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Managing Management Accounting

   

Added on  2020-06-04

16 Pages4969 Words376 Views
MNG ACC

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Explain management accounting and requirement of management accounting...................3P2 Explain methods for management accounting reporting.......................................................5TASK 2 ...........................................................................................................................................8P3 Calculate costs using appropriate techniques of cost analysis..............................................8TASK 3............................................................................................................................................9P4 Advantages and Disadvantages of planning tools used for budgetary control......................9TASK 4..........................................................................................................................................11P5 How organisations are adapting accounting systems to respond to problems....................11CONCLUSION.............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTIONManagement accounting includes, participating in the decision making process thatrevolves around the functions of the management. It the process of preparing and managingaccounting and managerial reports in order to carry out formulations of business fluently. Theonly purpose of the management accounting is to contribute in the enhancement of theorganisation. It identifies, measures and then analyze the goals and objectives of the organisationin order to provide structure to the organisation. This report is based on the requirements anddifferent types of management accounting system, methods used for reporting managementaccounting, calculating cost and preparing income statement and lastly advantages anddisadvantages of planning tools used for budgetary control. TASK 1P1 Explain management accounting and requirement of management accounting.Management accounting is the process of managing accounting and managerial reports inorder to function the business effectively and efficiently. It is the process of integrating thefinancial and non-financial statements of the business with the purpose to provide full andequivalent information tot eh management department. It plays very crucial role in generatingand then implementing the information to the management. It is very broad concept and itsspecifications are very formulated, every business big or small requires functions of managementaccounting in order to function it effectively and efficiently. It area of region is very wide, it canformulate in each and every business. Management accounting is not a technique it is practicewhich is conducted by the business to evaluate regulations in its function. All the reports of themanagement accounting contains familiar data, for providing financial information about thebusiness to the orgamisation (Chenhall, 2015). Airdri, was the first manufacturer of hand dryer, situated in Witney. Their total numberof employees working in an firm is 47. As per the reports of 2016, their sales percentage was9.62 and in 2015 it was 8.9. Their main aim is to provide, new technologies and extendedversions of hand dryers and their current motive is to make them five times more long lasting(Ayre, 2017). Every organisation small or medium requires working of management accountingbecause it plays a keen role today in evaluating functions of the business. As the generalmanager of the Airdri, notices the importance of management accounting in the organisation for

implementing structured and detailed information system (Chiarini, 2015). It helps in analyze theratio of funds required, and also helps in regulating the ratio of expenses, with the help pfcollected information systematic financial outcomes can be accomplished in the firm for futurepractices.Airdri, is a small firm managing their financial statements is very essential for them inorder to generate accurate and good ratio of profit. Estimation provides accurate set ofinformation which in turn can be beneficial for the working of the firm. Essential requirementsof different types of management accounting systems are: Price optimisation: It revolves around the mathematical analysis done by the company toidentify the reactions of the customers on different prices of its products and services evaluatethrough various channels. It also combines the prizes with the objectives of the company in orderto maximize the profits of the operating units. It works with operating costs, statements andhistorical sales and prices of the products. Industries like retail, banking manufacturing, bankingand hotel sectors etc can practice price optimisation in their business (Fullerton, 2014). Price optimisation is use to analyse the data and information to study the behaviour of thecore customers upon the variations in the prices of their products. The fist step in priceoptimisation is customer segmentation. For handling complex calculations of the business manybusiness use software for price optimisation. Cost Accounting: It is the process of controlling the outcomes of the cost by recording,classifying, summarized, allocation and numerous alternative aspects. Information and themethods of cost accounting comes along with the financial accounting. It is also used by themanagers and the leaders to take the decisions at initial level. Every type of business whether itsis small, medium or large use functions of cost accounting to evaluate the financial statements ofthe firm. Variable cost is dynamic it keep on changing, there are various cost which remainssame under any kind of circumstances. Cost accounting is important for tracking the various types of activities of the firms likeAirdri. As the cited firm is manufacturer of hand dryer, a single product, so to make each handdryer, the firm needed to purchase $60 for raw materials and other components which arerequired to develop hand dryer, and they have to pay $40 to 6 workers as a wages. Hence totalvariable cost for developing each hand dryer is $300. so manufacturing cost of single hand dryer

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