Management Accounting and Systems

Management accounting

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Management accounting and management accounting systems......................................3
P2 Explaining various methods of MA reporting...................................................................5
M1 Benefits of MA systems and their application for Innocent drinks.................................6
TASK 2............................................................................................................................................6
P3. Calculation of costs using best method of cost analysis to make an income statement...6
M2 Range of management accounting techniques...............................................................10
TASK 3..........................................................................................................................................11
P4. Explanation of various planning tools used in budgetary control with proper benefits and
drawbacks.............................................................................................................................11
M3 Analyse of planning tools and their application............................................................12
TASK 4..........................................................................................................................................13
P5. Comparison of organisations for adapting MAS to defect to financial problems..........13
M4.........................................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting defined as the financial reporting whereby all monetary and non-
monetary data are integrated to include effective and efficient decision-making tools. This is an
important instrument for planning, decision-making as well as creating an efficient financial
statement because standard costing is the central component in the method of cost determination
as well as price-setting (Wagenhofer, 2016). The management accounting definition and method
varies from financial accounting, as MA includes both financial and nonfinancial considerations.
The key purpose of the production of this study is to pass through performance of the second
task effectively.
This really uses a wide variety of managerial accounting documents to promote the
performance assessment procedure, as well as several budgeting process strategies enable proper
knowledge about the business employee's success. Various strategies and their effect are
addressed as a central objective of this review and they are analysed from a separate angle.
Moreover, methodologies used during MA offer a good picture in the context of company to
make better results.
TASK 1
P1. Management accounting and management accounting systems
Management accounting functions include formulating market objectives like
understanding the financial impact of corporate decision making, tracking spending, and
maximizing profit. MA theory includes the design of gathering financial information,
documents as well as assumptions, outstanding management, extra cost of absorption, as well as
reference of accounting discipline. MA Systems aim to create cost accounting records for
managers' organizational use in order to enhance the effective decision making process and
better operate the company (Epstein and Lee, 2015). Some of the useful system of MA that can
be used by Innocent Drinks in making proper decision is discussed underneath:
Inventory management system: This system helps a company to retain an optimal
amount of inventory such that it can access as it is needed and thus does not get to deal with
surplus product problem or in appropriate product. This system is managed by
implementing different algorithms, with some of the more efficient methods being FIFO, LIFO,
ABC Analysis, JIT etc. (Botes and Sharma, 2017).

In context of Innocent Drinks the inventory management system have an important part
in managing the organization's holding costs and price levels. Manager can use a standardizing
supply chain management system to create storage stocks and product inventories.
Company items are typically the home pieces that are cumbersome to bring to sell as they are
sold by a list in stores and these pieces are shipped from the factory as they are ordered. This
inventory management program is basically needed by this organization as this program helps
reduce the expense of the keeping and able to promote goods rapidly and efficiently.
Job costing system: This MA system is a program which deals with the expenses
involved among each work a company conducts (Drury, 2013). This work costing system is done
in a sequence of steps; initial costing of every work including small or big is reported and then,
at the conclusion of the evaluation process, all costs are split into separate cost object that can be
valuation, output, distribution of materials and much more. In order to monitor and manage the
organization's budget, each expense pool is then evaluated to determine the amount of expenses
involved within them.
This MA system is needed at Innocent drinks because it allows this manager to track the
expenditures related to jobs like packaging and distribution. Company also uses cost-per-touch
methodology associated with this method to track its expenditures.
Cost accounting system: This system is a mechanism that companies use to measure the
expenses associated in their goods being made and marketed. The cost of this assessment covers
all the expense pools including cost of production, cost of marketing and much more. This
framework aims to define expenses paid with each organisation's commodity.
This accounting parameter is helpful for Innocent drink management because it can
determine which goods are more cost-involved and so it can evaluate if they really are worth
investing a massive proportion or whether they're able to achieve a large market share. Company
also uses this method to measure the prices of its goods and to select its product line which is
more profitable and demanding in the market.
Price costing system: This management method depends on a methodology focused on
economics rather than scientific and machinery. Through this method, a company should
determine the price of each of the goods so that it can lead in their consumers becoming
extremely successful and happy (Hiebl and Richter, 2018).