Management Accounting and Different Types of Budgets

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Management accounting..................................................................................................3
P2. Different types of management accounting.....................................................................5
Task 2...............................................................................................................................................6
P3. Calculation of cost............................................................................................................6
TASK 3............................................................................................................................................9
P4. Different types of budgets................................................................................................9
B. Process of preparing the budget.......................................................................................11
C. Pricing strategies..............................................................................................................11
TASK 4..........................................................................................................................................12
P5. Balance score card approach..........................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is a term through which it helps the organisation in dealing with
a different kind of the cost that occurs in the organisation. It helps the management to make a
proper kind of decision related to the accounting. It provides the different financial data to the
organisation which they require making process and which would help them in doing the day to
day operations (Amidu, Effahand Abor, 2011). It also helps the employees to make their day to
day performance and that would help them in making the proper plan to reduce the risk in a firm.
Imda Tech is firm which deals with a product which are been related to the mobile
chargers and the other electronic gadgets. This organisation is facing the lack of the financial
resources issues which would help them in effectively carrying out the operations of a firm. This
report would help to know about the proper management of the financial aspects of the firm.
TASK 1
P1. Management accounting
Management accounting is a system is the thing which is methodology used by the firm
which helps them in preparing the budget for the firm for the day to day operations. Management
accounting can be said as the cost accounting system because the firm deals in a cost of firm in a
management accounting. The financial resources are being used for the most effective manner in
an organisation all that had been with the help of a management accounting system (Askarany
and Yazdifar, 2010). It helps the management of the firm in getting the proper amount of the
information’s which are been related to the financial resources. And by the help of the
management accounting the performance and the risk factors of a firm can also be identified.
Functions of management accounting
 Planning- Management accounting helps the management team to make a proper amount
of the planning in an organisation which would help them in doing the work in a proper
way.
 Organising- It helps the organisation to make proper plan and the work according to that
has to be allotted to the people in the organisation which would help them in doing their
work in a proper manner.

 Controlling- The task which is been planned and then allotted to the particular person or
a group has to be controlled in a proper way which would help them in doing their work
in correct manner (Baldvinsdottir, Mitchell and Nørreklit, 2010).
 Decision making- Decision making is the most important function of an accounting in a
firm which helps them in making a proper decisions.
Difference between management accounting and the financial accounting
Basis Management accounting Financial accounting
Definition Management accounting is a
technique which is been used
by the firm so that they could
make proper plans and the
policies regarding the day to
day activities a correct manner.
Financial management helps in
making a correct financial
budget of a firm.
Users of the information The person who uses the
management accounting are
called an internal user of an
organisation.
The users of an financial
accounting is an from
internally or externally.
Regulations The reports which are been
made by an organisation is
mainly to satisfy the
requirements of a managers of
a firm.
In a financial accounting the
standards of an accounting has
been forced.
Published In Management accounting, it
is not necessary to be
published.
The financial accounting has to
be published.
Time The management accounting
used to be made when the
management of an firm needs
to have the evaluation of an
Financial accounting is been
made in the year end.