Management Accounting System Assignment - Jupiter PLC

Added on - Nov 2020

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MANAGEMENTACCOUNTINGSYSTEM
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3Examining the meaning of Management Accounting and its objectives...............................3Description about the methods used for Management Accounting Reports..........................3Examining the benefits of Management Accounting System and their application..............4Evaluation about the management accounting system and management accounting reportingintegrated in organisational process......................................................................................5TASK 2............................................................................................................................................5Calculation of Net profit by applying absorption and marginal costing techniques ofManagement accounting.........................................................................................................5TASK 3............................................................................................................................................7Advantages and disadvantages of different types of planning tools used in the budgetarycontrol....................................................................................................................................7Analysing the use different planning tools used for preparing and forecasting the budgets.9Analysation of several planning tools for responding the issues associated with finance...10TASK 4..........................................................................................................................................11Comparison with the business organisation in context of solving issues by using budgetarycontrolling tools...................................................................................................................11Examining the contribution of management accounting in achieving the organisationalsustainable success..............................................................................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONThe management accounting is the process of preparing statistical and financial reports ofthe business operational transactions and mainly concerned without the costing of their businesstransactions. Management accounting refers to the process of preparing management reports andaccounts that provide accurate and statistical information of the business operation as in timeefficient manner and required by the manager for making the operational decisions. Not onlythis, the management accounting pertain several techniques for the accurate recording, analysingand for the proper ascertainment of the business operations by removing the influencing factors.In this report, the Jupiter PLC has been taken into the account for the proper understandings ofthe importance and functioning of the management accounting and its system(Christ, 2014).TASK 1Examining the meaning of Management Accounting and its objectivesManagement accounting:It defines the way of accounting by which managers use theinformations in better way to take effective decisions for management. It helps in theirperformance of management and control functions. It helps in strategic, performance and riskmanagement of business. It is model based accounting which helps in decision making. It isprimarily forward looking and according to the need of managers. It provides information aboutthe product, plant , individual and tasks. It follows some specific methodology. There aredifferent accounting systems as cost accounting, inventory management, job costing system,price optimising system etc. The requirement of various management accounting system are asfollow:determining of objectives and goals.1.It helps in constructing various methodology and future forecasting.2.It provides help to customers.3.It helps in taking decisions.4.It add increment in the the effectiveness in the business.5.It helps in maximization6.provides safety from trade cycle.
Description about the methods used for Management Accounting ReportsFor planning, controlling and making decision management accounting report is majortool used by managerial personnel which is purely based on data gathered through analysis ofrevenue statement, cash flow statement and financial statement(Pavlatos and Kostakis, 2015).Analysis of these data includes following methods that are used for management accountingreports:Cost Reports:This method mainly pointing towards prices of items. Price of item isdetermined by considering price of fresh product, overheads, labour and any other cost. Theprice or cost of each item is helpful for manager to make comparison of prices and selling cost.Budget Reports:Budgets are prepared by using past year data to make future projectionsto achieve targets and goals which is used while reporting . An organisation want to get its goalsand target while acting within the budgeted figures.Execution Report:Main target in this method is execution of activities which play majorrole towards achieving targets. Reporting by using this method provide a strength tomanagement to face future uncertain demand and additional expense which may occur.Examining the benefits of Management Accounting System and their applicationDue to inherent situations or conditions a completely efficientmanagement accountingsystem is not possiblebut every such system has its own advantages and benefits. The followingare the benefits of a Management Accounting System and their application :1.Increase in capabilities:The main reason for which companies adept managementaccounting is to increase capabilities which assists management to perform better.Management accounting system enables the organisation to bring their capabilities toincrease profitability. It increases capabilities of an organisation as a whole.2.Increase in profitability:Using capital budgeting and budgetary control undermanagement accounting system managers eliminates the extra pay-off and expenditurewhich increases the percentage of profitability(Leitner, 2013).3.Smoothing the decision making process:Management accounting system involvingdecisions and other related activities which helps management to take decisions quicklyand accurately. Management makes a analysis report with simple explanations. In thisreport management represents the key areas of financial statements. It gives powers tomanagement executives to make appropriate decisions for the company's improvement.
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