Management Accounting Assignment : Excite Entertainment Ltd
Added on 2020-12-18
13 Pages4139 Words55 Views
ManagementAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1 ...........................................................................................................................................1TASK 2............................................................................................................................................4TASK 3 ...........................................................................................................................................5TASK 4 ...........................................................................................................................................7CONCLUSION..............................................................................................................................10REFERENCES .............................................................................................................................11
INTRODUCTIONManagement accounting performs a vital role in the corporation and it is provide usefulinformation to the manager so that they can better decisions related to the growth of organisation.It emphasis towards management & performance of control functions and it is the process ofanalysing, measuring and interpreting the financial information and data which is useful for thecorporation to achieve its objectives (Tucker and Lowe, 2014). To better this concept ExciteEntertainment Ltd has been chosen which belongs to leisure and entertainment industry ofUnited Kingdom. There are various topics are covered in this report such as: to describemanagement and the systems of it, methods used for management accounting reporting,appropriate techniques of cost analysis to prepare an income statement using marginal &absorption costs. Apart from this, it also discuss about advantages & disadvantages of distincttypes of planing tools used for budgetary control and how corporations are adapting managementaccounting system. TASK 1 Management accounting & its different types of systems:Management accounting is the process which is useful to evaluate business cost &operations to prepare financial statements (Tucker and Parker, 2014). It provide help to themanagement to take effective decisions which support the growth of company. ExciteEntertainment Ltd can apply different types of management accounting systems which are asmention below: Cost accounting systems: This specific system has been used by the organisationinorder to anticipate costs of its products so company can analyse the profitability (Richardson,2012). It is help to measure & record the cost which occurs in production process so it isimportant for Excite Entertainment Ltd to use this system in order to maintain records which arefaced by organisation by providing entertainment services to the clients. As corporation used thisto record all activities that are performed by the company. There are basically two types of costaccounting system which are as: job order costing and process costing (Quattrone, 2016).Inventory management system: This system is an integration of technology which ishelpful to monitor and check the inventory in business. It is useful for the Excite EntertainmentLtd in context to the ordering and managing the stock of the corporation. It involves management1
of raw material, elements & finished products. For the organisational growth it is very usefulfunction which eventuate the health of supply chain (Quattrone, 2016). With the help of itmanagement can maintain centralised record of each assets & items which are of control by thecompany. It is beneficial for the corporation in order to analyse how much units have been soldand how much are required to purchase. As effective inventory system is helpful to minimise theunnecessary cost. Job costing system: This system has emphasis to analyse the cost which involves in job.It is used by the Excite Entertainment Ltd to gather information related to the cost associated tothe particular product or service (Parker, 2012). To analyse the accuracy of a organisation'sestimating system this tool will be useful. There are various information is require in order tocollect information about this system. Direct material: This job costing system is help to determine the cost of direct material which isused in by the company for the production process. Direct labour: It is important for the Excite Entertainment Ltd to analyse the cost of labourswhich provide entertainment services to the clients. Overhead: It is the unnecessary expenditures which can affect the profitability of theorganisation. It involves depreciation on production equipment & building etc. Difference among management accounting & financial accountingFinancial accounting- The financial accounting may be defined as a kind of accounting systemwhich is related with the summarising, analysing and reporting the financial transaction of abusiness. Financial accountingManagement accountingIt is the process of preparing financialstatements of organisations which is helpfulto provide financial strength & position ofcorporation to the consumers, creditors,investors etc. Management accounting is the process ofanalysing, measuring & interpreting thefinancial information and data which is usefulfor the corporation to achieve its objectives(Nixon and Burns, 2012).It emphasis to provide information to externalparties such as: lenders, public regulators(Parker, 2012).This accounting takes companies financialinformation & develops reports forconfidential and internal use by managers inorder to analysing ways to runthe corporationmore smoothly. 2
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