Management Accounting: Types of Systems, Reporting, and Budgetary Control

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Management Accounting and the use of various management accounting systems...................3
Various methods used for management accounting reporting....................................................5
TASK 2............................................................................................................................................6
Cost calculation for formulation of profit and loss account........................................................6
TASK 3............................................................................................................................................9
Advantages and Dis-advantages of different types of budgetary control...................................9
TASK 4..........................................................................................................................................10
Management accounting system and their use for responding the financial issue....................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting is defined as a process of recording, summarising and
classifying all financial transactions related with the organisation. This includes formulation
ledger, trial-balance and journal in an manner that is easily understand and analysis by the
stakeholders of the organisation. In simple terms, management accounting is a process of
summarising all financial details and statements of organisation which relates with future
economic and non-economic activities that take place in the market. The main role of the
management accounting is to support the internal management of an organisation for formulate
effective and appropriate decisions for business. Morrison's is selected as an organisation for this
report which is a UK based retail organisation that manage store among different areas.
Moreover, this report will highlights on different types of management accounting systems
which are adopted by management and how management accounting techniques applied in the
organisation. Use of different planning tools among the management accounting process and the
comparison among two organisation for identify and understand the techniques through which
they respond towards financial problems.
TASK 1
Management Accounting and the use of various management accounting systems
Management accounting is a action based process which is used for formulating the
managerial accounts as well as reports which are developed by the financial manager. This report
are utilised by the manager for control and handle routine or daily operations of organisation.
Management accounting include the translate of financial data into comprehensible collection of
monetary data that is used by management for effective decision-making.
Morrison's is identified as one of the leading supermarket and retail organisation of UK
which offer a large variety of products. Therefore, with effective management accounting system
management and authorities of Morrison's generate competitive-edge or advantage to make
appropriate decisions for organisation.
TYPES OF MANAGEMENT ACCOUNTING AND THEIR USE IN ORGANISATION
With engage of effective management accounting system an organisation develop
organised framework which support managers for make sound and reliable decisions for
business. Some types of management accounting system are mention as follow:

 Cost-accounting system- This is also known as the product costing system which helps
to generate an effective framework that is used for estimate and forecast the future cost
which is incurred by organisation. Morrison's and other retail organisation utilise cost
accounting system for analyse the future cost and profitability of business. Along with
this cost-accounting system also forecast cost of engaged workforce, cost of direct-
material, cost of inventory, etc. which helps to analyse the estimated cost of products.
 Job Costing- The term job costing is used to determine cost of each manufactured unit
and all those organisation which is engaged among manufacturing of single units are
benefited by job costing accounting system. One of the most appropriate method of job
costing system is to estimate the separate cost engaged in job of manufacturing. Along
with this business which manufacture units take order according to the delivery of
products so budgets are prepared according to the number of product units.
 Inventory management system- The inventory management system is explained as a
management accounting system that maintain and monitor the inventory of organisation
including both number of raw-materials and finished products. Along with this an
effective inventory management system maintain the number of stocks which is require
for finished products. Along with this inventory management accounting system is ideal
for Morrison's because this helps to maintain number of inventories within the
organisation.
 Price-optimisation system- This system is identified as a method of determining the
price of different products. In the context of Morrison's manager utilise the price-
optimisation system because this helps to allocate the price of certain products and also to
analyse how buyer will react on those prices. Moreover, with an appropriate price-
optimisation system this is easy for management to calculate their profits because the
price-optimisation method help to decide ideal price of products which is not too high
and also not so less.
Use of Management Accounting System
Management accounting system such as price-optimisation is used by management
among all departments and this refers it is implemented among all sections of the Morrison's. So
with use of effective management accounting system all financial information is utilised in
proper manner in order to generate appropriate decisions.