Management Accounting: Systems, Techniques, and Applications

UNIT – 5 Management Accounting
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Contents
Introduction:..................................................................................................................... 3
P1: Explain management accounting and give the essential requirements of different
types of management accounting systems...................................................................4
P2: Explain different methods used for management accounting reporting.................7
P3. Calculate costs using appropriate techniques of cost analysis to prepare an
income statement using marginal and absorption costing............................................9
P4. Explain the advantages and disadvantages of different types of planning tools
used in budgetary control...........................................................................................14
P5: How organizations are adapting management accounting systems to respond to
financial problems.......................................................................................................16
Conclusion:.................................................................................................................... 18
References:....................................................................................................................19
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Introduction:
The report helps in preparing an understanding about the various types of management
accounting systems and techniques used in determining the cost and other
determinants for improving the operational performance of the enterprise. In order to
fulfil this purpose Zylla Company has been taken into consideration which is large
multinational organisation and having its objectives for further expansion. The results of
this expansion has been the acquisitions and restructuring which needs adoption of an
adequate information system which can help managers in taking important decision
regarding the company. The report will help in describing these functions in respect of
the company. The techniques adopted for cost management of company will be
described and reports will be generated as per the same. The various types of tools
which are necessary for operating an effective budgetary control in the company and
responding to various problems relating to financial aspects will be explained in this
report.
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P1: Explain management accounting and give the essential requirements of
different types of management accounting systems.
Management Accounting:
The management accounting can be defined as the system which is concerned with
identifying, measuring, accumulating, preparing, interpreting presenting the financial
information which can be used by the management for planning, evaluating and
controlling the various operations and processes of the organisation. The role of
management accounting is thus significant in determining the appropriate economic
decision for the company which can assist in sound growth and development (Bromwich
& Scapens, 2016).
The traditional management accounting system was only concerned with managing the
business affairs but after the industrial revolution which was recognized in 1990 there
was need regarding the value added reporting which can allow for efficient and
effective decision making and management accounting evolved as a source of making
required information available to the enterprise.
Management accounting Financial accounting
The purpose of management accounting is
to assist management in planning and
controlling the business operations.
The purpose of financial accounting is
related with helping investors and creditors
in taking investment decisions (Arjaliès &
Mundy, 2013).
The detailed reports are presented in this
information system of the company.
The summarised reports are generated in
the form of financial statement of the
company.
The reports are generated at the will of
management and normally frequently.
The reports are generated periodically as
and when mandated.
Management accounting systems along with their essential requirements:
Management
accounting
systems
Description Essentials
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