Management Accounting: Essential Requirements and Methods

MANAGEMENT ACCOUNTING

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explaining management accounting and give the essential requirement of different types of
management accounting systems to NISA retail store................................................................1
P2 Explaining different methods used for management accounting reporting in NISA retail
store..............................................................................................................................................4
M1 Benefits and implication of the management accounting systems........................................5
D1 Critically examining the integration of management accounting reports and systems.........6
TASK 2............................................................................................................................................6
P3 Calculate cost using cost analysis to prepare income statements of marginal and absorption
costing explaining difference between them...............................................................................6
M2 Applying management accounting techniques and financial reporting documents..............8
D2 Interpretation of accurately applicable financial report for NISA Retail store......................9
TASK 3............................................................................................................................................9
P4 Explaining merits and demerits of types of planning tools used for budgetary control for
NISA............................................................................................................................................9
M3 use of various kinds of planning tools in producing adequate budgets for NISA Retail
store............................................................................................................................................11
D3 Analysing Planning tools leads to the sustainable success..................................................11
TASK 4..........................................................................................................................................11
P5 Comparing the ways in which NISA adapt management accounting systems to respond to
financial problems.....................................................................................................................11
M4 Evaluating the importance of management accounting systems in sustainable success and
overcoming financial obstacles..................................................................................................12
D4 Analysing the importance of planning tools in overcoming the financial problems of NISA
retail store..................................................................................................................................12
CONCLUSIONS...........................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is playing key role in organisation and helping decision
makers to understand in creating and using good management accounting information.
Management accounting help the management with providing them financial and non
financial information with assist them in making and implementing decisions. Good
management accounting system will include the techniques of accounting like that of cost to
volume profit analysis, marginal costing and absorption costing in producing the relevant
management report for informed decision making. The present report is based on NISA retail
store which is a small grocery store both retailer and wholesaler operating in UK. The report
will cover how NISA store is applying and using the management accounting techniques and
financial reporting. It will also cover the types of planning tools used for budgetary control
used and preparing income statements by calculating cost methods.
TASK 1
P1 Explaining management accounting and give the essential requirement of different types
of management accounting systems to NISA retail store.
From: Management accounting Officer
NISA store
To: GM
NISA store
Subject: Requirements within implicating the a variety of management accounting tools with
techniques
Introduction:
Sir,
It is hereby informed you that, NISA store is without fail generating positive earning
as well as creating a exclusive brand representation in the at hand opposition surroundings
where numerous huge retail store entity are making their existence. Therefore, in terms of
developing the working performances of NISA store the there is require to take on different
improvements in the budgetary systems, cost control technique with enhancing work
efficiency of the personnel. so, in keeping with various types of managements accounting
systems which are necessary used for following the NISA store operations such as:
1

Figure 1 Types of Management Accounting
[Source: Types of Management Accounting. 2017]
Activity management: Is a functional department in NISA store that monitor the largely
those activities which are performed by manager or workers in NISA store (Messner, 2016).
For this reason, there would be various types of functioning tasks which necessitate usual
look up such as manufacture and purchase of commodities and services. Though, by way of
the assist of normal execution managers could observe the employees in addition to inspire
them to create labours to give the excellence execute.
Investment management: during direct towards manage the obtained finances as of equity
of owner with the investment of shareholders and the duty, NISA store can employ that
funds in satisfactory method as well as think about the actual outputs they contain due to
those investments. Although, if NISA store is doing investments in innovative operational
activities as well as scheduling to create growth after that they must examine the definite
requirements of such funds.
Cost accounting/management: With observing the requirements of expenses plus capital at
2