Management Accounting Systems and its Applications

Management Accounting
systems and its Applications

Table of Contents
INTRODUCTION...........................................................................................................................3
SECTION 1......................................................................................................................................3
P1:Various types of management accounting systems and its essential use .........................3
P2: Different accounting reporting system ...........................................................................4
M1: Benefits of using management accounting system ........................................................6
D1: Critical evaluation of reporting system ..........................................................................6
P3: Different costing method use for evaluating net profitability of the company................6
M2: Evaluation of accounting techniques............................................................................10
D2: Critical evaluation of profit and loss statements...........................................................10
SECTION 2....................................................................................................................................10
P4: Advantages and disadvantage of using planning tools..................................................10
M3: Evaluation of planning tools.........................................................................................12
D3: Critical analysis of financial problems..........................................................................12
P5 Comparing the companies on their financial issues........................................................12
M4: Analysis on evaluation of current financial issues........................................................13
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is utmost important process a company use to carried out every
possible financial transactions those are done in everyday business operations. This is done in
order to record systematic posting of entries into different books of accounts. The primary aims
and objectives of managers is to ensure that every transactions should be put into their respective
statements in appropriate manner. The motive behind doing so is to attain their long term goals
within set time period (Burritt and et. al., 2011).
The information for the purpose of identifying impacts over the company can be followed
by using various accounting systems and their detail explanations would be summarise into
specific reports. This report consists of various aspects in accordance with Nero Ltd. With the
use of costing methods proper understanding of net profitability can examine. Use of planning
tools in budgetary control process are mention under this report. Some specific tools and
techniques those are helpful in resolving financial issues are discuss under this project.
SECTION 1
P1:Various types of management accounting systems and its essential use
In every business organisation there are crucial decision which is needed to be taken by
the managers in order to draw positive outcome during the time. For this purpose, managers
would required to have proper information that will be helpful in order to generate timely results.
In accordance to this, management accounting systems will assists by the department to identify,
summarise, analyse and record data as per their time of occurrence. Every resources would be
available to allocate various aspects of departments as per their demand and needs. This will
access them to accomplish their aims and work in full efficiency and their productivity would
also be enhanced accordingly (Management Accounting, 2017). Every systems is individually
essential for the betterment of an organisation growth and sustainability. This would aid in
making future expansion and investments in some other portfolios to generate maximum
revenues. Planning there resources in best and suitable manner can be helpful to maximise their
goodwill as well as their market share at the same time (Chen and et. al., 2011). There are
various accounting systems those are useful in this process. These are mentioned underneath:
Cost accounting system: For every manufacturing company cost is vital aspects which
will increase their production capacity. Without having sufficient techniques cost cannot be
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manage by the department. This would be directly or indirectly related with the production
process. Some costs are incurred over expenses like material, labour and other overhead. For this
plan, it will be vital fore the managers to make sure about total costs and expenses they are going
to be invested over the manufacturing of one units. The primary motive using this systems is to
control excess costs which is charged over production. The entire system will be divided
according to there requirement.
Inventory management system: This is a discipline activity which is primarily
associated with a particular shape and storing of goods into there warehouses. As there inventory
are kept at various locations within a facility to supply it from one destination to another. This
can help the managers to record every possible entry according to their data of occurrence. It is
one of the techniques of supervision of non-capitalised stock items. This simple means that right
stock should be having at the right quantity.
Price optimisation system: It is known as use of numerical analysis which is done by
the company in order to examine how clients will react over various prices for their products. It
is used to identify that Nero Ltd will be best able to meet it objectives like as increasing
operational gains. This focus on the facts that price and demand are associated to each other as
the price will be charged at a very high level this would not be able to increase sales because of
reduction on total demand. Although, it is the most appropriate prices which is set in order to
receive maximum profit during the time (Goyal, 2014).
Job costing system: Under this process, this will involve in different jobs that will be
needed to be perform during the production of products. At that time, those costs will be incurred
so that they require proper check system in order to examine exact cost for an individual activity
job costs. Apart from this costs that will be related to a group of job would be analyse according
to their time duration. This essential to evaluate total time and cost use by the company to
produce each product.
P2: Different accounting reporting system
A report is a detailed information about companies performance during an accounting
year. It is vital for every organisation whether small or large to make timely report so that proper
identification of their current position can easily be analysed. As it has been seen that report are
primary base of every decision making which is done by various shareholders and investors. The
sources of report preparation can be taken from different statements such as profit and loss,
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