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Management Accounting Assignment | Oshodi plc

   

Added on  2021-02-20

16 Pages5440 Words37 Views
ManagementAccounting

Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1TASK 1............................................................................................................................................1P1. Explain management accounting and requirement of different types of managementaccounting systems in the organization.......................................................................................1P2. Evaluate those methods which are used for management accounting reporting...................3M1. Benefits of management accounting system and its application in the organizationalcontext..........................................................................................................................................4D1. Critically evaluated that how accounting systems and reporting integrated with eachothers............................................................................................................................................5TASK 2............................................................................................................................................5P3. Calculate cost by using cost analysis techniques and prepare income statement by usingabsorption and marginal cost method..........................................................................................5M2. Evaluate the range of management accounting techniques and produce financial reportingdocuments....................................................................................................................................6D2. Develop financial report which accurately interpret data for different business activities...7TASK 3............................................................................................................................................7P4. Advantages and disadvantages of different types of planning tools used for budgetarycontrol..........................................................................................................................................7M3. Use of different planning tools and their application for preparing and forecasting budgets......................................................................................................................................................9TASK 4............................................................................................................................................9P5. Companies are adopting management accounting system to respond financial problems....9Comparison between Cambridge manufacturing with Oshodi plc............................................10M4. Management accounting can lead organizations to sustainable success............................11D3. Planning tools for accounting respond appropriately to solve financial problems.............11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13

INTRODUCTIONManagement accounting is the managerial application which helps the manager toperform according to the rules & regulation. It also provide various benefits where organizationalstakeholders takes advantage of it. With the helps of management accounting, manager usevarious provisions that provide accounting information for the further decision making process(Arena and Arnaboldi, 2014). It also helps in improving individual performance as well ascontrolling managerial functions. For the better understating Oshodi Plc selected for this reportand company produce a wide range of fruit juice. JOJO fruit juice is one of the selected produce that produced by Oshodi Plcmanufacturing company. This report include various topics such as management accountingsystem as well as its requirement in the manufacturing company in order to improve efficiencyand effectiveness. Accounting report helps the manager to record performance of individual aswell as whole organization in order to develop future strategies. In addition, it includes theplanning tools that required for budgetary control or financial problems which impact businessoperations. MAIN BODYTASK 1P1. Explain management accounting and requirement of different types of managementaccounting systems in the organizationManagement accounting is the process which provide financial information and thoseresources which required to perform business activities. It is basically used for internal analysispurpose because it is different from financial accounting (Armstrong, 2014). It helps the managerto develop various strategies on the basis of available information with the helps of managementaccounting. Manager of Oshosi Plc, follow various management accounting principles orstandards in order to maintain their accounting records for future understanding. Introduction: As per given scenario, management accounting plays very important rolein the business and decision making process which provide accurate information to developstrategies. Management accounting systems consist internal analysis of various systems whereorganizational users measure and evaluate its process for effective management. This task1

include the different types of accounting systems which helps the manager to improveoperational performance and it further helps in achieving business goals & objectives. There are various types of management accounting systems followed by organizationsand some of them discussed below: Inventory management system: It is the inventory management control system whichhelps the manager to review stock level on regular basis. It essentially required to keep recordsof inventory which helps the manager to perform according to the requirement of production. Byusing this system, management able to measure or monitor business performance. In context ofOshodi plc, manager follow inventory management system to record their inventory level anddevelop strategy accordingly. This system also include three types of managing inventory suchas LIFO, FIFO and AVCO. JOJO fruit juice manufacturing company adopt FIFO ( First In FirstOut) which helps in reducing wastage from warehouses and it will reduce product cost thatautomatically increase the profit margin (Azudin and Mansor, 2018). By using inventorymanagement system business able to prevent the situation such as shortage or wastage of rawmaterial. Cost accounting system: It is also costing system because it helps the manager toestimate product cost. It is one of the effective framework that used by the business forinventory valuation, cost control and profitability analysis. This system required to measureproduct cost and further helps the manager to develop their strategy accordingly. In context ofJOJO fruit juice manufacturing company, manager estimate juice cost on the basis of variousactivities (Bierstaker, Lowe and 2014). So they try to minimise or control product cost over theproduction period. Cost accounting system helps in estimating accurate cost which further utilizein decision making process. If produced goods are profitable then it will be proceed furtherotherwise they identify other ways to minimise cost or maximise profit margin. Price optimization system: This model used to analyse that how customer's demand willchange due to change in the price of product. For this analysis, manager required data orinformation regarding cost of product and inventory level which helps in improving profitmargin. In context of Oshodi Plc, manager set product price which meet customer objectives andsatisfy their need. Along with this, it helps the company to analyse buying pattern and the rangewhich is suitable to maximise business productivity as well as profitability. This accounting2

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