approach of recording andmaintaining beneficial information about companies performance within specific period of time.Assorted system which helps managers in making financial and non financial decisions. Thereare several system such as inventory management system, cost accounting system, primeoptimisation system and job costing system that makes better decision for manager. Mainobjective of this accounting system is to identify cost occuring in production, then to make plansand strategies to reduce cost.3

Different type of management accounting systems and their essential requirement:This system includes many methods which helps to the organisation. It provides all theaccounting reports to the managers, which help them in plan and strategy making. There are fourtypes of management accounting which are following:Inventory management system: Inventory management system is a kind of systemwhich tracks the stock in warehouses and as well as it also check the availability of raw material,assets etc. This system is very beneficial for all kind of organisation, specially for those whichare involved in manufacturing (Kolk and Perego, 2015). This is why because it tracks themovement of raw material when it goes in production system and tracks till the selling ofproduct. In short it can be said that this system helps in supply chain management system. ABCltd follow this system of inventory management which will be beneficial for them because itsolve the problem regarding to stock management.Price optimization system: Price optimization system helps an organisation in setting alevel of price which is suitable for both company and as well as for customers. It consists varioustools and techniques which helps in anlysis customer's respond on different pricing for productsand services. This system make price setting easy to the company. Management team of ABC ltduse this tool in proper price setting. This system can help the company in to set a price whichwill be beneficial in meeting company's goals and objectives. In addition it can also help to ABCltd to get competitive advantage over rivalry firms.Job costing system: Job costing system provides a method of calculating cost of eachproduct's unit. This type of system is suitable in those organisations which produces differentkind of products and services. In those organisations it calculates the cost of each product's unitindividually and if cost is high of each unit then it helps in making suitable strategies for costreduction. ABC ltd follow this system and they are able to check that what is cost of their eachproduct's unit. This method can also help in cost reduction of company's products. It will helpcompany to get higher profit because if cost will be low then price will also down and this willincrease the selling of products (Mahesha and Akash, 2013. ). Cost accounting system: Cost accounting system gives compeletly information aboutthe cost to the management which helps managers in making future plans and policies. Thissystem works in a particular manner first it record the cost occuerd in production then analyse itand allocate to each product and if cost is high then this system gives advice to the top4

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