Management Accounting and Systems

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................4
Management accounting and different types of management accounting systems....................4
Different methods which are used for management accounting reporting.................................6
The benefits of management accounting systems and their application within the company....7
How management accounting systems and management accounting reporting is integrated
with organisational processes......................................................................................................8
LO 2.................................................................................................................................................8
Calculation of costs by using effective techniques of cost analysis............................................8
Management accounting techniques and financial reports.........................................................9
Financial reports that accurately apply and interpret the data for several business activities...10
LO 3...............................................................................................................................................10
Advantages and disadvantages of different types of planning tools used in budgetary control
...................................................................................................................................................10
Analyse the use of different planning tools and their application for preparing and forecasting
budgets......................................................................................................................................12
LO 4...............................................................................................................................................12
Compare how organisations are adapting management accounting systems to respond to
financial problems.....................................................................................................................12
Analyse how, in responding to financial problems, management accounting can lead
organisations to sustainable success..........................................................................................15
Evaluate how planning tools for accounting respond appropriately to solving financial
problems to lead organisations to sustainable success............................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Management accounting refers to the procedure of presenting accountancy data in order
to design the plans and policies which is adopted by the administration to operate its day to day
activities. It can be an activity of planning, organising, staffing, directing and dominant the fiscal
actionas of the business concern of the firm. It is essential to the administrator of the
organization to maintain the fiscal data and information and also assist in decision making
process. It is different form financial accounting because it will be prepared fro internal
stakeholders. Managerial accounting embrace many facets of account purpose at improving the
attribute of data which is delivered to management accounting about business concern trading
operations metrics (Alsharari, Dixon and Youssef, 2015). This report is based on Volkswagen
which is a German auto-maker and operate its business internationally. This firm was established
in 1937 and headquartered in Wolfsburg, Germany and operate its business in Automotive
industry. This assignment will discuss about management accounting and requirements of
different types of management accounting systems. Further, will discuss about different methods
of management accounting reporting, management accounting methods and proper financial
reporting documents. Advantages and disadvantages of various kind of designing tools that are
used in budgetary control and comparison of organisation which adopt management accounting
system to react to fiscal problems.
LO 1
Management accounting and different types of management accounting systems
Management accounting is a kind of accountancy which is helpful for the administrators
of the organisation to support the to manage the financial activities of the organisation in an
efficacious and efficient way and also support in the activity of determination devising in
different situations. In Volkswagen, the accounting financial manager manager of the company
can use it in manage the financial action like cost invest in manufacturing and others or have the
proper information of the finance which are invested by the company (Bennett and James, 2017).
There are number of accounting system which can be used by the firm in managing the finance
and decision making regarding it. Some of them are defined as beneath:
Inventory management system- In this system, the inventory of the organisations are
negotiated in an appropriate way. In addition to it, it traces the cost which which generates due to

the cost of storage of the goods in warehouses. The main objective of this management
accounting system is to make balance among the demand and supply of the goods of the
organisations. In Volkswagen, the management of the company can use this system under
guidance and with the help of it they can track the record of raw material to manufacturing a car.
The production function will take decision fro manufacturing new products as per the available
quantity of manufactured products like car in warehouse.
Price optimization system- This management accounting system is consisted in the
activity of setting price of goods and services on the base of customers feedback and analysis of
collected information of consumers (Chenhall and Moers, 2015). Generally, it is important for
sales division of the company because with the assistance of it, they set the price of the product
at a level is effective for both seller as well as purchaser. Apart form it, the organisations which
are not used this system of management accounting they face the problems in their business
related to finance like lack of sales and profitability etc. In Volkswagen, the administration of the
company implement this accounting system in their business with the purpose of setting the price
of their products. This help the company in maximising the sales and increasing the level of
profitability.
Cost accounting system- This accounting system is related with holding a brief record of
received cost in different operations. By using this system, the organisation can get information
about their actual financial position and make compression between their actual and estimated
cost. This management accounting system is beneficial for finance function of the company
because with the help of it they can formulate financial plan and make effective allocation of the
financial resources within the business activities. In Volkswagen, the financial team can apply
this system in the business because it help in keeping and managing the manufacturing cost at
minimum level. It is also crucial for the assignment of available finances into the different
production activities.
Job costing system- It is an another kind of management accounting system which is
affiliated to the assigning the manufacturing cost a specific unit of output. Generally, this
accounting system is important for those of organisations in which the portfolio of production is
bigger and their cost is differ from each other (Cooper, Ezzamel and Qu, 2017). So it is
important for determination of cost, loss, profitability of each job. In Volkswagen, the