Management Accounting Reports and Types: Assignment
Added on 2021-02-21
19 Pages6062 Words136 Views
Finance
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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................................3ACTIVITY A..............................................................................................................................................3PART A....................................................................................................................................................3Management accounting reports and types:..........................................................................................5Determination of manner of integration of systems and reporting within process of business entity...7Costs using appropriate techniques of cost analysis to prepare an income statement using marginal and absorption costs:.............................................................................................................................7Correctly use of techniques of management accounting and generate financial reporting documents:..............................................................................................................................................................12Interpret financial reports prepared and data for a range of business activities:.................................12ACTIVITY 2.................................................................................................................................................13Explanation of different planning tool used for budgetary control......................................................13Comparison of manner by which organizations are using management accounting systems to respondfinancial problems:...............................................................................................................................16Analysis of the way in which management accounting lead to respond financial problems................17Use of planning tools to respond financial problems:..........................................................................17CONCLUSION.............................................................................................................................................17
INTRODUCTIONManagement accounting is systematic process to prepare and present different types ofreports and accounts. It is related to internal system because it provides reports to internalmanagement (Laudon and Laudon, 2015). On the basis of these reports they were taking optimaldecisionand set core structure for monetary decision. It assess to staff members in effectivemanner and control to fiscal data to determine them for effectively attain of business and tradeobjectives. The main purpose of the report to facilitate and bring new changes within enterpriseto easiness in complex trade functions. To better understand of the report selected organisation,Baker Perkins Ltd is a British engineering company. It was founded in 1918 and manufacturingand process services to the food industry through the world. It is mainly dealing into breadmixing and forming equipment for plant bakeries. In the report consist of different type’s fmanagement accounting system as well as techniques of management account reporting whichcan help to conduct business activities and operations in effective manner. These are importantpart of any organisation and applying method f costing to calculate profit with the help ofmarginal and absorption costing method. Apart from the report, determine various types ofplanning tools which can help t prepare of different types of budgets to estimate of revenues andexpenses. Additionally, with the help of accounting tools solve to financial problems of thecompany. ACTIVITY APART AManagement accounting system and their fundamental requirementManagement accounting: Management accounting is a way of applying professionalknowledge, skill, technique and concept in preparation of accounting statements in a mannerwhich helps the managers in formulation of plans, objectives, targets etc. for the growth ofcompany. It focuses on providing good quality information to the directors that help them incollecting accurate, reliable, complete data. There is no legal requirement to preparemanagement accounts for an organisation. It can act as a future planning tool for managers ifeffective and informative decisions are taken for the welfare of organisation. This is required byadministration to keep a check on utilization of funds, resources etc. with the help of standardcosting and variance analysis. Baker Perkins appoints high qualified people who can design,develop its products so that maximum profit can be achieved with the use of managementaccounting tool. Management accounting systems: This is defined as a system of measuring, providing,evaluating operational and financial information that motivates behaviour of employees as wellas helps to achieve organisational objectives. Every business needs management accountingsystems to determine cost of products, availability of stock in warehouse etc. It is confidential
information related to the decisions made by directors for the growth of company. This isrequired by managers in formulation of strategic plans & actions, goals, targets etc. BakerPerkins uses this system to implement business strategies considering quality of the products.The company has installed a security check for its inventory which determines freshness of itemswith the help of management accounting systems (Plumb and et.al., 2017). Job order costing system: This is defined as a system which is used to record cost ofdifferent jobs performed by organisations. In Baker Perkins it is used by managers to analysedifferent processes which can be performed according to client's requirement. It is a veryimportant tool for companies as this helps in determining cost of each and every product orservice. This involves providing cost to every department like payroll, manufacturing, productionwhich further distributes to employees, direct material, labour, overhead, raw material etc. Oneof the major practices followed by Baker Perkins is to assess what the consumer wants as theyare the ones who will use and give reviews about the products. Inventory management system: It is defined as a system which records inventory withthe use of different software that help in tracking, recording etc. of goods. One of the used toolsis Info plus which takes control of overall stock, warehouse operations and shipping of products.Various methods are used to obtain value of goods which include LIFO: Last in, first out whichrecords most recently produced items that are sold first, FIFO: First in, first out where oldestitems are recorded as sold first, Weighted average cost method which uses an average todetermine the amount that goes under COGS and inventory etc. With the help of this system, acompany can improve its cash flow position, reduce dead stock and labour cost. This is requiredby supervisors to check availability of items at warehouse, optimal levels of stock, and ordergoods before lead time etc. Baker Perkins uses inventory management system to keep a qualitycheck of products offered to customers. It also uses efficient labour which carry anunderstanding of how much quantity should be used to prepare biscuits, bread etc. by which itresults in reduction of labor cost (Hilton and Platt, 2013). Price optimization system: It is a tool by which mangers can determine price ofproducts at different levels varying according to demand & supply factors. This is used indeciding value of products while maintaining their quality as per industry standards. The practiceof optimizing cost is followed by many industries like retail, banking, airlines, manufacturing,engineering etc. It uses different pricing strategies to optimize price levels such as competitive,value-based, penetration etc. by increasing short-term profits. This is required by managers toobtain a profitable position of an enterprise. Baker Perkins applies this system to the products byincreasing production of biscuits that are in high demand by public. The company also usescompetitive pricing to be able to design attractive packaging and maintain quality of goods thancompetitors. Cost accounting system: It refers to a system of classifying cost associated withdifferent type of products in such a way that every unit receives amount of consideration as per
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