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Types of Management Accounting System : Report

   

Added on  2020-07-23

16 Pages4839 Words117 Views
MANAGEMENTACCOUNTING
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Meaning of management accounting and different types of management accounting system.....................................................................................................................................................1P2 Different methods of management reporting.........................................................................4TASK 2............................................................................................................................................6P3 Calculation of cost through Marginal costing and absorption costing and differencebetween the two...........................................................................................................................6TASK 3............................................................................................................................................8P4 Advantages and disadvantages of different types of planning tools for budgetary control...8P5 Adaptation of management accounting systems response to financial problems................10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13
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Illustration IndexIllustration 1: Computation through Net profits through Marginal costing.....................................6Illustration 2: Computation of Net profits through Absorption costing..........................................6
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ToThe General ManagerINTRODUCTIONManagement accounting is an effective method of analysing financial statements so thatefficient decision making process can be initiated in the organization. The financial statementsare, statement of financial position, statement of income and expenses and statement of cashflow. Ella's Kitchen group limited is a small scale organization functioning in UK which isinvolved in providing nutritious and organic food to children between the age of 4 months and 7years. The report makes comprehensive discussion on different types of management accountingsystem that can be used by the entity with the aim to ease out its business activities. Further,varied methods of management reporting will also be discussed in the report. In the end,calculation for net profit will be made using absorption costing and marginal costing methods.TASK 1P1 Meaning of management accounting and different types of management accounting system Management accounting is the process of analysing financial statements which canfurther help in decision making process of the organization. Management reports are preparedbased on it reflecting financial and statistical information available to the managers. Theperformance of the business can be controlled which has strong influence over the organizationalgoals. Ella's kitchen can take help on management accounting process for making better shortterm and long-term decision for the business. In order to analyse the financial statements, threetypes of statements are required, which are, statement of financial position, statement of incomeand expenses and statement of cash flow (Ward, 2012). It helps to improve the operations of theenterprise coinciding with the abilities of the entity. Further, it plays a vital role in drawingcompetitive advantage over other companies that are present in the market. In addition to this, ithelps in increasing the return of the business as forecasting of the cost is done through the pasttrends of sales and purchases. Potential change in the market place can be gathered for whichpolicies can be mad in advance. Management accounting systems helps in easing down the process. It helps in devisingthe plan, helps in decision making and manages the performance of the organization. Some of1
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