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Management Accounting System Application: PDF

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Added on  2021-01-02

Management Accounting System Application: PDF

   Added on 2021-01-02

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MANAGEMENTACCOUNTING L4
Management Accounting System Application: PDF_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1A. Representing types of management accounting with its essential requirements...................1B. Representing management accounting reports and their importance to management...........3C. Representing advantages of mentioned system in A..............................................................4D. Evaluating Integrated management accounting system.........................................................5TASK 2............................................................................................................................................62.A Representing absorption and marginal costing method.......................................................62.B representing profit and loss statement on basis marginal and absorption costing................6B. Calculation of break even point and Margin of safety...........................................................7C. Representing significance of producing appropriate financial reporting documents.............8D. Representing appropriate interpretation of data of business activities in above scenario......9TASK 3..........................................................................................................................................10A. Representing advantages and disadvantages of various types of planning tool for budgetarycontrol.......................................................................................................................................10B. ..............................................................................................................................................11C. Comparing the application of management Accounting system in Agmet and itscompetitor British Chemical Product .......................................................................................12D. Use of management accounting system for responding to financial problems....................14E. Evaluation of planning tools to solve financial problems...................................................14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
Management Accounting System Application: PDF_2
INTRODUCTIONManagement accounting plays very vital role for every business entity as it helps inorganizational growth and to sustain in this competitive world. The present study will discussabout its types along with essential reports. This report will be providing understanding on thisconcept by considering a SME as Agmet (Chemical company). It will cover managerial reportswhich are mandatory for organization to attain success. Further, it will represent application ofvarious range of techniques with their numerical analysis. This report will discuss about Breakeven point and margin of safety for recovering its initial cost of investment or to earn profit. Inthe similar aspect, various planning tools will be discussed for budgetary control with its meritsand demerits. It will elaborate application of planning tools for analysing, forecasting budget andwill give comparison on basis of approaches for responding financial problems. Last but notleast, it will provide appropriate evaluation of these techniques for attaining sustainable success.TASK 1A. Representing types of management accounting with its essential requirementsAccounting is referred as summarising, classifying and recording each transaction onbasis each financial transaction. Management accounting is one of the most important parts ofaccounting and other one is financial accounting. It is the process of performing appropriateanalysis of business operations and costs for preparing internal financial report, accounts andrecords which help manager in process of decision making to accomplish its business objectives.In the similar aspect, financial accounting is a special branch of accounting which consists ofproper record of each transaction. It has an application of standard guidelines while recording,presenting and summarising transactions in financial or report like statement of profit and lossand balance sheet (Nuhu, Baird and Bala Appuhamilage, 2017). The types of managementaccounting are stated as below:Job costing system: It is the method of tracing specific cost of manufacturing job insteadof process. It is the methodology of accounting which is used for tracing expenses of producingunique product. The forms of job costing consist of spaces such as direct material, labour andoverhead. Information on the basis of production and service job might be required forsubmitting cost information to particular customer. The accuracy of estimating company'ssystem has been determined through this information. For instance: designing software program,building construction and cost of manufacturing small batch of products.1
Management Accounting System Application: PDF_3
Inventory management system: It is the combination of procedure and technologywhich oversees maintenance and monitoring products which are stored such as company assets,supplies and raw materials are ready for passing it to vendors and end customers. A wholeinventory management system comprises for determining each component of inventory alongwith its linked information like asset tags or barcode labels. The software of inventorymanagement gives central database along with point of reference to inventory gathered withcapability for producing reports, analysing data and to predict future demand. The process ofdocumenting, labelling and reporting are also included in this with important technique such asFirst in First Out (FIFO), Just in time (JIT), stock review and many more.Cost Accounting system: It is an internal reporting system which is used for the processof decision making in business Agmet. This framework is used through organization forestimating particular cost of products for the purpose of inventory valuation, cost control andprofitability analysis. It comprises of actual, standard and normal costing (Honggowati and et.al.,2017).Actual cost: It is replicated as an actual expense which is performed for acquiring assetwhich consists of supplier-invoiced expense along with delivering cost, testing andsetting asset. The approach of actual cost is unique with application of estimates forderiving cost which might incur in the future.Normal cost: This cost is applicable for the valuation of manufactured products alongwith actual direct labour and material cost as well as overhead of manufacturing ispredetermined on its rate.2
Management Accounting System Application: PDF_4

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