Management Accounting System Assignment: Answers

Running head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING
Name of the University
Name of the student
Author notes

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MANAGEMENT ACCOUNTING
Table of Contents
Task 1........................................................................................................................................2
Information booklet useful for understanding the concept of management
accounting system and management accounting report..............................................2
Task 2........................................................................................................................................9
Management accounting techniques...............................................................................9
Task 3......................................................................................................................................12
Evaluation of different planning tools and their application in budget preparation
and forecasting..................................................................................................................12
Task 4......................................................................................................................................14
Comparison and use of two management accounting systems to solve financial
problems.............................................................................................................................14
References.............................................................................................................................17
Appendix..................................................................................................................................19

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MANAGEMENT ACCOUNTING
Task 1
Information booklet useful for understanding the concept of management
accounting system and management accounting report
The quantitative and qualitative information that is required for evaluating the
operational and financial performance is gathered from the managerial accounting
techniques. The managerial accounting is a sub division of the accounting system
which is used to make plans and strategy to control the usage of funds by the
managers. It supports in the decision making process by the application of budgeting
and after that it is used to control the budget by making comparison the budgeted
figures with the actual figures, and from the result of the difference between the
actual and the budgeted figures it can be possible to calculate the variances of the
budgeted and the decisions can be taken based on the outcome of such variances.
The managerial accounting techniques as a resource management tool give
emphasis on the estimation of the future and on the other hand as a technique for
controlling the resources it concentrates on the present situations.
Assisting the management to make improvements continuously
The management accounting helps the management to continuously monitor
the results of the budgets and that can help in continuous improvement of the
effectiveness of processes and systems and expand the superiority of the goods and
facilities provided by them. The improvement is to be made on continuous basis to
eliminate the adverse effect of abnormal waste of materials, time and efforts of the
labours, and increase the productivity (Otley 2016).
The management accounting is related with the methods of measurement,
identification, explanation, and communication of the financial data to the
management. The various management accounting system which is utilised by the
organizations are:
Inventory management system

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MANAGEMENT ACCOUNTING
This management accounting system is utilised by the company to manage
and control the goods that are kept in inventory of the organization. This system is
required at various locations of an organization to maintain a planned course of
actions and maintaining the inventory (Cooper Ezzamel and Qu 2017).
Cost accounting system
The cost accounting system is utilised by the manufacturers to write down
production activities by utilizing the system of perpetual inventory. The cost
accounting system is formed for manufacturers in order to monitor the continuous
flow of the stock used in the different process of manufacture.
inventory
managem
ent
product
managem
ent
purchase
module
customer
master
inand
outwards
in and
outwards
challan
managem
ent
inventory
status
report

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MANAGEMENT ACCOUNTING
Job costing system
The job costing process is formed to assign the cost that the organization has
to incur for a particular job which is related with the process of production. The job
costing system is mainly used in the industries like construction where costs are
allocated to various projects of the company (Amara and Benelifa 2017).
cost
accounting
system
input
measurement
basis
inventory
valuation
method
cost
accumulation
method
cost flow
assumption
recording
interval
capbility

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MANAGEMENT ACCOUNTING
Price optimization system
The method is used to detect the products, the price of which can be
increased even though the customer is not willing to pay. This method of
management accounting system helps to frame a strategy that will help the business
to sell the products quickly at a price which will fetch higher profit margin to the
organization.
In small organization it is very essential to make optimum utilization of funds
and for that reason it is essential to prepare a budget from which it will ne possible to
measure the inflow and out flow of cash easily. Managerial accounting reports can
assist the management by providing the necessary information that is required to
bring control in the costs, giving financial motivation to the efficient employees,
eliminating the products that are not useful and making investments in these types of
products which will provide higher return to the organization. Based on the nature of
the business and the sensitivity of time of the financial information that the
management or owner may require, that means that in what interval they want such
reports, monthly, quarterly weekly or on daily basis (Ax and Greve 2017).
job
cost
s
labour
materials
subcontrac
ts
equipment
rental
other
direct costs