Management Accounting : Assignment Sample (pdf)
Added on 2021-02-21
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Management accounting and several types of essential systems................................................1TASK 2............................................................................................................................................3Calculate cost using appropriate techniques...............................................................................3(b) Reason for analysing variations in profit...............................................................................6TASK 3............................................................................................................................................7Using budgets for planning and control......................................................................................7TASK 4............................................................................................................................................9Identifying financial problem......................................................................................................9CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONManagement accounting is the process of analysing business costs and operations toprepare internal financial report, records and account for the managers (Arroyo, 2012). Thesereports provide help to manager in decision making process to acquire business goals andobjectives. In general terms it is the act of making sense of financial and costing data andinterpreting that data into useful information for management and officers within anorganization. In this report, to better understand the topic of relevant topic manufacturingHeatrod Element Ltd which based on UK and manufacturing household heaters at reasonableprices. The overall report focus on the different types of management accounting system as wellas report. There are calculating net profit through marginal costing and absorption costing.Additionally, determine several planning tools and accounting tools can help to face off variousfinancial problem. TASK 1Management accounting and several types of essential systemsIn modern era, in every organisation required to systematic approaches through internalmanager that use to manage and control the basic needs of business. Management accounting issystematic process which is used to collect, examine, measure and evaluate meaning financialinformation and posting them in correct accounts so that valuable decision is made to improveand increase profitability of business operations. Heatrod Element Ltd can use different types ofmanagement accounting system these are - Price optimisation system – The particular system based on the mathematical analysisthat carry out the information regarding to product and services by the fluctuation in price. Itrecords the information then applies it on cost and inventory to assistance and deciding price toincrease the profit. In Heatrod Elements Ltd, this system can help to set best prices as per therequirement of customers and it will help to company to increase gross provide and production(Chenhall and Moers, 2015) . Cost accounting system – It is mostly applied by manufacturing company in order tocomputation of valuation of inventory, profitability and cost control. Cost accounting systemtacking the process of inventory (i.e. raw material, work in process and finished goods) to1
analysis actual cost of production. In the context to Heatrod Element Ltd used the system toevaluate total cost involved while manufacturing valuable product. Job costing system – It is kind of cost accounting system where cost of a single unit hasbeen calculated. The particular system can be used to calculate value of different types ofproduct and it is especially used by manufacturing industry. In reference to Heatrod Element Ltdcan use the system to analysis the total number of employees who can involve in production unitas well as set prices of heater to focus on overall expenses. Inventory management system – It is a system that include of producing and oversees theinventory of the firm. For each organisation inventory management system plays role of successkey because it can track a record of stock at each stage. As a result it can help to reduce wastageand increase productivity. In context to Heatrod Element Ltd can apply the system in order toknow production units and aware for stocks. LIFO – Last in first out is method of inventory which can defined that stock come in lastthat was going first out. FIFO – First in first out selling those stock which is come first in the company. AVOC – In the method used material on average cost for the production. Presenting financial informationThrough management accounting provide financial information to top managementwhich is related to internal system and record into reports. These Information should be relevantto the user, reliable, up to date and accurate because it can help to decision making process andunderstand to actual position of the company (DRURY, 2013) . Different types of managerial accounting reportsManagement accounting reports are the important parts of the reports that can help tounderstand business activities of different departments. The reports will be prepared by managerof company and present into financial and statistical form. It is mainly prepare to take short termdecision on daily basis and provide way to business finance. A manager of the Heatrod ElementLtd prepare different types of management accounting reports to present actual performance andanalysis future improvement and development - Performance Report – The performance report present all detailed information ofcompany as well as employees. With the help of report analysis budgeted and actual varianceand take appropriate action if the variance is unfavourable. If variance is favourable that time2
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