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Compare how organizations are adapting management accounting systems

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Added on  2021-02-19

Compare how organizations are adapting management accounting systems

   Added on 2021-02-19

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Compare how organizations are adapting management accounting systems_1
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1: Explanation about management accounting and key essential requirements of various kindof management accounting systems:...........................................................................................3P2: Explanation about different kind of methods applied for management accountingreporting:.....................................................................................................................................5TASK 2............................................................................................................................................7P3: Computation of costs applying appropriate techniques of cost analysis to prepare anincome statement using marginal and absorption costs from:....................................................7TASK 3............................................................................................................................................9P4: Various advantages and disadvantages of different kind of planning tools used forbudgetary control:.......................................................................................................................9TASK 4..........................................................................................................................................13P5: Compare how organizations are adapting management accounting systems to respond tofinancial problems:....................................................................................................................13CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................17
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INTRODUCTIONManagement accounting is significant business term which includes activities orfunctions related to providing financial and monetary information to top level managementwithin a business organisation (Anessi-Pessina and et.al., 2016). This information is used by toplevel management in strategy formulation and in decision making process.This report contains acomplete definition of management accounting, its key functions, requirement of different kindof management accounting system and management accounting reporting methods in the contextof Whale Water Systems. It it is UK's medium size enterprise and engaged in manufacturing ofwater systems. This report also contains computation of cots by applying cost analysistechniques, advantages and disadvantages of planning tools and way by which organizations areadapting management accounting systems to respond to financial problems. TASK 1P1: Explanation about management accounting and key essential requirements of various kind ofmanagement accounting systems:In business and trade context, systematic approaches of collecting, evaluating, analysing,choosing and measuring organisation's internal monetary or financial information into relevantaccounts is referred as management accounting. Management accounting system provide asystematic framework for preparation of various type of budgets and for effective planningprocess within a business organisation. Following are the key elements of subjectivity in thecontext of management accounting:To utilise organisation's resources effectively to attain profitability level and growth.To formulate methods and different strategies that assist in achievement ofpredetermined goals and objectives (Arnaboldi, Lapsley and Steccolini, 2015).In this context, Whale Water Systems is using various management accounting systemsin different circumstances in order to enhance accountability and productivity. Following aresome vital functions of various types of management accounting systems, are as follows:Provide and modify data: In a business organisation various decisions taken bymanagerial personnel based on relevant data and information. Various management accountingsystems like cost accounting, inventory management etc. provides useful data for decisionmaking process. These system also indicates towards need of modification in information to
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enhance the effectiveness of decisions taken. In Whale Water System, management useinformation that is generated from various management accounting system to take decisionregarding manufacturing and production of water system and other related equipments. Serves as a mean of communication: Management accounting systems provide a meansfor communicating financial information across the various departments of a business. Thesesystem act as a systematic means of communicating vital information among variousdepartments of a business organisation. In Whale Water System, Information generated throughinventory management system is communicated by cost accountants to production managers formanufacturing and production processes, which is used by them to ensure availability ofadequate number of water pumps and systems. There are different kind types of systems of management accounting which are appliedby Whale Water System to enhance accountability, effectiveness and efficiency of variousfunctions and activities. Following are some key management accounting systems as discussedunderneath: Financial accounting system: This system of management accounting provide aframework for managerial personnels of Whale Water System to produce financial results andaccounts which exhibits actual performance of company. This system is responsible for effectivemaintenance of data or information related to accounting and financial records within company.Through this system company maintain and records their production and manufacturingactivities to asses actual performance during a particular period which assist in taking businessdecisions. This system also provide groundwork for auditing, accounting information system andpreparation of rules and procedures for internal controls (Bromiley and et.al, 2015).Cost accounting system: A cost accounting system involves a detailed and criticalanalysis of various cost and expenses which provide assistance to managers in taking costrelated decisions. In Whale Water system, this system is used by cost accountants and variousproduction heads to determine the cost of water system, different water pumps and other relatedequipments. It is also used by managers and accountants for identification of any cost makingactivities and functions. Main motive of this system is to optimise cost to maximise profitability.This system also supports activities like product costing and activity based costing which assistin enhancing accountability.
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