Management Accounting: Types of Systems, Reporting and Costing

Accounting

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 Define the various requirements and types of management accounting systems.............3
P2 Elaborate the different types of management accounting reporting.................................4
P3 Calculate the costs by preparing income statement using marginal and absorption costing. 5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management accounting is a process which is used to make the decisions which are
related to management. It gives a brief analysis of the business activities (Lee and Carline, 2019).
The report has explained the techniques and various type of management accounting systems, its
uses. Further, various type of cost are calculated using the marginal and absorption costing
methodologies.
MAIN BODY
P1 Define the various requirements and types of management accounting systems.
Management accounting is used for creating reports which helps the managers in taking
short – term and long – term decisions. It will help in achieving the objectives of the
organisation.
Management Accounting Systems: It applies all concepts and works across all departments of
a company. An effective and impressive system will examine each of the areas of sales,
information technology, finance, human resources, operations and marketing. In addition to
financial data, it also provides non-financial information.
Types:
1. Job Costing System: It means to allocate the manufacturing cost of the single product or
bath of the commodity and these cost are implemented on the products if they are
different from one another (Makhaiel and Sherer, 2018). The type of data that is required
for the accumulation of information is direct labour, material and overhead. The essential
requirements are:
 The cost sheets are collected of the similar jobs.
 Evaluates the work quality.
 Helps in estimating the costs which are used in production process.
2. Price Optimisation System: It is used to decide the price of numerous commodities at a
specific time and also controls the costs of resources. It will help in optimising the needs
of consumer and the value of those goods. The requirements are:
 the attitude of customers are defined on the basis of different costs.