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Management Accounting Tools and Techniques

   

Added on  2020-10-04

18 Pages5187 Words40 Views
Management Accounting

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1P1 Determining the management accounting and its various components for Freestyle IT. .2P2 Identification of various methods used for management accounting reporting for FreestyleIT............................................................................................................................................3P3 Estimating the fruitful method of costing such marginal and absorption costing forFreestyle ................................................................................................................................5P4 Presenting the pros and cons of various budgetary control systems as well as planningtools........................................................................................................................................9P5 Application of management accounting system by various entities in terms of overcomingthe problems in finance........................................................................................................12CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTIONTo enhance the efficiency and the operational quality of the business there is needto have the proper management systems in the business. Management accounting plays the mainrole in analysing the internal strength of the entity as well as facilitates the managers ofprofessionals to present the fruitful decisions. In the present report there will be identification ofvarious tools and techniques which are used in management accounting system as to enhance theperformance of Freestyle IT. The firm is located in Hook with the strength of 18 employees. Inorder to provoke the work environment in the organisation the report will help them in analysingthe various budgetary, planning and forecasting tools on which they could become able tomotivate quality work in the premises. In this, report will provide deeper insight about the toolsand techniques that Freestyle IT can undertake for managing internal operations. Besides this, itwill also shed light on the manner in which different costing methods help in making suitabledecision. Report will also describe different planning tools that can be used by the concerned ITfirm for making optimum use of financial resources. Further, it also depicts the tools that help inresponding financial problems or issues that prevail within the business organization. To: General Manager (Freestyle IT)From: Management accounting OfficerSubject: Implication of the management accounting system as to enhance the efficiency ofbusiness.Introduction:Sir, It will be beneficial for the internal analysis of the business which in turn helps inmaking the profitable decision making. Therefore, there will be increase in the operationalactivity of the business as well as beneficial decision would be made by managerialprofessionals. In terms of developing the operational efficiency of this IT reseller organisationthere is need to have the sound accounting systems in the organisation. Thus, here is a reportwhich contains various tools and techniques which are the main sources of managementaccounting system and are beneficial in operational development of business.1

P1 Determining the management accounting and its various components for Freestyle ITManagements accounting is a helpful tool that helps in making the adequate efforts in theoperational activities such as analysing the costs, expenses and revenues of the business. This themost appropriate tools that helps managers or professionals in making the adequate decisionmaking (Bryer, 2013). Therefore, there will be various components which are indulged inmanagement accounting systems and helps in making the appropriate planing and decisionmaking for operational development. Therefore, in the following chart there has been varioustools of management accounting such as:Illustration 1: Management Accounting System for Freestyle IT(source: Hickman, 2016)Cost Accounting: This technique is helpful in terms of analysing the requirements forfunds in order to complete operations of business. Freestyle IT professionals in to implicate suchtechnique in the organisational operations as to analyse the cost requirement in the firm. Itconsists of analysing the uses of funds in the operational activities such as purchase, sales,producing the outputs (Chan, 2015). These all transactions which are meant to be recorded by themanagers and then they summarize the data and analyse adequate costs for each operations.Job Costing: This accounting method helps in determining the costs over the jobs andduties performed by managers, employees and the organisation itself (Ozdil and Hoque, 2017).2

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