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INTRODUCTION Management accounting is the tool which is undertaken by the managers of business organizationtoevaluateandanalyzeinformation.Hence,byapplyingthetoolsand techniquesofmanagementaccountingmanagerspreparesuitablereportthatmakes contributionineffectivedecisionmaking.Oneofthemainobjectivesofbusiness 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 makingappropriatedecisionsthroughthemeansofreporting.Itfocusesonmaking 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 impacton customer decision making. In thisregard, price optimizationsystemprovidesassistancetoDellinevaluatingthebehaviorof 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 actualperformances(Baldvinsdottir,MitchellandNørreklit,2010).Hence,by evaluatingeachaspectbusinessentityofDellcantakesuitabledecisionfor 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 financialand non-financialinformation.Hence, by undertakingand evaluatingreports 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 fromthenumberofunitsmanufacturedunitcostcanbeassessedbyhigher 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.Inthis,byusingsuchreportconcernedauthorityofDellcanassess 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
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