Management Accounting Techniques

MANAGEMENT
ACCOUNTING TECHNIQUES

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUTION..............................................................................................................................1
PROJECT PART 1..........................................................................................................................1
Management accounting and Financial accounting.....................................................................1
Management Accounting Systems and their requirements & benefits........................................2
Management accounting reporting methods................................................................................4
Different types of cost accounting techniques used by the Dell Inc............................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUTION
Management accounting could be defined as the profession involving partnership with
decision making, performance management and devising planning and to provide expertise in the
financial reporting as well as controls for assisting management in implementation and
formulation of the organisational strategy. Management accountants look after the processes and
requirements for running the operations smoothly without interruptions (Otley, 2016). Present
report is based over Dell Inc which develops, designs and manufacture computers. It is one of the
largest suppliers of computers. Report will address the management accounting systems used by
organisation and their application and benefits for the business. It will also be providing about
the different reporting and the costing techniques that are used by company. It will enhance the
understanding of management accounting techniques aiding in process management.
PROJECT PART 1
Management accounting and Financial accounting
Management Accounting
MA refers to accounting processes that includes the combination of financial as well as
non financial statements with motive of enabling managers in taking effective decisions for the
organisation. It helps the managers to measuring, planning, collecting and prepare reports and
records for the management of company.
Financial Accounting
Financial accounting refers to the branch of accounting which keeps record of all the
financial transactions. It involves using standard guidelines for recording, summarising and
presenting the financial information in financial statements such as income statement, balance
sheet and cash flow statement.
Difference between MA and FA
 MA is used for preparing reports that provides information to the managers for making
policies, plans as well as strategies to run business operations effectively (Maas,
Schaltegger and Crutzen, 2016). On the other FA focus over preparing reports or
financial statements that are useful for external users.
 FA reports are prepared at end of financial year where MA reports are prepared as per
requirements of management.
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 MA do not follow any prescribed format or standards as for internal use while FA
statements are to be prepared following set standards and formats.
Management Accounting Systems and their requirements & benefits
MA systems are internal systems which are used by the Dell for measuring the processes
for management of organisation. There are various MA systems that company uses for
management of processes.
Job Costing Systems
JCS refers to process of gathering the information about costs that are associated with the
service job or specific production. Information is required for submitting cost information to the
customers under the contract that will be reimbursed. Information provided is essential to
determine the accuracy of estimating system of company that enable the managers in quoting
prices which allows reasonable profit to the firm. Information could also be used by the
organisation for assigning the inventoriable cost to the manufactured goods (Bromwich. and
Scapens, 2016). In job costing there are three types of the cost expenses that are direct material,
direct labour and the overheads. It provides the correct estimates about the costs to be incurred in
particular or specific job. The job costing enable the company to identify the costs related to
every job.
Requirements
Job costing is required by the Dell Inc for identifying the costs associated with each job
separately. It keeps record of all the charges related to the specific jobs produced by the
company. It enables the Dell to quote prices for the products at time of special orders and
specific job.
Benefits
 It allows the Dell Inc in track the cost of each job separately and expenses related to the
job such as materials, labour and overheads.
 It is beneficial for Dell when it receives special orders regarding the products and
services to quote the prices separately(Weetman, 2019).
 Dell Inc with the cost information provided by the systems takes decisions regarding the
profit margins to be kept for job.
Application
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