Management Accounting Tools of Nisa Ltd | Report
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Added on 2020-02-17
Management Accounting Tools of Nisa Ltd | Report
Added on 2020-02-17
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Table of ContentsINTRODUCTION..........................................................................................................................................................3TASK 1...........................................................................................................................................................................3P1) Management accounting and its different systems' essential requirements........................................................3P2) Different management accounting methods........................................................................................................5TASK 2...........................................................................................................................................................................6P3) Various costing methods and differences between marginal and absorption costing.........................................6TASK 3...........................................................................................................................................................................6P4) Critical evaluation on budgetary control systems................................................................................................6P5) Management accounting systems........................................................................................................................6CONCLUSION...............................................................................................................................................................6REFERENCE..................................................................................................................................................................72
INTRODUCTIONManagement accounting is multidisciplinary approach that is useful for expansion of organization andincreasing its efficiency. Therefore, management of entire business operations that affects balance of production anddistribution system of entity. The present report is based on understanding different management accounting tools ofNisa Ltd. It is retail sector small scale organization of UK that provides clothing, food and drink services ofcustomers. Various management accounting tools and systems can be described for forecasting and decision makingrelated to further implementation of firm. In this regard, several costing methods and their described can beexpressed for proper price determination. However, critical evaluation on budgeting is to be considered through thisassignment. Along with this, various aspects for expansion of small size business and enhancing its quality servicesare to be defined by studying this report. Hence, learners are able to understand applying different tools andtechniques of management accounting for overall business activities' effectiveness.TASK 1P1) Management accounting and its different systems' essential requirementsManagement accounting is one of the crucial system for expansion of small business unit and increasingefficiency for qualitative services. In accordance to this, overall business activities get impacted as well remains ableto creating positive environment of firm at large scale. However, several tools and techniques are applied forenhancing efficiency of firm at firm. It is useful for optimum utilization of resources and fund that impacts onproductivity and profitability of retail sector company (Anwar and et.al., 2016). Including this, managementaccountant of firm recognizes business and employees' performance to build up relationship among employees aswell helpful for spreading wide scope of organization to gain their best contribution for working in team. Therefore,business, marketing and competitive strategies of organization can be enhanced at high level. In this regard,adequate utilization of resources can be gained. Moreover, management accountant of company identifies allfinancial statements including income statement, balance sheet, profit and loss account, cash flow and fund flow. Onthe basis of these tools different ideas are created for implementing action plans that impacts on company'seffectiveness. It affects customer satisfaction and increasing in positive feelings of consumers towards organization'seffectiveness. Along with this, effective market value for entity and products produced by company can be effective(Armitage and Webb, 2013). Thus, high level of production and profit earning capacity of firm can be achievedefficiently. In this process, management accounting is useful for applying different tools and techniques related toenlargement of entity and increasing its market efficiency to sustain its good reputation for long time period. Hence,management accounting is composition of different substances such as costing, budgeting, income statements andbusiness organization's operations that affects market position of firm at large scale. It is interlinked with creatingpositive and developing atmosphere of entity for various kinds of business operations (Berman, 2015). Inaccordance to this, varieties of tools and techniques can be applied for enlargement of small scale enterprise alsoable to enhance quality services of firm that impacts on organization's effectiveness. Therefore, management3
accounting is useful for effectiveness of business entity and enhancing its efficiency for long term sustainability offirm at high level.Essential requirements of management accounting systems:- There are different management accountingsystems applied for expansion of small scale enterprise and increasing its high position in market to face competitionat large scale (Bucci, 2014). However, it increases business and competitive strategies of firm for long timeperiodicity. Several management accounting systems and their essentials can be described as below:-Standard costing:- Under this process, management accounting of Nisa Ltd analyses overall businessoperations and its performance that generates different ideas for further implementation of small scaleenterprise. In this process, forecasting and decision making is presented to price determination (Burke,Corman and Story, 2016). Moreover, balance between income and expenditure for business operations canbe obtained. In addition to this, estimation for incurring costs is determined that affects on production anddistribution system of firm. However, proper estimation and forecasting is applied for expansion of smallbusiness unit. It is considered as a technique for following on prepared action plan to increase efficiency ofentity and presenting financial position of firm for proper income statements.Cost accounting system: In this system, costing and price determination strategy is presented as per which financialproblem of small size enterprise can be overcome efficiently Job Costing system: In this costing system assigning manufacturing costs to an individual products, mainly jobsystem is used only when the product manufactured are different from the other ones. Inventory management system: In this system, several tools and techniques are applied for proper balance ofproduction and distribution of goods. inventory management is interlinked with several organizational functions related to expansion of small size entity.Control accounting:- It is one of the essential tool of management accounting for controlling over excess ofproduction and wastage of raw materials. Therefore, control accounting is useful for creating balance ofproduction and distribution of goods. Similarly, it is beneficial for increasing in income as well able toadequate expenditure. However, cost control is liable for handling overall business activities and furtherexpenses and incurring price on business operations (Kreibich and et.al., 2014). Therefore, controlaccounting is helpful for effective balance of expenditures and revenue to enhance profit earning capacityof small scale enterprise for proper management. Control accounting is measure their control over thefinancial statements and do not ensure compliance with laws and regulations but rather are designed to helpa company . It can aid to provide validity an accuracy of its own financial statement. Financial accounting:- Through this approach, management accountant of Nisa Ltd analyses financialaccounting tools such as profit and loss account, balance sheet, income statement and performance oforganization. Therefore, on the basis of these components several ideas are created for effective monetaryperformance as well increasing in profitability can be achieved at high level (Lavia López and Hiebl,4
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