Management Accounting Systems and its Applications

Management
Accounting Systems
and its applications

Table of Contents
INTRODUCTION ..............................................................................................................3
MAIN BODY.......................................................................................................................3
Task 1.............................................................................................................................3
Task 2.............................................................................................................................6
Task 3...........................................................................................................................12
Task 4...........................................................................................................................13
CONCLUSION.................................................................................................................15
REFERENCES................................................................................................................16

INTRODUCTION
The field of accounting is too wide it is not limited till the recording of transaction
of financial aspects. Management accounting is one of the key form of accounting which
is linked to process of helping internal department of business entities by preparing
internal reports (Novas, Alves and Sousa, 2017). Under this accounting all types of data
are gathered and recorded in a systematic form. Main objective of this project report is
to explaining role of this accounting as well as its functions for business entities. In the
report KEF limited company has been chosen which is a medium sized manufacturing
business entity. The report covers detailed information about different types of MA and
reports. As well as various form of planning tools are also mentioned along with
importance of this accounting in sorting monetary issues.
MAIN BODY
Task 1.
Mean of MA and its types.
MA- As above discussed, it is a form of accounting which is aligned with process of
gathering monetary and anti monetary data from different transactions. After that using
this gathered data for preparing internal managerial reports. It consists vital range of
accounting systems which are mentioned below in such manner:
 Cost accounting system- It can be defined as a type of accounting system which
starts with process of making projection of future expenditures and costs. The
objective of this prediction of cost is to help finance department of companies in
order to do proper use of available resources and to minimise overall
expenditures (Chiarin and Vagnoni, 2015). It is essential for companies because
by help of this accounting system, managers can assess total number of
expenditures during a particular time period. As well as can evaluate variation
between actual and standard costs. In the KEF limited company, they apply this
accounting system which is helping them in order to control expenses which
occurs in operating different activities and operations.

 Price optimisation system- In this accounting system, a systematic process of
analysing market demand and situation is followed. Main objective of applying
this process is to evaluate customers' demand for a particular product. It is
essential for companies in order to set prices of products and services as per
market condition. In the aspect of KEF limited company, their sales department
applies this accounting system to set prices of manufactured items.
 Stock management system- It is a type of accounting system which is linked to
assess quantity of various form of material by help of techniques like last in first
out method, first in first out etc. This is essential for companies in order to track
various kinds of goods stored in warehouses such as raw material, finished
goods etc. In the KEF limited company, they apply this accounting system for
evaluating actual quantity of material on a daily basis so that accurate decisions
can be taken by managers.
 Job order costing system- This can be defined as an accounting system that
computes the cost of each individual output by help of assessing cost of job
(Maas,Schaltegger and Crutzen, 2016). It is being implemented in those
enterprises in which portfolio of products is higher. This accounting system is
essential for companies in order to minimise cost of job and activities under
control. In the KEF limited company, they apply this accounting system for
evaluating cost of activities separately and for minimising cost of job.
Various kinds of MA reports.
MA reports- These are types of report which are prepared by companies with an aim of
making effective planning, better decision-making and for measuring actual
performance. Accountant of KEF limited company produce below mentioned reports
such as:
 Budget report- It is a type of report which is prepared by help of different types of
budgets. Under this information regards to estimated income and expenses is
included along with the value of variation. It contributes to managers in order to
track monetary performance. In the KEF limited company, their accountants
prepare this report for helping managers by providing data of actual performance.