Assignment on Management Accounting - Tech UK limited

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Essential requirement of management accounting and its system.........................................1
P2 Financial information.............................................................................................................3
TASK 2............................................................................................................................................5
P3 Income statement using absorption and marginal costing.....................................................5
TASK 3............................................................................................................................................8
P4 Various kind of budget and there merit and demerits............................................................8
TASK 4..........................................................................................................................................10
P5 Management accounting that respond with financial problem too......................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Management accounting is that which does required in every field and this concept is
such which do help in defining the financial information that make management of firm to
produce an effective decision and strategy for company, and it also maintain the day to day
transaction in better way. Even though entity also uses advanced technology so that they can
develop there solution in proper way and thus it can also lead to have an improvement in
business too (Garrison and et. al., 2010). Moreover, dividing the finance can make company to
reduce the wastage of resources in great way. The report is based on Tech UK limited which is a
seller of mobile phones, special charger and gadgets too etc. Assignment will include the
difference in between the management and financial accounting and its importance with different
management system. Although various accounting report and its importance too, absorption and
marginal costing etc. apart from all budget with its advantage and disadvantage and importance
as well.
TASK 1
P1 Essential requirement of management accounting and its system.
a.) Difference in between the management accounting and financial accounting:
Basis Management Accounting Financial Accounting
Meaning Management accounting is that
which do help in making an
effective decision and strategies for
the company.
Financial accounting is such which
also classify, analyse and record
different thing and it also summarize
financial affairs of the entity in great
way.
Application Management Accounting is that
which also make management to
have an meaningful steps and the
strategies too.
Financial accounting is that which
show forth accuracy with fair also
having an picture of financial affairs
too.
Dependence Management accounting is such
which do take help from the
financial accounting to make some
Financial accounting does net get
depended on management accounting.

of the right decisions in great way.
Rules Management accounting is that
which doesn't follow the rules in
proper way.
Financial accounting is such which do
should be prepared as per the GAAP
and IFRS.
b.) Moreover, there is an importance of management accounting for making an decision for
the department managers and some of point of importance for the company are as:
 Basically, it is such which do help in identifying the key performance metrics for the
important department too.
 Moreover, Collecting data and comparing it and make report in between the indicators of
current performance with expectations of business.
 Management accounting is such that also analyse the variation and also look forward to
provide the better solution and corrective measures in effective way.
 Even though with the help of management accounting the advanced tools and techniques
such as key performance indicators, balance scorecard and having an scenario planning
with the management information system too.
c.) The various cost accounting system is such which do include the different costs and some of
those are as:
 Actual cost: Actual cost is that which leads to actual expenditure made in acquiring
asset, which do include the supplier invoice expense addition cost of delivery and test to
asset. Therefore, this is that cost of asset which is recorded in financial statement as fixed
asset in great way (Fullerton, Kennedy and Widener, 2014).
 Normal cost: Normal cost is that which is used to provide some value to manufactured
product with the actual cost, as actual direct labour cost and also manufacture the
overhead based predetermined manufacturing overhead rate as well. Moreover, these cost
is referred to product cost and used for cost of goods sold.
 Standard costing: It is such which has an substituting the cost for the actual one in
accounting record and periodically having variance that show the difference in between
the expected and actual cost as well. This is something which has an simplified
alternative system as FIFO and LIFO method, in which large number of cost information
is there which maintain the items.