Management Accounting: Types of Systems, Reporting Methods, Costing Systems, and Planning Tools

Management Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
P1. Explaining the management accounting and give essentials requirements of different types
of management accounting systems............................................................................................3
P2. Explaining different methods used for management accounting reporting...........................5
P3 Assessing cost & profitability aspects by using absorption and marginal costing system.....6
P4. Explaining the advantages and disadvantages of different types of planning tools used for
budgetary control.........................................................................................................................8
P5. Comparing how organizations are adapting management accounting systems to respond to
financial problems.......................................................................................................................9
An explanation of the principles of management accounting...................................................11
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Management Accounting (MA) refers to the techniques which helps manager in taking
important financial decisions regarding long term and short term aspects. MA provides high level
of assistance in analysing data for future perspective so that organizational goals can be achieved
(Burritt and et.al., 2019). It is compulsory to assist management by evaluating efficiency and
control on segment of organisation. This study is based on Church's company was founded by
Thomas church in the year 1873 fall under the category of Private limited company is related to
high end English footwear manufacture. This study will cover management accounting and
essentials requirements of different types of accounting systems. Furthermore, it presents various
methods which used for reporting in MA. Besides this, it will discuss appropriate techniques to
prepare an income statement. Report also depicts planning tools utilized for budgetary control
along with the benefits and drawbacks It also highlights how accounting systems can be used to
respond financial problems.
P1. Explaining the management accounting and give essentials requirements of different types of
management accounting systems
Management Accounting- Different types of management accounting systems
Cost accounting systems- It is a structure used by firms to figure out cost of products for
analysis of profitability and cost control activities related to production using perfect inventory
system (Richardson and Yigitbasioglu, 2018). It may be called as accounting system is planned
for manufactures by tracking flow of stocks regularly through several stages of production.
Inventory management systems- It is the system in which include tracking of goods are
having in store, warehouse shelf and sale to distributors and retailers. It helps to check there
should be sufficient goods or raw materials to meet large demands without create any overstock
or extra inventory.
Job-costing systems- This system includes to accumulate information regarding costs
related with particular production or service job. It is necessary for deciding is a job is and helps
to company to make idea regarding value of labour, materials and overhead that may be used
while doing specific job.
Price-optimization systems- It is the system to analyse by company to focus that how
customers may react about different products or services via different channels. It may be called

as a strategy in which come to know that how clients are more sensitive regarding in changing
the prices of products and services.
Evaluating the benefits of management accounting systems and their application within an
organisational context.
Benefits of cost accounting system-
 It helps businesses accurately ascertain costs- To do this cost accounting depends on
different techniques like job, standard and process costing. It helps in cost assessment of
all facets of business which includes products, contracts, cost of processes or projects.
 It may improve cost efficiency- It has identified that it helps in improving cost
efficiency by creating competition between suppliers (TRUHACHEV, KOSTYUKOVA,
BOBRISHEV, 2017).
 It may inform better decision making- The main pros in which may inform better
decision making by developing better ideas and techniques to achieve maximum profits.
Advantages of inventory management system-
 Better Inventory Accuracy- It helps in improving inventory accuracy with solid stocks
and materials and may essential to meet demand.
 Reduced Risk of Overselling- It assists in reducing risk of overselling by tracking what's
in stock or backorder then may not sell products.
 Greater Insights- It involves tracking and the control of stock may be easily spot trends
of sales or recalled products or end dates.
Benefits of Job Costing Systems-
 It allows you to determine productivity- In the context of chosen company allows to
determine employee’s productivity by providing sufficient training. It may be possible
that one employee is more productive than others.
 It may help you avoid mistakes- This may help in avoiding mistakes before starting a
project. If you see at numbers then think that you are not getting enough pay, you may
turn it down and do focus on energy to take profitable opportunities.
 It may grow with your business- It may grow in business by construction and real estate
companies like large and small may use job costing to analyse costs and profits.
Benefits of Price optimization systems