Management Accounting Systems Lmda Tech

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Functions in relation to management accounting..................................................................1
P2 Management accounting systems and its types.....................................................................2
M1...............................................................................................................................................3
D1................................................................................................................................................3
TASK 2............................................................................................................................................4
P3 Use of marginal and absorption costing in preparation of income statements......................4
M2...............................................................................................................................................6
D2................................................................................................................................................7
TASK 3............................................................................................................................................7
P4 Various budgets and their merits and demerits......................................................................7
M3...............................................................................................................................................9
D3................................................................................................................................................9
TASK 4............................................................................................................................................9
P5 Use of balance scorecard approach........................................................................................9
M4.............................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In every business there are various aspects that are required to be taken into
consideration. For this there are various processes which are to be undertaken and they all will be
covered under management accounting (Strumickas and Valanciene, 2015). In this different
accounting systems are there which will be used and by them the objectives of the business will
be achieved. In this report which is made in respect if Imda tech there will be discussion of all
the functions which are carried out and by which growth will be achieved. In this process
budgets are the main tool to be used and they will be described in the report together with the
manner in which financial problems will be solved.
TASK 1
P1 Functions in relation to management accounting.
In any business the main focus is provided towards the enhancement of the value of the
business and for that there are various activities which will be required to be undertaken. For this
purpose the methods that have been specified will be used so that they can be used for the benefit
of the business (Vakalfotis, Ballantine and Wall, 2013). All the policies which are made in this
relation will be complied in the best manner so that best outcomes can be achieved.
For this it will be required that all the information to be used in this will be collected.
With the help of the data there will be decisions that will be made so that all the operations that
are performed will be done in the most effective manner. In addition to this there is another
method that is used which is financial accounting in which the aspects in relation to finanace will
be covered. The main difference which exist in between them are specified below:
Basis Management accounting Financial accounting
Information In business there are financial
and non financial aspects
which are used and they both
will be covered under this.
In this the information in
relation to finance will be
covered.
Format In case of it there are no
formal pattern that is specified
so can used any method.
In this financial statements are
prepared for which the format
has been specified.
1

Purpose In order to make decisions in
business information will be
provided by it to the managers.
In this the information is
provided to outside parties so
that they can make the best
decisions.
Time frame There is no time limit which is
specified in relation to it
(Hoque, 2002).
In this the time frame is
mentioned which is generally
one year.
Legal requirement No legal requirement is
specified in relation to it.
In this there is statutory
requirement that is to be
fulfilled.
Importance of management accounting
In order to manage the work in proper manner there will be requirement of this
accounting. With the help of this the activities will be performed in the most efficient manner
(van der Steen, 2011). The major advantages of this are:
 In this various policies for the benefit of the business will be made.
 With the help of this the cost efficiency will be achieved and this will be done as the cost
which are irrelevant will be avoided.
 By the help of it there ill be increase in the profitability of the business which will be
beneficial for the growth of the business.
P2 Management accounting systems and its types.
For the collection of relevant information there are various systems present and they are
described here under:
1. Inventory management systems: In the production of any product there is the
requirement of the inventory and so for that it is required that it shall be maintained in the
best manner (Ward, 2012). For this there will be various decisions that will have to be
made and for that information will be collected with the help of this system. In this the
level that is to be maintained in relation to inventory will be specified and order will be
placed in respect of that. By this the problems that arise in business due to this will be
avoided and business will be managed properly.
2