Management Accounting Techniques : Doc

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Management accounting and several types of essential systems...........................................1
TASK 2............................................................................................................................................4
Calculate cost using appropriate techniques...........................................................................4
TASK 3...........................................................................................................................................8
Using budgets for planning and control.................................................................................8
TASK 4..........................................................................................................................................10
Identify financial problems and apply appropriate techniques.............................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting is a set of skills that perform the various accounting information
in such a way that it can assist the management for a better understanding of accounts to prepare
and formulate the policies and decisions for the organisation (DRURY, 2013). It is mainly
followed by the internal team of an enterprises and this is only thing which makes it different
from financial accounting. To better understand the topic of relevant topic taken Cambridge
manufacturing Ltd, it provides weight loss supplements and produced a range of specialist
dietary products and offers nutritional assurance with conventional foo for more gradual weight
loss and weight management. The entire report presents the understanding about management
accounting system as well as reports of particular accounting period of time. Report also focus
on cost techniques which can use to calculate of net profit. Additionally, several planning tools
and accounting tools are applied by business to face off different types of financial problems.
TASK 1
Management accounting and several types of essential systems
Management accounting is the process to prepare different types reports regarding to
internal activities then present in front of top management. In present time every organisation
want to maintain and control their internal system in effective manner so they can apply
management accounting system.
Management accounting system and their types
Management accounting system is procedure to collect, analyse, measure and
determinant meaningful financial information then record in right accounts. These systems can
apply according to situation and help to increase productivity as well as profitability of
Cambridge manufacturing Ltd. There are defined essential system of management accounting
that are discussed underneath:
Price optimisation system- This system mainly based on customer perception and pricing
structure of the company. Every manufacturing company wants to increase their sale so they will
conduct research regarding to their product. It is a mathematical analysis that consist of financial
information of their products and set price of different items as per the analysis and customer
perception. In Cambridge manufacturing Ltd, apply price optimisation system to set best prices
of different supplements and attract much more customers (Herbert and Seal, 2012).
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Cost Accounting System – It is a set of framework which can use by companies to
evaluate the cost of their products in the context to analysis of stock, profitability as well as cost
control. It can examine past, present and future data to provide the basis for managerial decision
making. A cost accounting system has been recorded all data in simple way and the purpose to
fix sale price to acquire small part of mission. In Cambridge manufacturing Ltd help to
investigate process of producing at different level and detail information like raw material, work
in progress and finished goods.
Job costing system – A job costing system is the process of collecting information which
is connected to cost of production as well as service job. These type information need to submit
in the contract where costs are reimbursed. Most of the companies used particular system to
provide facility of customization of products & services to their customers. In the context to
Cambridge manufacturing Ltd, the system is useful to determine information and examine
accuracy to able to quote price that can allow for a reasonable profit (Kaplan and Atkinson,
2015).
Inventory management system – This system is track the record of inventory and
analysis each level manufacturing. The particular system mainly consider for manufacturing
company where consist of raw material, finished goods in warehouse, stock dispatched to
delivery to merchant or customers. In Cambridge manufacturing Ltd manufacturing company
apply the system to use material in appropriate way and try to reduce wastages. The system
based of three methods which are
 LIFO – According to this method inventory come in last that will sale out first.
 FIFO – In this method first in first out of stock and company apply this method to
generate profit.
 AVOC – There are material used on Average cost.
Difference between management accounting and financial accounting
Basis Management accounting Financial accounting
Meaning It is the process of internal system
and provide data to managers to take
decision and prepare plan and
strategies.
It is an accounting system which
can focus on develop of financial
statement in order to provide
financial information to outsider of
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