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TASK 13 P1 Different types of management accounting systems: 3 P2 Types of financial reports: 7 TAS

   

Added on  2021-02-21

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Management accountingsystems and techniques

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Different types of management accounting systems:.............................................................3P2 Types of management accounting reports:.............................................................................5M1 Benefits of management accounting systems:.......................................................................6D1 Integration of management accounting systems with reporting:...........................................7TASK 2............................................................................................................................................7P3 Calculation of net profit with the help of management accounting techniques:....................7M2 Application of various management accounting techniques:................................................9D2 Interpretation of financial reports:.........................................................................................9TASK 3..........................................................................................................................................10P4 Advantages and disadvantages of planning tools used for budgetary control:.....................10M3 Use of planning tools for forecasting budgets:....................................................................12TASK 4..........................................................................................................................................12P5 Ways in which management accounting systems are used to resolve financial problems:..12M4 Analysis of how management accounting can lead to attaining success by responding....14to financial problems:................................................................................................................14D3 Planning tools used to respond financial problems:.............................................................14CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTIONIn today's business environment, every organisation is required to manage its businessactivities by preparing financial statements as it helps them to easily analyse the performance oftheir company. For this purpose, management accounting is used which is defined as a provisionof both financial and non-financial information for the overall development of an enterprise.Decision-making is a crucial aspect for every firm and an effective judgement can lead anorganisation to achieve greater heights. In the following report, a management accountant traineeis selected who works at Oshodi PLC (Management accounting, 2019). The manufacturing company specialises in the production of JOJO fruit juice across allage gaps and offers them critical facts about the need of managerial decision-making. This reporthighlights on various management accounting systems and reports opted by Oshodi PLC in orderto get clarification of information. It also includes various planning tools to identify and resolvefinancial problems that may occur on a day-to-day basis. A calculation of net profit figures isalso done under this statement with the help of management accounting techniques. TASK 1P1 Different types of management accounting systems:Management accounting: This refers to a practice where both financial and non-financial information is identified, measured, analysed, interpreted & communicated among thehigher authorities for the pursuit of organisational goals & objectives. Its scope is quite wide andvaries among the three areas i.e. strategic, performance and risk management. It is required byOshodi PLC to analyse business cost & operations for preparation of reports or records whichaids the directors in taking valuable decisions for the welfare of company (Abdelhak, Grostickand Hanken, 2014). Management accounting systems: These generally consists of internal systems whichare used by an organisation to measure and evaluate its processes for the overall development ofa firm. Usually, this is required among the members of Oshodi PLC to produce goods as per theneed & requirement of the customer in order to get maximise consumer satisfaction. Thecompany also uses management accounting systems by providing accurate, timely, completedata to the customers.

Price optimisation system: This refers to a system which is required by companies to setvalue of their products & services after assessing need & want of the consumer. It is used as atool which does a deep study regarding customer perspective on using the goods. Also, this canbe affected by demand and supply factors as they usually fluctuate with rising or fallingconditions (Berry, Broadbent and Otley, 2016). This is required by management to estimate priceof products offered by rivals and set the cost of goods accordingly. Oshodi PLC uses priceoptimisation system to evaluate price of various factors used while manufacturing JOJO fruitjuices like packaging, labelling, branding etc. Job-order costing system: It is a system which aims at producing goods or servicesaccording to the need & requirement of the user. Usually, all the activities performed under job-order costing system are related to achievement of goals & objectives of the firm. The ordersplaced by customers vary according to their desire, for example, some people can minimise onthe quality of products to get it for cheap however, other would want to get the best qualityproducts for which they can pay any amount. This technique is followed by directors of OshodiPLC to manufacture the production of JOJO fruit juices which can range from adding extraquantity of product, offering multi packs etc. Inventory management system: This is a system which ensures that stock is availableat the warehouse whenever in need. It confirms that adequate raw material for producing goodsare present at the right time and accurate place. To value inventory, various methods are opted bya firm i.e. LIFO, FIFO, weighted average which are mentioned below:LIFO: Last in, first out method states that the inventory which as arrived at the end isconsumed first.FIFO: First in, first out method states that the stock which is arrived at the beginning isconsumed first.Weighted average: This method divides COGS available for sale with the number ofunits present during the time of sale.Oshodi PLC values its inventory by using FIFO to avoid any products from gettingexpired so sell those juices which are manufactured first (Braun and et.al., 2014). Usually, everyorganisation follows and complies by this system and in this report, Oshodi PLC does the samein order to maximise the production of JOJO fruit juice. The company ensures that appropriatematerial, equipment is used in manufacturing the juice so that the quality is not compromised.

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