Report On Dell - Management Accounting System

Added on -2020-02-05

| 12 pages| 3780 words| 34 views

Trusted by 2+ million users,
1000+ happy students everyday

Showing pages 1 to 4 of 12 pages

Management Accounting
INTRODUCTION
Management accounting is the tool which is undertaken by the managers of business
organization to evaluate and analyze information. Hence, by applying the tools and
techniques of management accounting managers prepare suitable report that makes
contribution in effective decision making. One of the main objectives of business
organization is to meet goals and objectives by making optimum use of funds. Hence, by
placing emphasis of managerial reporting system business entity can devise suitable strategic
framework. This project report is based on Dell which offers high quality computer and
laptop to the customers. In this, report will provide deeper insight about the extent to which
management accounting system helps in fulfilling the goals. Further, it will shed light on the
manner in which managerial reporting system helps sin responding to the financial problems.
The major focus on this report is assessing the tools which in turn help in presenting suitable
view of cost and profit.
TASK 1
P1. Explaining management accounting and its system with essential requirements
Management accounting is the field of finance which in turn assists manager in
making appropriate decisions through the means of reporting. It focuses on making
evaluation of internal data such as budget etc. and thereby prepares report by conducting in-
depth evaluation. Hence, such report provides input to the top management and aid in
preparing competent framework. Moreover, building and sustaining competitive edge over
others is one of the main objectives of firm (Zimmerman and Yahya-Zadeh, 2011). In this,
managerial reports enable manager to attain such objective by making continuous evaluation
of performance level. On the basis of this aspect, by keeping in mind the significance level of
management accounting Dell has taken decision to undertake it for making control on both
cost as well as profit. Hence, there is several management accounting systems that manager
of Dell can undertake are as follows:
Inventory management software: This software contains information regarding the
stock level, price etc. By using such software business unit can make assessment of
finished inventory available for sell. Besides this, it also helps in identifying the stock
which Dell needs to maintain for meeting the needs and requirements on time.
Further, it also helps in identifying the ordering level and thereby assists in exerting
control on cost level significantly.
Price optimization system: Competition and prices which are charged by other firms
have high level of impact on customer decision making. In this regard, price
optimization system provides assistance to Dell in evaluating the behavior of
personnel at varied cost level. Usually, demand level is high when prices are
affordable. In this way, by offering quality computer and laptops to the people at
suitable price Dell can entice as well as profit margin (Macintosh and Quattrone,
2010). Further, such system or method also helps in assessing the suitable unit cost.
On the basis of such method, by gathering information about total cost and dividing it
from the number of units manufactured Dell per unit charges of laptop. In this, by
adding up margin in the unit cost manager of the business organization can set
suitable price. In this way, by setting and charging suitable price firm can enhance
customer base and would become able to earn high profit margin.
Job costing system: This system renders information about the material, labor and
overhead costs associate with the manufacturing of laptops. In this, by making
assessment of cost at each level of manufacturing aspect manager of Dell can take
suitable judgments. Hence, it helps in tracking the cost level of material, labor etc. and
thereby helps in identifying the appropriate cost level that is associated with the
manufacturing aspects or activities. The main advantages or benefits of such system
that it helps in assessing the level of wastage and provides indication about control.
Standard and marginal costing: By undertaking marginal costing system higher
authority of Dell can identify the level of expense on the manufacturing of one
additional unit. Marginal costing system enables firm to assess break-even point in an
effectual way. Through the means of BEP assessment senior authority can determine
the units which they need to produce or sell for getting suitable profit margin. Along
with this, standard costing system is highly significant which in turn lays emphasis on
the identification of deviations via making comparison of standard figures with the
actual performances (Baldvinsdottir, Mitchell and Nørreklit, 2010). Hence, by
evaluating each aspect business entity of Dell can take suitable decision for
improvement in the financial aspects. Such systems offer high level of benefit to the
firm in terms of suitable planning.
P2. Explaining different methods used for management accounting reporting
Report is the framework that is prepared by accounting personnel including both
financial and non-financial information. Hence, by undertaking and evaluating reports
manager of Dell can develop competent framework. In order to get information about the
business process and performance manager of Dell can prepare the following reports:
Cost report: This report contains information regarding material, labor and overhead.
In this, by summing up all the expenses business entity can find total cost. Hence, cost
report summarizes information about the total cost incurred in relation to specific
products or services. Further, such report also helps in collecting information about
the unit cost of computer and laptops (Ward, 2012). Hence, by dividing total cost
from the number of units manufactured unit cost can be assessed by higher
management in an effectual way. Hence, by considering such report management of
Dell can decide suitable price of computer and laptop. Moreover, in mark up pricing
method manager adds gross margin % in unit cost. Hence, by following such report
team of management can take suitable decision regarding the price at which they need
to offer products or services to the customers.
Budget report: In this report, manager of the firm lists all the expenses and revenue
clearly. In this, by using such report concerned authority of Dell can assess
performance of each department. Moreover, such report enables firm to make control
on cost level through the means of continuous evaluation. Along with this, current
year budget or monetary plan is highly based on the previous year’s framework. In
this, by making comparison of actual performance with standard aspects manager of
Dell can assess deviations. In this, by keeping in mind the causes of deviations firm
can take highly strategic measure (Managerial reporting system, 2017). Besides this,
budget report helps in preparing suitable incentive plan for the personnel. Further,
bonuses and other monetary rewards are also highly based on such report. Hence,
budget report may be served as a performance appraisal tool which in turn helps in
taking suitable decision regarding salary of employees and other associated benefits.
Hence, by making competent plan manager of Dell can motivate the employees to a
great extent.
Performance report: Higher manager can prepare suitable budgeting framework
about the near future by undertaking performance report. Moreover, such report
highlights the extent the extent to which actual performance varies from budgeted
figures. Further, by taking into account such system Dell can set suitable parameters

Found this document preview useful?

You are reading a preview
Upload your documents to download
or
Become a Desklib member to get accesss

Premium

$45

Q&A Library Access

Chat support

12

Document Unlocks

4

Answer Unlocks

Students who viewed this