Management Accounting System Assignment (pdf)
Added on 2021-02-19
21 Pages4381 Words864 Views
Finance
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MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1LO1..................................................................................................................................................11.1.1 Management accounting definition...............................................................................11.1.2 Definition of management accounting system..............................................................11.1.3 Management accounting system adds value to the organization...................................21.1.4 Discuss the role, origin and principle of management system......................................21.1.5 Difference between the financial and management accounting....................................2Management accounting.........................................................................................................21.2.1 Explain the types of management accounting system...................................................31.2.2 Benefits of the management accounting system...........................................................31.3.1 Explain the characteristic of good management system................................................41.3.2 Why there is importance of the information to be understandable...............................41.3.3 Types of managerial accounting report.........................................................................4LO2..................................................................................................................................................52.1.1 Definition of cost along with its different types and analyses.......................................52.1.2 Cost volume profit, flexible budgeting and cost variance.............................................52.1.3 Application of absorption and marginal costing...........................................................62.2.1 Fixed and variable cost along with cost allocation........................................................82.2.2 Normal and standard costing, activity based costing and role in setting price..............82.3.1 Inventory cost and type.................................................................................................92.3.2 Benefits of reducing inventory cost.............................................................................102.3.3 Valuation method........................................................................................................102.3.4 Cost variance...............................................................................................................112.3.5 Overhead cost..............................................................................................................11LO3................................................................................................................................................113.1.1 Preparing budget..........................................................................................................113.1.2 Different types of budget.............................................................................................113.1.3 Alternative budgeting..................................................................................................123.1.4 Behavioural implication of budget..............................................................................12
3.2.1 Pricing strategies.........................................................................................................123.2.2 Determination of price.................................................................................................123.2.3 Supply and demand consideration...............................................................................123.4.1 Porters five forces analysis..........................................................................................12LO4................................................................................................................................................134.1.1Key performance indicators.........................................................................................134.2.1Financial governance and how it helps in solving financial problem..........................134.3.1 Characteristics of an effective management accountant.............................................134.3.2 Role of the skills in order to deal with the problems...................................................144.4.1 Development of strategies and systems for effective and timely reporting, full disclosure..............................................................................................................................................14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
INTRODUCTIONManagement accounting refers to the accounting done by the managers to well managethe resources with requirement of the company to take the managerial decision for thedevelopment of the organization. The managerial accounting helps in the proving financialinformation of resources by the help of internal team and management of the company. Financialaccounting is total different from the financial accounting as well as cost accounting.Management accounting is the major concept in which financial accounting and cost accountingcomes. This help in the financial, Cost and business analysis as the requirement of tool andtechniques for the development with the help of this better decision-making can do. The reportwill discuss the budget plans, strategic planning, pricing, accounting system and there followingdescription of reports.LO11.1.1 Management accounting definitionThe management accounting is also defined as managerial accounting which meansaccounting done by managers of financial information and resources as to make the decisionregarding the development of company. Internal management of company use the managerialaccounting to meet the objective and target of the company with effectiveness and efficiency.This accounting is different from financial and cost accounting as the management accounting isborder concept. This help in analysis of business, economics, trend in market and finance ofcompany.1.1.2 Definition of management accounting system.Management accounting system refers to the process of identifying, organizing, planningand the analysis the accounting data for to the management as to take strategic decision toincrease the effectiveness and efficiency of organization by devising the planning andperformance of system of management. There are variety of management accounting systemsuch as cost accounting system, job costing system, inventory management, price optimizingsystem and the job cost system. The management accounting system (MAS) provide theinformation towards the strategic sense making as it somewhere neglect the relationship betweenthe dimensions and the use of MAS.
1.1.3 Management accounting system adds value to the organization.The management accounting system adds the value to the working of organization asthere is various management system that competitive in providing the information in the cariousdepartment. The management accounting adds the value to the organization is various ways suchas continues improvement. Through the proper decision-making there is continuousimprovement in the services along with total waste management. The quality management isdone by managerial accounting as to bring the efficiency and effectiveness in organization. Thevalue addition is cost management by controlling the cost of the goods produced and profitmargin.1.1.4 Discuss the role, origin and principle of management system.The origin of management accounting has evolves from the cost accounting techniquesthat were having the development in England in the duration of industrial revolution according tothe traditional management accounting.The major principle of management accounting-Influence- the management accounting gave the start and end through conversation to take themanagement decision. So the communication should be very influential in the company so thatthe management can improve the quality of work.Relevance- the information passed to management to have decision should be relevant alongwith the needs to be kept in mind with decision style used for decision. There should be balancedbetween internal and external, financial and non-financial.Value- take the decision is not as important but the impact of decision has also to be analysed.The company should take the decision keeping all factors, risk and opportunities.Roles-It helps in decision-making of the organizationIt targets the vision and mission of companyFocus on future trendsIncrease the efficiency and effectiveness of company.1.1.5 Difference between the financial and management accountingBasisFinancial accountingManagementaccountingStandard financial statement and reportsSpecialized data products for the
Definitionare prepared.e.g- cash flow, balance sheet, incomestatement.decision-making are prepared bymanagers.UsersFor the assessment of company heathexternal users analysed the financialstatement.e.g- stakeholders, investors.For purpose of decision-making theinternal users analyse the managementaccounting.e.g.- managers, general managersPurposeThe past data are analysedHave the focus on the future trends.AuditThe records of financial accounting areaudited as they only contain the financialinformation.They are not audited as they are onlyfor the decision-making purposecontains financial and non-financialinformation as well.1.2.1 Explain the types of management accounting systemInventory management system- the management of inventory which are produced andissue by the company. The management is done to maintain the low level stock and safety levelso that the management can take decision.Price optimizing system refers to system in which the determination of the prices of the variousproduct as to increase the profitability (Senftlechner and Hiebl, 2015). The determination ofprices in done in way on the basis sales and cost model and then the decision are taken by themanagerial what should be the price of the product.Job costing system- the term refers to system in which the accumulation and assigning thedifferent manufacturing cost to the single individual output. It simple means the tracking of jobin the terms of cost and revenue and whether it is profitable to the organization or not.1.2.2 Benefits of the management accounting system.Inventory management- it helps in the accuracy of orders of inventory management alongwith strategy implementation of organized warehouse.Cost management- help in improvement of efficiency and recognition of profitable andunprofitable activities. It provides the suitable information for planning and risk management incompany.
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