Types of Management Accounting Reports
Added on 2020-07-22
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Management Accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Explaining management accounting and essential requirement of different types ofmanagement accounting systems...........................................................................................1P2 Explaining different methods used for management accounting reporting......................3M1 Evaluating benefits of management accounting systems and its applications.................4D1 Critically evaluate how management accounting systems and management accountingreporting is integrated within organisational processes .........................................................4TASK 2............................................................................................................................................5P3 Calculation of cost using correct techniques of cost analysis to prepare an incomestatements using marginal and absorption costing.................................................................5M2 Applying management accounting techniques and financial reporting documents.........8D2 Interpretation of accurately applicable financial report for Putney Enterprise................8TASK 3............................................................................................................................................9P4 Explaining the advantages and disadvantages of planning tools used for budgetary control.................................................................................................................................................9M3 Use of various kinds of planning tools in producing adequate budgets for PutneyEnterprise..............................................................................................................................11TASK 4..........................................................................................................................................11P5 Comparing methods adapted to respond to financial problems......................................11M4 Evaluating the importance of management accounting systems in sustainable success andovercoming financial obstacles............................................................................................12D3 Analysing Planning tools leads to the sustainable success.............................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................14
INTRODUCTIONManagement accounting is that process which will be enabling all managers of any firmwhether big or small to access the information or data related to company. This will be tellinghow the managers are going to decide over investment proposals which are coming to them or tocompany. Management accounting enable managers who are been involved within decisionmaking procedure that how will they exact data from which source and then how would they beusing that particular data. Both type of financial and non financial information should beincluded within this system of accounting and then reporting it to higher level of managers. Thepresent report is specifically based on management accounting, how this is different fromfinancial accounting. The report will also be covering what are all type of different reportingmethods that are been employed by managers of company. The company which report would becovering is a SME enterprise of UK i.e., Putney Enterprise and at the end report will be coveringdifferent methods which are adopted financial problems.TASK 1P1 Explaining management accounting and essential requirement of different types ofmanagement accounting systems.Management accounting is basically concern with production of data so that managerscould use that information for their internal purpose and then making important decision making.All types of information which are been involved within this system is based on internal formand there are various management accounting systems which are been employed. Each and everysystem would be designed on bases of their information and need of management which will behelping in decision making. The very basic and common type of management accountingsystems that are used would be as under stated:Cost accounting system-This type of accounting system which is also called as product costing system is based onframeworks so that cost of each and every department or products could be estimated up to theirprofitability. Other than taking out profits of all products or working cost accounting is alsohelping to take out inventory valuation and then controlling of cost so that there is lesser amountof waste (Hopper and Bui, 2016). This system will also be having two different type ofaccounting systems namely job order cost and process costing. Once the total cost of whole1
company is been identified managers will be carrying out allocation of those cost to variousdepartments and products of firm. This allocation which is done by cost accountants would eitherbe based on activity based or traditional costing systems.Inventory management system-All the stock or raw material which is been used by company in carrying or producingend used products or finished goods are called as inventory. This will not only including rawmaterial but also the equipments or tools or methods that are used to produce or manufacturefinished goods. So it is essential for company that they are controlling bad use and wasting ofthat inventory which is very much important and integral part of company (Pemsel andWiewiora, 2013). This management of inventory could be done by using effective technology,better use of bar code printers or also with efficient staff or employees.This will be working as to see how inventory could be tracked by incoming and outgoingfrom warehouse and then effectively controlling that flow of stock. One of the main aim of thissystem of management would be mentioned ot as what is current inventory level that could berequired by company. That would be between minimum and maximum level of inventory whichwould be best suited so that chance of misplacement or wastage becomes minimum.Job costing system-This could be defined to as process of accumulation of all type of information based onproper allocation of each and every job, service or production specified activity and thenallocation of cost accordingly. Products and service that are been produced within organisationor company will be based on what and how much amount would be cost of manufacturing goodsand services. Job costing technique would also be used to inform about what could b a specifiedcost over particular job so that this would be informed to customer better known to as client ofcompany. There are particularly three types of information that are been used in this job costingsystem namely direct material, direct labour and overhead cost.Price Optimisation System-Under this system of management accounting technique various level of price that arethere at different level of demand of that particular product in market. These informations arethen combined so that data on inventory or cost at various levels are suggested and this will then2
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