Management Accounting: Systems, Methods, and Cost Calculation

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Elaborate management accounting and requirement of various kind of management
accounting systems. ....................................................................................................................4
P2 Methods used for management accounting reporting............................................................6
TASK 2............................................................................................................................................8
P3 Calculate costs by using tools and techniques.......................................................................8
TASK 3..........................................................................................................................................11
P4 Explain advantages and disadvantages of various tools of planning for the purpose of
budgetary control......................................................................................................................11
TASK 4..........................................................................................................................................14
P5 Compare and contrast organisation adapting management accounting systems to respond
financial problems.....................................................................................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Management accounting or managerial accounting or cost accounting, is the chain of
activities for identifying, measuring, analysing, interpreting and communicating data and
information to managers to achieve organisational goals and objectives in proper way.
Management accounting information helps to managers in an organisation to take decisions by
analysing each and every factor. This report is based on ABC limited which is an medium-sized
manufacturing sector. This report is based on management accounting and their various systems
that support to reach at desirable outcomes. It further elaborates various methods of management
accounting reporting and techniques for cost analysis by income statement. It also includes
advantages and disadvantages of kinds of planning tools that used in budgetary control by
comparing with other organisation by adapting management accounting systems to eliminate
financial problems.

TASK 1
P1 Elaborate management accounting and requirement of various kind of management
accounting systems.
Management accounting is an significant internal function of organisation and
organisation use it to record and report internal financial information (A. Hammad, Jusoh and
Ghozali, 2013..). The role and responsibility of management accountant is to coordinate various
events around the whole business by considering the needs and wants of business in proper way.
The major result of management accounting is to prepare periodic reports for the role of
companies department managers and CEO. In management accounting reports includes details of
cash in an organisation,sales revenue of an organisation with current payables and receivables of
an organisation that are important factors to evaluate financial position of an organisation
(AlMaryani and Sadik, 2012.). Various kind of information found in management accounting
that are differ from financial accounting in various contexts as financial accounting based on
historical data and information and management reports that are future oriented. Management
accounting reports are usually confidential in nature and proved useful for internal usage of an
organisation. Management accounting based and relied on accounting practices that are based on
management informational needs and wants.
An effective management accounting system reach up to all kinds of departments of a business
in which finance, information technology, Human resource and operations with sales.
Various kinds of management accounting systems:
Management accounting systems vary and majorly depends on their usage that depends
on organisation and their functions. Each and every systems is designed to provide information
that based on the needs of management that assist in decision making. There are various kinds of
management accounting systems that are as follows:
Cost accounting system:
Cost accounting system that also known as product costing system which is an kind of
framework that helps in estimating cost of products for the motive of analysis of their
profitability, valuation of inventory with controlling cost (Belfo and Trigo, 2013.). In cost
accounting system majorly two kind of cost consist in it that are job order costing and process
costing. Estimating the accurate cost of products and services is very much critical to obtain
profitable operations. A product is profitable or not can be ascertained after analysing the cost of