Management Accounting System Used by Dell with Hp

Added on -2020-02-05

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Management Accounting
Table of ContentsINTRODUCTION......................................................................................................................2P1 Defining management accounting and presenting the essential requirements of suchsystem.....................................................................................................................................2P2 Explaining different methods used for managerial accounting reporting.........................3P3 Calculating unit cost and profit margin by using absorption as well as marginal costing4P4 Explaining the advantages and disadvantages of different types of planning tools thatare used for budgetary control................................................................................................6A. Computation of PVC’s sheet standard cost.......................................................................8B. Identifying material price and quantity price....................................................................8P5 Comparing the management accounting system used by Dell with HP that is used torespond financial problems....................................................................................................9CONCLUSION..........................................................................................................................9REFERENCES.........................................................................................................................11
INTRODUCTIONIn the resent times, importance of management accounting increased significantly.Moreover, it provides deeper insight to management about the financial performance andposition of each department. Field of management accounting lays high level of emphasis onpreparing and producing suitable reports about monetary as well as internal process andperformance. In this, by making continuous evaluation of performance level firm can takestrategic action that aid in both productivity and profitability aspect of firm. The presentreport is based on Dell which offers high quality computer, laptops and electronic gazettes tothe customers. In this, report will provide deeper insight about the manner in which tools ofmanagement accounting facilitates effective decision making. Besides this, report will alsoshed light on the different type budgeting and budgetary control techniques. Along with this,it will develop understanding about the way in which financial problems can be addressed. P1 Defining management accounting and presenting the essential requirements of suchsystemManagement accounting is the field of finance which provides high level of assistanceto the team of higher management in decision making. Moreover, such accounting field layshigh level of emphasis on preparing and providing financial as well as statistical informationto the managers. Thus, daily reports which are made by management accounting teamfacilitate day to day and effectual short term managerial decision making. By using suchreports manager of Dell can take suitable decision and thereby would become able to gaincompetitive edge over others. Management accounting techniques highly differ fromfinancial accounting to a great extent (Management accounting: scope and importance,2017). Moreover, reports which are produced on the basis of financial accounting techniqueused by both internal and external stakeholders. Further, financial accounting reports are prepared by the firm on quarterly, semi-annualand annual basis. On the other side, management accounting reports are framed on daily,weekly and monthly basis (Rubin, 2016). Thus, managerial accounting reports give input tothe higher management team of Dell for decision making. There are several managementaccounting systems that can be undertaken by Dell are as follows:Job costing: This method of costing lays high level of emphasis on accumulation ofseveral costs such as material, labor and overhead. By undertaking job costing method
firm can assess the cost which is associated with the specific business activity (Jobcosting, 2017). Hence, by using such method manager of the business unit can tracethe job and thereby would become able to identify whether cost can be reduced in thelater jobs or not. It is highly appropriate for the firms which are involved in designingsoftware, construction of machine and manufacturing of small batch products. Batch costing: Such costing method is highly effectual which in turn helps inassessing cost in the engineering component such as footwear, clothing andmanufacturing sector. In this, by assigning the batch number cost of similar units canbe assessed in an effectual way (Job and batch costing, 2017). Thus, by adding profitmargin in the unit cost business unit can determine suitable price of the productsoffered. Such costing method is highly effective that can be used by Dell to ascertainthe cost and price of similarly manufactured units. Process costing: Such costing method that assists in tracing and accumulating directcost in an effectual way. By using this, company would become able to allocateindirect cost in the best possible way (Process costing, 2017). Process costing methodis useful where mass production of similar products is undertaken. Further, it is highlyappropriate for the firms in which output of individual units cannot be differentiatedfrom each other. In this, manager of the firm assumes that cost of every product issame. P2 Explaining different methods used for managerial accounting reporting Managerial accounting reports are the one which furnishes information about theinternal business process and performance. By making assessments of reports manager of thefirm can monitor performance level in an effectual way. On the basis of time sensitivity andrequirement manager prepares report on daily, weekly and monthly basis. Budget report: Dell is the large sized business organization who deals in computer,laptops and other electronic gazettes. Thus, in the large sized business organization,manager of Dell can get information about the performance of each departmentthrough the means of budget report. Moreover, such report contains informationregarding the extent to which specific department has attained budgeted figures. Inthis, by using such report higher management team of Dell can assess the trainingrequirements of personnel (Bogsnes, 2016). In this way, by evaluating the causes ofdeviations firm can take suitable action for improvement. Thus, budget report ishighly significant which in turn helps in measuring the efficiency level of personnel.

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