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Management Accounting Assignment | Bentley motors

   

Added on  2021-02-20

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ManagementAccounting
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Part 1...........................................................................................................................................1Management accounting and its requirement.............................................................................1Different methods used for management accounting..................................................................2Benefits of management accounting system...............................................................................3Management accounting system and reports are integrate with company processes.................4Part 2...........................................................................................................................................4Analyse three planning tools used in management accounting..................................................4Analysis the use of different planning tools and their application .............................................6Planning tools for accounting respond efficiently.....................................................................6TASK 2............................................................................................................................................6Part 1...........................................................................................................................................6Calculate cost using appropriate technique of cost analysis to prepare income statement byusing absorption and marginal costing method...........................................................................6Part 2...........................................................................................................................................8CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
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INTRODUCTIONManagement accounting is the process of identifying, analysing and operating thebusiness in well manner. Is is required in all organisation as it is used yo prepare internalfinancial reports, maintain records and make business decision in order to achieve goals. Themain aim of business organisation is to maintain proper accounts and reports by usingmanagement accounting (Renz, 2016). To understand concept and requirement of managementaccounting Bentley motors has been selected that isBritish manufacturer and seller of luxurycars. It was founded in 1919, UK. The present report will discuss about system of managementaccounting, accounting reports, benefits of management accounting and planning tools that canbe used in budgetary control. Apart from this report will discusses about financial problems thatcan be solved with the help of accounting system. TASK 1Part 1Management accounting and its requirementManagement accounting means to identify, analysis and collection the information thathelps to run a business. Every business concern wants that their business should be maintain andbe profitable. To complete this task accounting system are important that helps to collectinformation and make business decision in order to achieve goals or objectives. It is importantfor organisation to use different types of management accounting system that helps to understandthe needs and wants of organisation and complete it. In Bentley motors managers understand theneeds of customers and use accounting system to prepare the financial reports (Otley, 2016). Thedifferent types of accounting system are described as: Inventory management system: This system is used to keep track records of inventoryin appropriate manner. The main purpose is to get the information of raw material and maintainrecords of each stock. It is required in Bentley motors company to keep record of stock andmanufacture products in order to attract the customers. This is mainly used in manufacturingcompany that helps to manage the stock. Bentley motors manage the stock by using three methodsuch as:FIFO (First in first out): This means to use material first which is purchased earlier. 1
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LIFO (Last in first out): This means to use acquired stock first for manufacturingactivities.AVCO (Average cost method): This means company used stock for manufacturingprocess on the basis of average cost. Cost accounting system: This system is used to manage the cost of different productsand services within organisation. All company uses this system to define the cost of theirmanufacturing products and services. It helps to define the cost of organisation by considering allincome and expenses. It is required in Bentley motors to estimate the cost of new products andexpenses. Moreover, it helps managers to make budget report in order to get accurate cost. Itguides managers to use this system and maintain all expenses in companies.Price optimisation system: This system is used to set the prices of products andservices. Company manufacture different type of products and uses this system to fix prices ofthat products. It is required in Bentley motors to set the price of manufacturing products byincluding all expenses. It is used by mostly companies to setting right prices for products and tryto meet with customer's expectations. Moreover, Bentley motors understand the demands ofcustomers and set prices of products accordingly (Kaplan and Atkinson, 2015).Job order costing system: This system is used to allocate or assign the manufacturingcost in business activities. It is required in Bentley motors to assess cost of manufacturingprocess that helps to maintain the productivity and profitability by assigning the task accordingto speciality. The manager of Bentley motors uses this system and allocate cost among differentactivities in order to get benefits. This is effective accounting system that can be used to dividethe cost among all activities and present right information in order to get more profits. Different methods used for management accountingManagement accounting reporting: This is the process which is used to generatemanagement reports that help to know the position of company. In Bentley motors, managersprepares different types of management accounting reports for getting records of expenses andposition of company. The manager of Bentley motors conduct this process on yearly basis inorder to keep track record of operational activity. The various method which is used bymanagement to generate management reports are described as: Budget report: This is also known as internal report which is used by management tocompare the actual and budgeted results within entity. It also used to determine that monetary2
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