Management Accounting : Sample Assignment

   

Added on  2021-01-01

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MANAGEMENT ACCOUNTING
Management Accounting : Sample Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Explain management accounting and essential requirements of management accountingreports..........................................................................................................................................1P2: Methods used in management accounting reports................................................................3M1: Benefits and applications for management accounting systems.........................................4D1: Critical analysis about the accounting report system...........................................................5TASK 2............................................................................................................................................5P3: Estimation of cost and net income by preparing profit and loss statement with the usemarginal and absorption costing.................................................................................................5M2: Various kinds of management accounting techniques........................................................8D2: Interpreting the data.............................................................................................................8TASK 3............................................................................................................................................9P4: Merits and Demerits of various planning tools used under budgetary control.....................9M3: Analysis of using planning tools.......................................................................................10D3: Evaluation of planning tools..............................................................................................11TASK 4..........................................................................................................................................11P5 Comparison on how organisations are adapting management accounting systems............11M4: Analysis of financial problems..........................................................................................12CONCLUSION ...........................................................................................................................13REFERENCES..............................................................................................................................14
Management Accounting : Sample Assignment_2
INTRODUCTIONAccounting process relates to recording, classifying, collecting, summarising andinterpreting information related financial transactions of business. accounting process isbroadly classified in two broad categories that is financial accounting and managerialaccounting. Financial accounting process is related with preparation of financial statements of acompany such as statement of profit and loss , balance sheet and cash flow statement. Whereasmanagement accounting is accounting which is related with process of preparing managerialreports by utilising financial statements of company by taking into consideration futureeconomic and non economic activities of market. These managerial reports are then used byinternal management of company so that they can formulate policies for company according totrends of market and setting of organisational goals( Abdel-Kader, 2011). below project isprepared on “Sollatek (UK)” which is a small scale industry dealing in Software systems. Thisproject report discusses about systems of management accounting and how to develop aunderstanding of them. Application of certain techniques of management accounting. utilisationof planning tools that are used by managers in management accounting. Comparison of ways inwhich companies can utilise management accounting reports for responding to financial issuesfaced by companies.TASK 1P1: Explain management accounting and essential requirements of management accountingreportsManagement accounting is process of accounting which relates to preparation ofmanagerial accounting reports which is prepared by accountants of company so that internalmanagement of company can make utilisation of them for purpose of formulation of policiesand setting of objectives of company according to trends that are applicable in market.management accounting reports are prepared with use of financial statements of company suchas statement of profit and loss, balance sheet and cash flow statement. These reports also takesinto consideration future economic and non economic trends of market that will be applicable ineconomy in future. managerial accounting can also be called as cost accounting which enablesmanagers of company in decision making process that create value of organisation with a1
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effective use of organisation, efficient actions and managing people of company. informationof management accounting is:Intended and designed so that it can be used by internal management of company,instead of being used by shareholders , investors and creditors of company.Related with forward looking instead of historical.Various kinds of management accounting systems and their need in companies: system of management accounting provides a structure to companies for assistingmanagers in accurate preparation of reports so that effective decisions can beformulated(Callahan, Stetz, and Brooks, 2011).1.Product costing: This costing system of management accounting assist internalmanagement in identification of costs that is incurred in producing products, such thatmanagers of company like Sollatek can make an analysis of expenses related tomanufacturing overheads and allocate them in an efficient manner. product costingsystem is very suitable for small scale companies whose operation activities aresimplified in nature and they are able to allocate expenditures of company anddetermine profitability. This system of management accounting also allows managers inidentification of break even point for company.2.Cost accounting system: This system of management accounting is done by managersfor estimating overall cost that are related to manufacturing process of Sollatekcompany. This is beneficial for companies as it assists managers in making estimationregarding future costs that may be incurred in production process and thereby alsoestimates profitability of company. Cost accounting system also assists management inestimating individual cost related to various heads such as Direct labour costs, Directmaterial cost, cost of inventory etc. This system does not provide as-surety aboutaccurate costs but budgeted cost helps in allocating cost to different overheads.3.Job costing: In this costing process internal management of company makes an estimateabout costs that are related to production of specific product or cost involved in specificjob function. companies like sollatek which is indulge in production of unique productsare benefited from this costing process.4.Inventory management system: According to this system of management accounting ,it assists mangers of company in managing and controlling inventory levels of2
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