Management Accounting, Systems and Techniques: Assignment
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Added on 2021-02-19
Management Accounting, Systems and Techniques: Assignment
Added on 2021-02-19
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ManagementAccounting, systems andtechniques
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1: Management accounting system and essential requirement of different kind of accountingsystems........................................................................................................................................3P2: Different kind of methods of management accounting reporting.........................................4M1 Benefit of management accounting system. ........................................................................6D1. Management accounting system and accounting reports are integrated withinorganisational processes..............................................................................................................7TASK 2............................................................................................................................................7P3: Preparation of income statements with the use of absorption and marginal costing method.....................................................................................................................................................7M2: Various types of management accounting techniques.......................................................11D2: Critical analyse of data collected from income statements................................................11TASK 3..........................................................................................................................................11P4: Advantages and disadvantages of planning tools used in budgetary control.....................11M3. Analyse the use of different planning tools and their application for preparation andforecasting budgets:..................................................................................................................13TASK 4.....................................................................................................................................14P5: Adaption management accounting system to respond to financial problems.....................14M4. Responding to financial problems, management accounting can lead organisations tosustainable success....................................................................................................................15D3: Critical evaluation to reduce financial issues.....................................................................16CONCLUSION..............................................................................................................................16REFRENCES.................................................................................................................................17
INTRODUCTIONManagement Accounting is an essential part of management that help to prepare thebusiness cost as well as operations to make effective decision in order to attain the business goalsignificantly. It include accounting information that help the firm to formulate policies in orderto assist day to day business activities and maximise the profit effectively (Rossing, 2013).Along with that it carry both monetary as well as non monetary information that help in betterperformance of business by formulating effective policies. For the better understanding of reportKEF manufacturing company has been selected which is small business and operate within UK.This report cover following topics such as understanding on management accounting systems.Determine proper technique to prepare income statement by using marginal and absorption cost.Moreover, explain the uses of planning tools in management accounting. Further, compareorganisations on the basis of management accounting to respond financial problem.TASK 1P1: Management accounting system and essential requirement of different kind of accountingsystemsManagement accounting system refer to the financial as well as non financialinformation that help the manager to make effective business decision in order to perform day today business activity. The main advantage associated with management accounting is that themanagement can prepare the effective plan and execute it effective for the better operations ofbusiness. There are various management accounting system some of them are defined below: Inventory management system: Inventory management system helps in propermanagement of stock whether it is in form of raw material, semi finished or finished good(Clinton and White, 2012). Here decision are made on the basis of purchase of new inventory orthe requirement of warehouse to store the inventory in order to minimise the chances of defectsthat leads to wastage. Herein, KEF manufacturing company uses inventory management systemto track the stock and make effective decision. Cost accounting system: This system helps the company to determine the overallexpenditure incurred to carry out various activity of business. It is an effective system as it helpsto minimise the chances of unnecessary expenditure that saves the cost and enhance theprofitability of firm. In relation to KEF manufacturing company uses cost accounting system to
manage the operations of business and make optimum utilisation of resources to control theoverall cost incurred by firm. Thus, it is critical for company to identify the exact cost incurred inthe manufacturing of product due to which the whole system is prepared on the basis ofanticipated amount. Price optimisation system: It is an effective management accounting system that helpthe firm to determine the best suited price of product. This determination is made on the basis ofcustomer reaction toward the various pricing level. In terms of KEF manufacturing company canuses this system to identify effective pricing strategy and allocate suitable prices for the differentrange of product and services. Thus, company finally lands up setting that price that can help thefirm to meet their objectives like expansion which leads to maximising the operations ofbusiness. Job costing system: Job costing system is a vital accounting system that help the firm todetermine different activities performed in a business as well as cost associated to carry onvarious business activity. It gives brief information regarding the cost of job so that firm candetermine effective decision. In context to KEF manufacturing company, the manager can makethe use of this system to evaluate various cost and perform all the internal activities effectively. Hence, these system are basically used by KEF manufacturing company to achieve thedesired result by managing the overall system effectively. P2: Different kind of methods of management accounting reportingManagement accounting report emphasize on the internal information of business whichis received through financial accounting. It is basically used to conduct better planning, makeeffective decision and regulate the internal performance. These report are generated via bookkeeping and accounting method due to which these report need to be crafted effectively.Moreover, different company chooses different method to manage the report in order to recordthe financial and non financial information suitably (Songini, Gnan, and Malmi, 2013). Herein,KEF manufacturing company can use various type of accounting report which is determinedbelow: Inventory report: Inventory report are prepared to keep all the information associatedwith stock. It also include the movement of inventory from one level to another so that companycan track the available stock and manage the flow of inventory. Herein, KEF manufacturingcompany can manage physical inventory by using managerial accounting report that help to
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