Management Accounting Systems & Techniques Assignment Sample

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Management Accounting Systems& Techniques
Table of ContentsINTRODUCTION...........................................................................................................................1LO 1.................................................................................................................................................1P 1. MA and systems of MA........................................................................................................1P 2. Contrasting methods of MA reporting.................................................................................2LO 2.................................................................................................................................................3P 3 Showing preparation of financial reports of the company by using appropriate techniquesof management accounting system..............................................................................................3LO 3.................................................................................................................................................7P 4. Benefits and limitations of budgetary tools..........................................................................7LO 4.................................................................................................................................................9P 5 comparing various management accounting systems adopted by different organisations inorder to respond to different financial problems..........................................................................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONManagement accounting is an effective technique of using various financial andaccounting data in order to get better results which helps internal management of the company intaking strategic decision. This helps in effective analysis of the financial data in order to predictthe future and it also aids in controlling the functions for better results and outcomes.This report will examine the importance of management accounting and its differenttypes of management accounting system. This study will highlight different techniques ofmanagement accounting reporting. This study will also use various cost accounting techniquessuch as marginal and absorption costing. It will further evaluate use of various planning toolswhich are used for budgetary control. It will further examine various financial difficulty and takenecessary measures to resolve such issue in a timely and systematic manner.Hargreaves Lansdown plc. is a type of public limited company which was founded in theyear 1981. This is a financial service company, which is headquartered in Bristol, UK.Hargreaves Lansdown plc. provides various services such as ISA, SIPP, Annuities, currencyservices, fund dealing, retirement services, share dealing, investing, drawdown, financial advice,foreign currency exchange, etc.LO 1P 1. MA and systems of MA.Management accounting (MA) is a crucial process which helps in analysing variousbusiness activities in order to take strategic decision in an accurate and timely manner. MA is aprocess which helps internal staff of the organization to take strategic decision. This processhelps in analysing the operations and cost of theHargreaves Lansdown plc.MA SystemMA system is a systematic process which helps in decision making and formulate anaction plan in order to analyse the action and operation of the business. MA system helps incontrolling cost which leads to higher profitability (Granlund. and Lukka, 2017). MA systemmain purpose is to forecast the future and value stock for proper functioning of the HargreavesLansdown plc. This Managerial accounting system aids in financial planning, variance analysis,capital budgeting analysis and break even analysis which helps in viable decision making for thefuture growth of Hargreaves Lansdown plc.Cost accounting system:This system is known as costing or product costing system. It isa framework which evaluates the cost of the goods produced or services rendered by thecompany. This system helps management in analysing the profit for the business, valuation ofstock and cost control. (Malmi, 2016) established the fact that, accurate estimation of cost foreach good produced is critical for the profitable operations of theHargreaves Lansdown plc.Inventory management system:This system is a software system which helps in trackingthe inventories, material tracking, inventory levels and finished products, orders, automatedrecording, sales and delivery(Granlund. and Lukka, 2017). This system helps in management inestimating the required material top produce the desired level of goods. This helps in properutilization of resources and also avoid overstocking and under stocking which leads to higheroperational performance and productivity.Price optimization system:This a systematic framework which analyses and determinethe change in the behaviour of customers with the change in the prices of various products andservices offered by theHargreaves Lansdown plc. This MA system will find the best price whichwill generate higher profits. (Malmi, 2016) sought to determine the fact that, price optimizationsystem helps in evaluating respond of different customer segment with the change in price. This1
helps organization in determining the price which best meets the organizational goal and attainhigher profits.Job costing system:This MA system is a process of assigning manufacturing cost to theeach individual unit of the output or production. This method is used when the each productproduced is different from the other and has a particular amount of cost attached to them. Thismethod helps in determining the actual cost by evaluating the material, overhead and labour cost.P 2. Contrasting methods of MA reporting.Management accounting produces various management accounting reports which helpsin internal stakeholders of the company to take necessary decision and evaluate the financialposition of the company for the particular period. MA reports helps in formulating plan, takestrategic decision, regulating and measuring performance which results in better operationalproductivity.Budget report:It is MA report which compares the actual performance of the companywith the estimated projected plan (Hall, 2016). Budget report helps in determining the variationand the internal stakeholders will evaluate the cause of the deviation and will take necessarymeasures on a timely manner for higher results. On the contrary, (Hall, 2016) argued andestablished the fact that, budget report is based on estimation and future prediction which resultin deviation and give inaccurate results when compared with the budgeted plan. In the otherhand, (Tappura and et.al., 2015) said that, budget report is based on past predictions which helpsin determining the future which leads to higher sustainable growth. This report also helps inprioritizing the spending and control cost for higher operational efficiency.Accounts receivable report:This is an effective report which analyses the list of variousunpaid customers, to whom goods were given on credit. This report helps in determining theinvoices which are due for payment. It also helps in determining the duration or time periodwithin which the cash can be recollected from the unpaid customers. Only credit transactions areentered into the report. The customers owe money to the company with the surety to repay on thefuture date. This helps company in determining the financial position of theHargreavesLansdown plc. If the company is collecting cash at a lower rate then it's the warning sign for thecompany that it has greater credit risk which leads to lower profitability and operationalefficiency of the business.Performance report:This is a detailed statement which measures the performance of theparticular activity in relation with the success and generation of profit from the particularactivity. This helps internal stakeholders of the company to analyse the current status of theproject and forecast the progress in order to determine which activity is more beneficial in orderto generate higher profits and achieve desired goal (Tappura and et.al., 2015). This report takesinto consideration utilization of resources, communication in the project progress, effectivemanagement plan, productivity of the employees and monitoring the same in order to prioritizethe particular activity which is highly beneficial for the development and growth of theHargreaves Lansdown plc.Cost report:This is a detailed statement which assist business in determining the costattached with the particular unit or the level of production. This report helps in ascertain theexpenses (Turner and et.al., 2017). This helps in controlling cost ad reducing wastage of cash byallocating cost in a systematic and efficient manner. Cost report determines the cost of project,goods produced, processes in order to ensure that the financial results are accurate and viable.The cost report helps in determining the manufacturing cost of producing a particular product.This is crucial for selling and production plan which helps in strategic decision making. This2
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