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Management Accounting Assignment Solved - Jupiter Plc

   

Added on  2020-10-23

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Leadership Management
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MANAGEMENTACCOUNTING
Management Accounting Assignment Solved - Jupiter Plc_1

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Meaning of management accounting......................................................................................1Different methods of management accounting reporting.......................................................3Benefits of management accounting systems.........................................................................4Integration of management accounting systems and management accounting reporting inorganizational processes.........................................................................................................4TASK 2............................................................................................................................................5Costing techniques and preparation of income statements.....................................................5TASK 3............................................................................................................................................7Merits and demerits of different types of planning tools used in budgetary control..............7Use of planning tools in preparing and forecasting budgets..................................................9Way in which planning tools help in solving financial problems..........................................9TASK 4............................................................................................................................................9Comparison of organizations adapting management accounting systems to resolve financialissues.......................................................................................................................................9Contribution of management accounting systems in achieving sustainable success...........10Evaluation of how planning tools of budgetary control helps in solving financial problems10CONLUSION ...............................................................................................................................11REFERENCES..............................................................................................................................12
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INTRODUCTIONManagement accounting is defined as process of collecting information, its interpretationand then providing to management for decision making. In present time, every organisationlooking for valuable and reliable amounts so they can apply management accounting system forrecording necessary financial transactions. Management accounting is the proposition ofaccounting information in order to develop the policies to be adoptive by the management andhelp for day to day activities. In the context of this report, company chosen is Jupiter PLC. It is amedium sized manufacturing company that is engaged in food packaging and delivering. In thisreport aims to about various types of management accounting system as well as reporting methoduseful for a company. Different types of costing methods those are taken into account for thecalculation of net profit (Busco and Scapens, 2011). Use of merit and demerit of planning toolsused in budgetary control process. Comparison with other organisation is done to examine, anddescribing how management accounting system implemented for resolving financial problems.TASK 1Meaning of management accountingManagement accounting may be defined as a science and art to provide information tothe management so that they can perform their functions simultaneously and efficiently formodify their operating efficiency. In the other words, it is the term used to describe theaccounting techniques, systems and methods which complied with special ability and knowledgeto assist management in its task of minimizing losses maximizing profits. Reports prepared undermanagement accounting systems are analysed and then decision making is done on this basis.Management accounting aims at providing information to managers so that they can give thisinformation to senior management to run Jupiter PLC. Many aspects of accounting are coveredunder this such as capital budgeting, net margin, gross margin, future trends, valuationtechniques etc. Information derived from management accounting is communicated to internalstakeholders which are investors, board, and employees. Management accounting can be said aslifeline for organizations (Sykianakis and Bellas, 2005). Because organizational structure iscomplex and it is difficult to handle various departments. Different types of managementaccounting systems mentioned below:1
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Inventory management system: It tracks complete supply chain of business operationsor a part of it. Also it covers every aspect from manufacturing, warehousing to supplying ofgoods to retailers and wholesalers for sale. This system can be said as a combination of differenttechnologies(software, hardware) and processes which helps in monitoring inventory. Inventoryincludes raw materials, finished goods, work in progress (Hussain and Gunasekaran, 2002). Thissystem allows to take better decisions regarding investments and maintenance of inventory inJupiter PLC. There are different types of inventory management systems prevailing in companieslike manufacturing inventory system, warehouse inventory management, retail inventorymanagement. Software used for this system includes many items like bar coding, reporting tools,inventory alerts and forecasting. Job costing system: Job costing system refers to the procedure of collecting informationrelated to costs associated with a job or project. Information or data collected through this systemare also used in determining quality of computation system of Jupiter PLC. As these informationare later assists in quoting prices of products taking into consideration profit part. Form ofinformation provided by this system are direct material, direct labour and overhead. Overheadcosts are depreciation, rent, electricity etc. In practical manner, job costing system should fulfilrequirements of customer. With this, one can identify profitability of each job or project inJupiter PLC.Cost accounting system: This system is also known as product costing. Cost accountingsystem is a kind of framework used for cost estimation, analysing degree of profitability, stockvaluation and cost controlling. For the purpose of valuable operations, there should be anaccurate estimation of product cost. When it is done, one can easily identify between moreprofitable goods and less profitable goods (Grabski, Leech and Sangster, 2009). Thereafter,ascertainment of closing stock, work-in-progress, and finished stock will be done to preparefinancial reports as well as financial statements. Balance sheet and trading account necessarilyneeded value of inventory to depict correct financial position of Jupiter PLC. Price optimization system: Price optimization system refers to a process of identifyingthat level of price which is optimum. In other words, it defines setting reasonable level of valuethat a customer is able and willing to pay for goods as well as for services. Factors that affectprice optimization are market demand, degree of competition, manufacturing costs etc. JupiterPLC should not set prices of goods at too much higher level and neither at too much low level.2
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