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Management Accounting Techniques Doc

   

Added on  2020-12-09

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Management Accounting

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1P1. Explaining management accounting and different management accounting techniques.....1P.2. Explaining different method used for management accounting techniques........................2M.1. Evaluating the benefit of management accounting techniques..........................................3P.3. Calculation of income statement using management accounting techniques......................4M.2. Accurately applying a range of management accounting techniques and financial report......................................................................................................................................................6P.4. Explaining the advantage and disadvantage of different types of planning tool.................6M.3. Analysing the use of different planning tool and its application in preparing andforecasting budgets.....................................................................................................................8P.5. Comparing the ways management accounting system in responding to financial problem......................................................................................................................................................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTIONManagement accounting is an integral process in any type of organisation which assist amanagement in analysing, interpreting and presenting all the accounting information which willassist them in making significant decision for company. The present report will assist inunderstanding the different aspects of management accounting and its requirement in B. L.limited. The report will highlight the importance of different management accounting system inB. L. limited . It will also provide a deep insight of significance of managerial accounting reportin efficient decision making process of management. Further, report will also include calculationof income statement using different management accounting techniques. Report will also discussvarious planning tool that are used for budgeting control. Furthermore, report will assist inunderstanding the importance of management accounting techniques in responding to variousfinancial problem in organisation.P1. Explaining management accounting and different management accounting techniques.It can be termed as an essential tool for making efficient decisions and strategies whichused by internal management. The management accounting can be termed as a process ofgathering, analysing, interpreting and presenting the financial and non-financial information in amanner which assist the management in order to take decisions for growth and development ofB. L. limited (Ward, 2012). It is effective for taking day to day decisions regarding variousdepartments and operations of organisation more efficiently. There are many types ofmanagement accounting system that can assist in smooth operations of B. L. Holding Limited.Some of them are:Inventory management system: It is an effective system which assist a company to traceand record the flow of inventory at each and every point in its supply chain. Inventorymanagement can be termed as supervising the flow of inventory in a company by covering eachaspects from manufacturing to retailers and to the final delivery to the ultimate customers(inventory management , 2019). Inventory management system assist in tracking the record ofthe available inventory and the need of inventory. There are various methods used in inventoryvaluation such as FIFO and LIFO.Cost accounting system: its is an essential accounting system for the manufacturingcompany as it assist in tracking and recording al the activities of the manufacturing of the1

product. Cost accounting system assist in analysing the profitability of each product by analysingtheir cost that ion incurred in the production of that cost. It is an effective system which assist themanager in estimating the correct cost of the product and also help in ascertaining theprofitability on manufacturing the product.. Cost accounting system is essential for the companyin order to control the cost of the manufacturing process by determining the cost of the input thatis raw material and output like finished product. Cost accounting system are of two types, jobcosting system and process costing system.Price optimization system: It is a significant accounting system in order to provide a toolto manager in order to control the price of the available resources in the organisation. priceoptimization system assist manager in order to decide efficiently the price of various differentproducts a same time (DRURY, 2013). Price optimization system assist in analysing the changein the demand or expected change in demand of a product with the fluctuation of prices inmarket. It will assist the manager of B. L holding limited in order to determine the appropriatepricing strategy that will help in achieving and maintaining a stable demand of product with thecost that will cover all manufacturing cost of a product.P.2. Explaining different method used for management accounting techniques.This are the most essential report which assist the internal management in knowing thefinancial and non-financial performance of the overall business operation. Managerialaccounting report will assist a manager in order to plan, regulate and decision making andmeasuring performance. Managerial accounting reporting is crucial which represent all thestatistical data that are prepared at any time in financial year as per the requirement of themanagement in order to formulate various strategies and policies. There are different type ofmanagerial accounting report that are essential for the management of B.L. Holding limited.Some of them are:Budget report: It is the fundamental report or very organisation which help in analysingthe actual performance level of the business operation and assist in measuring the performance ofoverall organisation. Budget report are prepared continuously on different time period, the mainpurpose of the report is to analyse the company's actual performance as per the estimatedbudgeted performance (Parker, 2012). The budget report are prepared on the basis of the prioryear performance by ascertaining the expenses and income and on basis of that the report for2

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