Management Accounting and Different Types of System

Management
Accounting

Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Management accounting and different types of system....................................................4
P2 Explain different methods of management accounting report..........................................7
M1. Evaluation of benefits of various management accounting systems..............................8
TASK 2............................................................................................................................................9
P3 Techniques to do the cost analysis for the formulation of income statement...................9
M2 Management accounting techniques and financial reporting documents......................10
TASK 3..........................................................................................................................................10
P4. Advantages and disadvantages of various planning tools used for budgetary control...10
M3 Analyse the use of different planning tools and their application for preparing budgets and
forecasts................................................................................................................................11
TASK 4..........................................................................................................................................12
P5. Organisations adapt management accounting systems..................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16
TASK 1............................................................................................................................................3
P1 Management accounting and different types of system....................................................3
P2 Explain different methods of management accounting report..........................................6
M1. Evaluation of benefits of various management accounting systems..............................7
TASK 2............................................................................................................................................8
P3 Techniques to do the cost analysis for the formulation of income statement...................8
M2 Management accounting techniques and financial reporting documents........................9
TASK 3............................................................................................................................................9
P4. Advantages and disadvantages of various planning tools used for budgetary control.....9
M3 Analyse the use of different planning tools and their application for preparing budgets and
forecasts................................................................................................................................10
TASK 4..........................................................................................................................................11
P5. Organisations adapt management accounting systems..................................................11
CONCLUSION..............................................................................................................................13

REFERENCES..............................................................................................................................15
Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Management accounting and different types of system.............................................................1
P2 Explain different methods of management accounting report....................................................4
M1. Evaluation of benefits of various management accounting systems........................................5
TASK 2 ...........................................................................................................................................6
P3 Suitable techniques of cost analysis to formulate income statement .........................................6
M2 Management accounting techniques and financial reporting documents..................................7
TASK 3 ..........................................................................................................................................8
P4. Advantages and disadvantages of different types of planning tools used for budgetary
control..............................................................................................................................................8
TASK 4..........................................................................................................................................11
P5. Organisations adapt management accounting systems............................................................11
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTIONThe
accounting is referred as the recording, analysing and summarising of the data which can
evaluated in the present and which is wholly based on the past activities of the business. The
accounting thus can be considered as the most important term in managing the effectiveness in
the business as with the help of old recorded accounts and information the organisation
formulates its planning and futuristic operations of the company. Thus in managing a firm and
controlling, monitoring, recording the overall transaction in the management of the company is
termed as the management accounting. There are multiple kind of management accounting that
are devised as per the need of the organisation.. thus it can be ascertained that the management of
accounting certainly responsible for the planning, controlling, directing and recording of all the
financial as wells non financial transaction in the firm. In this project report the main elements
and types of different management accounting along with their reforms are discussed. The major
concept of relating the company with the certain type of accounting, the advantages and
disadvantages are also elaborated in the report. Further more the type of issues that a company
faces in the accounting and other procedure, their evaluation and proposing the right set of
solutions to overcome such problems are discussed .
Management accounting is also termed as a managerial accounting system. There are
different types of Management accounts and reports that are required by a manager in order to
make their day to take decisions best effective way and formulate short term and long term goals
(Adler, 2013). This form of accounting system is mainly useful to make decisions internally in a
business organisation that mainly includes financial and non financial form of information’s.
There mainly is no particular time to formulate and use which forms of managerial report
business organisations can utilise this as per their requirement. This accounting system is
somehow different from a financial accounting system as it aid in internal aspect of entity. In
order to effectively understand practices and concepts of Management Accounting Excite
Entertainment Ltd is being used in the report. This project covers formation relating to concept
of management accounting along with its benefits. In addition with their different forms of
managerial techniques reports covered in this report. Advantages and disadvantages are covered
in this report which describes the manner in which organisations can effectively resolve their
financial issue and stimulate their performance.
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TASK 1
P1 Management accounting and different types of system
Management Accounting:
The management accounting is itself a combination of two main factor and function. The
main terms in which they are devised can be ascertained as it is mainly a accounting system that
is an integral part in the business and its management which contains more operations and
activities other then the basic responsibilities of the accounting. The formulation and study of the
managerial report are also a part of the management accounting along with that it does it does
impacts on formulation of the certain planning and determining the right set of policies and
principles which can be used to attain the maximum number of profit for the firm. The
management accounting system are significantly holds dynamic kind of reforms in the company
that is used to evaluate and study of the elements in each and every department to make the
company more strong and enabling it to achieve the organisational objectives and goals in terms
of high revenue earning. The most effective system of the management accounting is defined
here by as follows :-
Management accounting is a formative accumulation of two words that are management and
accounting. It is an accounting system that is mainly related to business management internal
part. Management accounting is mainly aid in formulating managerial reports that are required
by an organisation in order to formulate plans and policies for the future purpose. Organisations
are not bound to maintain a accounting system as it is wholly depend on their actual requirement.
Moreover, accounting system hold its own importance within business organisation and some of
the major effectiveness are mentioned below:
Cost Accounting System: The cost accounting system majorly emphasis on the
monitoring and recording of all the transactions out flows that have been made out in respect to
complete the tasks and activities and all process to manufacture and delivering the product and
services to its consumers. Thus the cost of any product, procedure, task and operation is certainly
derived and planned with the help of cost accounting system. The cost accounting system is the
basic foundation in determining the cost and prising factor. Along with this it certainly plays a
major role in the business in evaluating the proper need of the finance for any activity. It helps
in creating, forecasting and comparing the estimate for any cost in curing task in the
organisation.
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This system of accounting is mainly a form of system which effectively aid in evaluating cost of
products within all the form of cost are included such as variable, fixed etc. It is essential for
organisations to have proper and appropriate estimation of their products and services cost as this
estimation of cost will effectively help them to check their overall ratio of profit and loss of a
products and services. Excite Entertainment Ltd take effective advantage of accounting system in
order to properly check their different types of cost of financial products and services. It will
directly help them to focus on their services and products section that hold more beneficiaries to
company.
Direct Cost: These types of cost can effectively be traced to a particular cost centre such
as, department, product, process etcThe direct cost is understood as all the direct expense that
has been made on the completion of any task and . the product directly. This cost is measurable
significantly before and after the expenditures.
Standard Costing: The standard cost system is the measurable outcome which is derived
from the comparison of actual cost that has been incurred in the execution of plan and the
estimated budget of the cost. It helps in evaluating the los and profit margin from the
organisational objective and helps in setting up of standards regarding the expenses by
understanding the actual differentiation .
It is a type of costing system which is mainly related to evaluation of variance in between
estimated and actual cost. This mode helps an organisation to effectively aware about cost
difference.
Price Optimisation System: This is the another form of management accounting system
in this system the major elements that effects the prising of any product or services are
considered. The discussion of pricing is thus supported by the accounting system particularly.
This accounting give a proper framework to decide the price and give all the rational to the
management in the confines of an organisation to determine the overall and maximum price for
any good or service.
This form of accounting system effectively provides a formative framework which helps to
determine price of a service and a product which is more suitable for organisation and
consumers. This will automatically aid in effective evaluation and review of consumer
perceptions at a different price range. The major purpose of price optimisation accounting system
is to effectively offer various factors that will help to set price. Excite Entertainment Ltd is
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taking effective advantage of this accounting system to set their price which is both beneficial for
customers as well as organisation.
Job Costing System: The job costing system defines all the step that will be incurred
while executing the task in the organisation to achieve the goals and objectives. Thus for an
instance to manufacture a product in the organisation there are various steps will be involved
from collecting the raw material to its marketing and distribution to the retailer. In the job
costing system all the elements that will be incurred to perform and execute each step in the
formation and production of the product will be evaluated and the job costing will be measured .
this accounting systems helps in estimating the overall cost that will be expensed in different
kind of jobs.
This accounting system includes formative calculation of total cost that occurs within the process
of providing services and product and distribution of cost to each and every individual unit
relating to products and services (Tucker and Lowe, 2014). Job costing method is mainly
effective in that form of organisations that provide different types of multiple services and
products. Excite Entertainment Ltd offer different types of financial products and services. Thus,
it is essential for entity to make proper estimation of each and every individual unit cost. Within
this situation, job costing system effectively aid in evaluating cost of numerous form of financial
services and products.
Inventory Management System: The inventory manage system is refer to the
monitoring, calculating, organising and planning of all the stock in the ware house that will be
essential in the trading of the organisation in decent amount. The inventory management also
helps in analysing the financial status of the respective product and services of the company in
the market it help in understanding the demand and need of the products and maintaining the
effective flow of supply. The inventory management is also responsible for the reporting the
important information regarding the lack of any product or over stocking (high availability) of
any product. The concept of cost thus can be analysed with the term FIFO and LIFO which
basically states the principles of first in first out and last in first out both are different form each
other in the manner of delivering and collecting the offerings of the company. In the context of
inventory management system The LIFO is termed as the last articles are needed to be sold in the
first place. Thus FIFO is known as the selling of those goods in the first series which came in the
first time. The other significant method in the inventory can be used as the weighted average
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