Management Accounting Essay of Tech Limited
Added on 2020-07-22
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Management accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1a) Various requirements of management accounting and its systems.........................................1b) various reports to be made......................................................................................................2TASK 2............................................................................................................................................4a) Absorption and marginal costing............................................................................................4TASK 3............................................................................................................................................7a) Different kinds of Budget.......................................................................................................7b) Budget preparation process.....................................................................................................8c) Importance of budget for planning and control purpose.........................................................9TASK 4..........................................................................................................................................10a) Balance scorecard approach..................................................................................................10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONManagement accounting is the process in which there are many processes which areundertaken so that all the accounts can be managed in best possible manner (Zimmerman andYahya-Zadeh, 2011). Under this all of the transactions and functions are identified, measured,recorded and then analysed. Under this report all aspects that are related to are to be discussed inrelation to Tech (UK) Limited. Financial and management accounting both will be comparedbelow and also various systems are defined that can further be used for making of severalreports.TASK 1a) Various requirements of management accounting and its systems.Management accounting is the tool which is used for the internal functioning whereasthere is another approach known as financial accounting. There are certain difference which arepresent among them and they are provided below:FINANCIAL ACCOUNTINGMANAGEMENT ACCOUNTINGUnder this all the outcomes of business are tobe disclosed and this will represent the positionof business at a particular time.The main objective of this is to providemanagers with required information so thatthey can formulate appropriate plans with thehelp of it. This is carried for external users and soinformation will be used by them for variouspurposes.Only managers and employees will be allowedto have access to the information whichproduced under this (Management Accounting,2017).In this reports consideration is given to pastperiod and by that reports are to be made for aspecified period of time.Under this forecasts are made and also presentperiod is taken into consideration.Regarding this various legal requirements arementioned which are to be fulfilled andbecause of them reports are made that areprovided to investors.There is no legal rule due to which they arerequired to be prepared on compulsory basis.By the help of this comparison can be made inIn this company decides that in which format1
easy manner as reports are to be made inspecified format.all the documents and reports shall be preparedas there is no specified requirement in thisregard.All the information which is made available with the use of management accounting canbe used by all departments for the process of decision making (Macintosh and Quattrone, 2010).In business there are various operations which are carried out and so in order to perform them inbest manner it is required that proper decisions shall be taken in respect of them and this will bedone by taking all the data available into use. This is because by that they can analyse thesituations which are present and then interpretations are made which draws the conclusions.Several systems are there that are used for this purpose and they are explained below:Cost accounting systems: Under this all the information which is related to various coststhat are associated with business are collected. For this different methods are used andthey include actual, standard and normal. In the actual method all the expenses which aremade actually are used, under normal all the cost that are related to product are used andin this rate is predetermined (Sisaye and Birnberg, 2010). Last is the standard costing inwhich all the cost are taken on basis of standards which are expected to be achieved in it.Inventory management systems: In business there are many operations which areperformed in respect of inventory. In this order quantity, level of stock to be maintainedand issuance of it to all departments are considered. It is very much necessary that all ofthem shall be adequately decided so that there are no issues which are faced in relation toit. Job costing systems: Under the process which is involved in manufacturing there areseveral costs which are incurred and under this system it is considered that how they shallbe allocated to all the products. This is used in such situations under which all unitswhich are made are different from one another. b) various reports to be made.An organisation maintain its financial and accounting records to run its operations withexact figures and counts (Baldvinsdottir, Mitchell and Nørreklit, 2010). These records help anorganisation to make and represent a fair report of performance on annually basis. These reportscalled as managerial reports. These reports help to the management of the organisation to make2
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