Management Accounting Techniques for Coca Cola

Management
Accounting

Contents
TASK 2..........................................................................................................................................................3
P3: Calculation of costs using appropriate techniques............................................................................3
M2: Accurate application of range of management accounting techniques...........................................7
D2: Producing of financial reports...........................................................................................................8
TASK 3..........................................................................................................................................................8
P4: Advantages and disadvantages of planning tools used for budgetary control..................................8
M3: Analysis of use of planning tools....................................................................................................10
TASK 4........................................................................................................................................................10
P5: Comparison of organizations on the basis of adoption of management accounting systems.........10
M4: Analysis of attaining success through dealing with financial problems..........................................11
D3: Evaluation of planning tools responding to financial problems for attaining success.....................12
CONCLUSION.............................................................................................................................................12
REFERENCES..............................................................................................................................................13

INTRODUCTION
Management accounting refers to a technique of using provisions related with accounting
for the advantage of the company and to aid management in decision-making process (Dou,
Khan and Zou, 2016). This assignment is based upon The Coca Cola Company, which is an
American manufacturer of soft drinks. In this report, detailed focus will be made on the
demonstration of understanding of management accounting systems, application of different
techniques for management accounting. Additionally, the use of planning tools and comparison
of various types of ways in which organizations can use data of management accounting will be
discussed as a part of this report.
TASK 2
P3: Calculation of costs using appropriate techniques
The expenses which are incurred by a firm in producing a product or providing a service
are referred as cost.
Microeconomic techniques-
The types of costs which incur in a company like Coca Cola are as follows-
Fixed and variable costs- Fixed costs don’t change with a change in the level of
production, variable costs change with a change in the level of production (Ferentinou and
Anagnostopoulou, 2016). In Coca Cola, both types of costs are incurred.
Direct and indirect costs- Direct costs can be directly attributed to the output while
indirect costs cannot be attributed to them. Coca Cola incurs both of them.
Product and period costs- Product costs are associated with the product. Period costs
are associated with a particular period of accounting. In Coca Cola, both are incurred.
Cost analysis- Cost analysis refers to a detailed analysis of the costs which are being
incurred in the business. It can be performed by Coca Cola which will enable it to identify its
costs and try to reduce them.
Cost-volume-profit analysis- Cost-volume-profit analysis is commonly associated with
analysis of break-even point in a company. It is a point where it does not earns profit nor does it
incurs a loss. Coca Cola can use it to find out break-even point.
Flexible budgeting- A flexible budget is the one which is flexible and changes with a
change in the level of activity of the firm. Coca Cola can prepare which will be advantageous for
it.

Cost variances- Cost variances incur when there is a difference between the actual cost
and the planned cost. They also happen in Coca Cola which needs to find a solution to reduce
them.
Absorption costing- It is a method to calculate costs which takes into account indirect
expenses as well as direct costs. Coca Cola Company can use this technique (Greiner, Kohlbeck
and Smith, 2017).
Marginal costing- It is a method wherein variable costs are charged to units of
production and fixed cost is completely written off against it (Gullberg, 2016).