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(PDF) Management Accounting Techniques

   

Added on  2021-02-20

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Management accounting

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1LO 1.................................................................................................................................................1P 1. Management accounting and its system. ............................................................................1P 2. MA reporting.......................................................................................................................3M 1. Benefits of MA systems.....................................................................................................4D 1. Critical evaluation of MA systems and MA Report............................................................5P 3. Calculate costs using appropriate techniques......................................................................5P 4. Benefits and limitations of budgetary tools.......................................................................13M 3. Forecasting budgetary tools..............................................................................................14P 5. Comparing organizations to respond to financial problems through managementaccounting systems...................................................................................................................15M 4. Assessment of how resolving financial problems, lead organizations to sustainablesuccess.......................................................................................................................................15D 3. Critically evaluating planning tools to solve financial problems......................................16CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17

INTRODUCTIONManagement accounting is an impelling process which helps in renderingand preparingtimely statistical and financial data to the internal management of the organization in order totake effective strategic decision. This study includes, management accounting techniques and also include various keyfunctions and elements of MA system. It will also critically evaluate the different methods usedin the management accounting reports. This study will further analyse the cost of the companyusing various appropriate techniques in order to get effective results and outcomes. Furthermore,this study will help in examining the benefits and limitations of different planning tools whichare used in budget control. This study will further, compare different organization who areadapting to different management accounting system to solve varied financial problemseffectively. Arcadia group is a multinational retail company which was founded in the year 2002.This company mainly deals in clothes, accessories and shoes. MAIN BODYLO 1P 1. Management accounting and its system. Management accounting (MA) is an impelling process which helps in renderingandpreparing timely statistical and financial data to the internal management of the organization inorder to take effective strategic decision (Kaplan and Atkinson, 2015). It is an effective processof formulating and preparing various management accounting reports which helps managementof the Arcadia group in taking in strategic decision on a timely manner without any delay.Management accounting helps in planning, solving various financial problems, strategic decisionmaking and strategic management. The main function of management accounting is to determine and evaluate theprofitability and operations of the organization. It also helps in forecasting the future which leadsto strategic decision making. Management accounting aids in financial accounting, varianceanalysis and capital budgeting reasoning. It also helps in break even analysis, new productanalysis and stock valuation. Management accounting also facilitates in controlling cost of the1

business and serves as an effective mean for communication for strategic management anddecision making. MA systemMA system helps in effective planning and taking strategic decision in order to reachbetter results and outcomes for Arcadia group (Clarke and et.al., 2019). It is an effective processthat helps internal management of the company to effectively evaluate the operations of thebusiness with utmost accuracy and efficiency. This helps in forecasting the future and takestrategic decision in order to achieve goals and objective of the organization. System of Management accounting helps in reducing cost and controlling the operationsof the business. It is also beneficial in measuring the actual performance by comparing it with themanagement accounting and budgeted reports. It helps in effective decision making by lesseningthe ambiguity. Cost accounting system: This is also known as product costing system which helps ineffectively computating the cost of the various products of the company in order to analyse theprofit, cost control and inventory evaluation (Shields, 2018). This system helps in recording andpresenting various financial data. Inventory management system: It is an effective management accounting system whicheffectively evaluates the level of resources required for the production and operation of thebusiness. Inventory management system helps in tracking the orders, various inventory levels,sales and deliveries (Kaplan and Atkinson, 2015). The various examples associated withinventory management system is LIFO, FIFO and weighted average. Job costing system: This is a strategic process that accumulates and assign cost to thevarious per unit of the production. This system helps in keeping proper track of the variousexpenses and accumulating cost to each unit by categorizing them into direct material, directlabour and overhead cost. Price optimization system: This is an effective MA system that determines and evaluatethe behaviour of the customers in relation to the change in the prices of the various products andservices of the company. This method focuses on finding the perfect balance between the valueand price of the product to generate higher profits. 2

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