Management Accounting Assignment PDF | AIRDRI
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Added on 2021-02-22
Management Accounting Assignment PDF | AIRDRI
Added on 2021-02-22
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................4TASK 1............................................................................................................................................4P1 Explain management accounting and give the essential requirements of different types ofmanagement accounting systems................................................................................................4P2 Explain different methods used for management accounting reporting................................6M1 Evaluate the benefits of management accounting systems and their application within anorganisational context.................................................................................................................8D1 Critically evaluate how management accounting systems and management accountingreporting is integrated within organisational processes..............................................................8TASK 2............................................................................................................................................8P 3 Calculate costs using appropriate techniques of cost analysis to prepare an incomestatement using marginal and absorption costs...........................................................................8M2 Accurately apply a range of management accounting techniques and produce appropriatefinancial reporting documents...................................................................................................13D2 Produce financial reports that accurately apply and interpret data for a range of businessactivities....................................................................................................................................13TASK 3..........................................................................................................................................14P4 Explain the advantages and disadvantages of different types of planning tools used forbudgetary control......................................................................................................................14M3 Analyse the use of different planning tools and their application for preparing andforecasting budgets....................................................................................................................15TASK 4..........................................................................................................................................16P5 Compare how organisations are adapting management accounting systems to respond tofinancial problems.....................................................................................................................16
M4 Analyse how, in responding to financial problems, management accounting can leadorganisations to sustainable success..........................................................................................17D3 Evaluate how planning tools for accounting respond appropriately to solving financialproblems to lead organisations to sustainable success..............................................................17CONCLUSION..............................................................................................................................18REFERENCES .............................................................................................................................19.........................................................................................................................................................1
INTRODUCTIONManagement accounting also known as managerial accounting is a chain of activities toanalyse cost of business and their operations to build financial reports, records and various kindsof accounts to take appropriate decisions to achieve organisational goals and objectives. In otherwords, it is an important act to make sense about financial and cost data for translate it intomeaning information and data in an organisation. This report is based on AIRDRI which isfounded in 1974 by significant advancement of hand drying industry by finding out gaps. Thisreport is based on management accounting and necessary requirements for managementaccounting systems. It also includes kinds of methods used for management accounting reportingto get fruitful for an organisation. It also includes calculation of various kinds of cost bypreparing income statement of both marginal and absorption cost. Further it includes advantagesand disadvantages of planning tools for budgetary control and in ways by organisation adoptmanagement accounting systems to resolve financial problems. TASK 1P1 Explain management accounting and give the essential requirements of different types ofmanagement accounting systems.Management accounting is one of most important part of accounts in which applicationof knowledge, tools and techniques with concept should be prepare to get accurate accountinginformation (Banerjee, 2012). Accounting information proved helpful for organisation toformulate plans and policies and to control organisational operations for making effective
decisions by using resources for safeguard assets. Management accounting is an process andpresentation of accounting and data related to economics that helps in evaluating performance ofmanagement for building strategies, to compare things in better way with budgeting andforecasting. Essential requirement of management accounting systems:Inventory management system:Inventory management system helps in track goods in the whole supply chain that supplygoods and services to ultimate consumer base. Inventory management system covers fromproduction to retail, warehouse to shopping and includes movement of goods or stock inbetween. Inventory management system proved helpful to track supply products and servicesfrom which path goods passes through (Cadez and Guilding, 2012.). It is very much potentialfor transfer management that helps to manage multiple sites simultaneously to coordinate eachand every activity in proper way while move products at place where it is important. Soinventory management is very much potential for an organisation to deal in effective manner.Cost accounting system:Cost accounting system also known as product costing system that is an framework usedby various firms or organisations to get estimate about cost of products and services to analyseprofitability, valuation of inventory by controlling cost in proper way. In context of AIRDRI theyuse various kinds of cost accounting system to coordinate each and every activity to estimateaccurate cost of products and services that is an critical task for an organisation. It helps inestimating closing values of materials, finished products and work in progress and many more inpositive way. Price optimisation system:Price optimisation is an accounting tool that proved helpful in pricing fields to evaluatevarious applications that enables in set prices (DRURY, 2013. ). It helps to calculate in somemanner demand varies as price changes by combining data and information on basis of cost andinventory levels to recommend best prices that enhance pricing. In context of AIRDRI with helpof price optimization system organisation can be able to set best price as per demand and supplyof goods and services in best way.Job costing:
Job costing involves sum up of cost of materials, labour and overhead cost for a specificjob cost. This is an best tool and techniques that helps in tracing cost for an individual byexamining various factors in better way (Fullerton, Kennedy and Widener, 2014). It enables toaccumulate various kinds of cost and data at small unit such as materials, labour and overheadassociated within it. In context of AIRDRI they by using job costing can be evaluate variousfactors that associated with their cost and their structures in better way.Distinction between management and financial accounting:There are difference in management and financial accounting that are as follows:Aggregation:Financial accounting depicts the whole or entire results about business on other handmanagerial accounting reports on detailed manner in which includes profits of products, productline and geographical region of consumers.Efficiency:Financial accounting majorly related with complete profitability of a business on otherhand managerial accounting concerned with about factors that cause problems and ways toresolve them in positive way. Reporting focus:Financial reporting concerned with creation of financial statements that are distributed inboth internally and externally in an organisation. On other hand management accountingconcerned with operational reports that distributed within organisation.As after observing the difference in both these terms useful for an organisation to gain importantinsights and results out of it.P2 Explain different methods used for management accounting reporting.For an organisation there are various kinds of management accounting reporting thathelps in internal concentration of data in internal manner through financial accounting (.Herbertand Seal, 2012). It helps in taking important decisions and planning with controlling data andstatistics. All these methods that use by an AIRDRI helps in management accounting reporting toget desirable goals and objectives in proper way.Budget Report:Budget report is an kind of internal report proved useful for management by comparingand estimating budget projections to achieve actual performance that received during a period of
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