Management Accounting: Types of Systems, Reporting Methods, Costing Techniques, and Budgetary Control Tools

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P 1: Management accounting and types of management accounting systems.......................1
P 2: various methods used for management accounting reporting.........................................2
P 3: calculating costs to make income statements using absorption and marginal costing....3
P4: merits and demerits of various kinds of planning tools used for budgetary control........7
P5: adaption of management accounting systems to respond financial problems...............10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting provides financial information to the leaders or the
managers of the company which is used by them in taking various decisions so that goals can
be achieved. It helps internal users of the company in order to make effective decisions.
Synergy manufacturing co. LTD is the medium sized company and manufacture products for
sale. This report will discuss concept of management accounting and its types and also
management accounting reporting. Further will calculate costs and planning tool used for
budgetary control. It will also discuss about how management accounting systems is helpful
in solving financial problems.
MAIN BODY
P 1: Management accounting and types of management accounting systems.
Management accounting-
the procedure of making goals for the organisation by finding, measuring, evaluating and
communicating information to the leaders or managers is known as managerial accounting. This
accounting concentrate on all other accounting so that can provide knowledge to the
management regarding business metrics. In order to record transactions it uses data which is
related to costs of items and services bought by the organisation (Honggowati and et.al., 2017).
Performance reports are used by management accountants to see variance within actual results
from the budgets.
Types of management accounting systems-
Cost accounting:
It is the kind of managerial accounting which review the total cost of production of the company
through assessing variable costs and fixed costs as well like lease expense etc. this accounting is
mostly used by the management of the company so that to make business decisions. It is not like
financial accounting because it provide information to the company's external users in the form
of financial statements whereas cost accounting is flexible and fulfils business needs. While
making cost accounting reports it takes into consideration of input costs related with production.
Cost accounting involves marginal costing, standard costing, lean accounting etc.
job costing system:

it is the costing method which is used to find out the cost of particular jobs which are done as per
the customer's specifications. It is the normal costing method which is used where there are
separate projects or contract jobs. Cost of particular job can be find out separately with the help
of this costing method and which is further helpful in calculating profit and loss of every job. It
is also helpful in future planning because it determine same jobs which has to be done in the
future. It further helps in managing jobs (Alvarez and et.al., 2021). This method is generally
used in industries like auto mobile garage, foundry, printing, shipbuilding etc. this method gives
detail of the cost analysis of labour, materials and overheads of every jobs. It is also helpful in
making estimation of certain costs.
Price optimization system-
this system uses mathematical data of the company in order to find out the responses of the
customers over the prices of various products and services via separate channels. Complexity of
pricing are given within dynamic market conditions. Mainly this system helps in forecasting
demand, enhance customer satisfaction, make promotional strategies etc. It is also utilised in
calculating the prices which will be helpful to the company in meeting the objectives like profit
maximization etc. information which is used in this system are historic prices, survey data,
inventories, operating costs etc. this system is used in industries like airlines, car rental, retail,
insurance etc.
P 2: various methods used for management accounting reporting
There are many methods of management accounting reporting which are as follows:
job costing (JC) report-
it is the report which is made so that costs of the construction project can be tracked. There are
JC reports which add the costs when the job is been done and it is helpful in knowing the issues
so that problems can be eliminated on future jobs. In order to identify problems as soon as
possible report must be tracked on weekly basis so that problems can get corrected before it
reaches out of control (Soderstrom, Soderstrom and Stewart, 2017). JC report gives idea
regarding the utilization of workers, raw materials etc so that to come up with the conclusion
that the costs which is associated with particular projects is different from one another and why
it is so.
Inventory report-