Management Accounting Assignment : R.L. Maynard

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION .......................................................................................................... 3
P1 Management accounting and essential requirement in different management
accounting systems................................................................................................ 3
P2 Different methods used in management accounting report..............................5
P3 Calculate cost and difference among marginal costing and absorption costing
system.................................................................................................................... 6
P4 Explaining the advantage and disadvantage of various budgetary planning
tools ....................................................................................................................... 8
P5 Management accounting system responding financial problems....................10
Conclusion............................................................................................................ 12
REFERENCES............................................................................................................. 13

INTRODUCTION
Management accounting is most useful for the company for the purpose of making the most
important decision regards to firm. Thus, it includes both type of financial and non-financial data that are
used for the purpose of make the forwards decisions regards to business. In the present assignment there
is a mainly discussion on the the management accounting and how they are important for R.L. Maynard
to make most important decisions regards to business activities (Picker, 2016). Furthermore, there is also
describe among the marginal costing and absorption costing method that are used by the company to
determining the net profit. Thus, there is an also discussed in the report how management accounting
system respond financial problem.
P1 Management accounting and essential requirement in different management accounting systems
Concept of Management Accounting
Management accounting is a process it involves the managerial function such as
planning, organising, directing and controlling are done by the mangers, to prepare a final report
and making full control in formulation and implementation of an organisation's strategy. In this
way, it is a process of making a managerial report and account so that it will help to implement
day-to-day decisions by the mangers.
Importance of management accounting
 It helps to determine the aim of an organisation.
 Helps in preparation of plan
 Provides better services to customers
 Easy to make judgement
 It is measuring tool of performance
 It also increase the efficiency of a business
 Provide effective management control
Difference between management accounting and Financial accounting
Management accounting is presented internally, whereas financial accounting is meant
for external stakeholders. Although financial management is of great importance to current and
potential investors, management accounting is necessary for managers to make current and

future financial decisions. Financial accounting is precise and must adhere to Generally
Accepted Accounting Principles (GAAP), but management accounting is often more of a guess
or estimate, since most managers do not have time for exact numbers when a decision needs to
be made.
There are various things which are required in management accounting system in an
organization by the managers. It includes following:
Assets- Assets are resource which are required for organisation's operational activity. To
make a item as a asset, managers should own it or have a right control and use it. For example: In
a delivery business, truck is used to deliver the products so in this way truck is also known as
asset in a business. In other words, assets also have there economic value and it will provide
economic benefit to the business. So that use of truck to deliver the products is also have there
economic benefit for the business.
Liabilities- In organization liabilities is also known as the business obligations. This is
based on past events such as buy an equipment in a loan for a business is also an obligation of
the business. All this type of obligation which occur by the business can not be avoid in a
business place. For example: In a RL Maynard business organization, mangers want to hire the
employees and pay for them salary as per the work they do in the organization. In this way,
hiring an employees is a past event and giving them salary is an obligation which can be
performed by the mangers, so it is called liabilities in an organisation which cannot be avoided.
Expenses- Expenses are all those which reduces the assets or increase the liabilities for a
given periods. For example, In a truck business fuel which are consumed by the trucks for
delivery is called the expenses but buying a gas is an assets because it reduces the cash. In this
way all the expenses are incurred in a business organisation is a repeating events and it is useful
to successful running the business, Because without making an expenses a business can not
achieve what they want in future. Expenses in an organisation it may be various form, it includes
salary, maintenance expenditure, facility expenses etc. in this way many expenses are done by
the manager in RL Maynard. In a management accounting all the business maintain a accrual
basis, in this business can record each and every transaction before the payment for the expenses.
So that while making an entry in a business, all such expenses are recorded in a debit side of
income & expenditure statements.