Management Accounting in IMDA TECH

Management
Accounting
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INTRODUCTION
Management Accounting is the most effective tool for making the business objectives in
a sustainable manner. Here are so many tools which can be used by the organization for gaining
higher productivity. By implementing management accounting tool, company could use an
efficient strategy that can be used by the organization for making the business sustainable and
reliable. Here are various kinds of business objectives that can be used by the organization for
making the business objectives. Here are various management accounting reports that can be
used by the organization for gaining sustainable development in an effective manner (Amoako,
2013). Various budgetary planning tools are used for measuring the expected results with the
actual one and gain the sustainability in an effective manner. This report is based on the IMDA
TECH company which main operations are to produce the business mobile chargers of various
segments. Here are so many tools that can be used by IMDA TECH for making the sustainable
development.
TASK 1
P1 Management Accounting and its different types of management accounting systems:
Management accounting system is a kind of process under which organisation for
identifying, summarizing, assessing and evaluating the non- financial information that can be
implemented by the organisation for making the business objectives in an efficient manner.
Management Accounting encompasses whole kinds of information which are related to the
business operations. Management Accountants implement information linked to the costs of
goods or services purchased by the organisation. Budgets are likewise implemented as a
quantitative expression of the organisation’s plan of operation (Management Accounting, 2017).
Individuals in managerial accounting implement performance reports to note deviations of actual
outcomes from budgets.
Here are various kinds of management accounting systems which are mentioned as
under:
Cost Accounting system: This is the system which is used by the organisation for
making the business development in an effective manner. Now, management of IMDA TECH
would require to make the product in a cost efficient manner that could reduce the cost of the
product. By using this tool, cited organisation would require to make an efficient strategy which
would be used by the organisation for gaining the strategy in an effective manner. By using this
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technique, IMDA TECH would reduce per unit cost by removing wastage cost efficiently
(Vinayagamoorthi and et. al., 2012).
Job Costing System: This is elaborated as the tool of recording costs of manufacturing
job, instead of process. Along with the Job costing systems, a management accountant could
track of cost of each job, handling data that are usually highly concerned to operations of the
organisation. Job costing normally said that the particular accounting tool are used to track
expense of producing a product. This is the best tool that can be implemented by the organisation
for making the new product efficiently.
Price Optimization System: Under this system, consumer perspective would be assessed
regarding the company’s product price in an effective manner. This is the tool via which the
price of the product is identified in an effective manner which can be used for making the
business objectives in an effective manner. Via this tool, organisation is totally relied upon the
management accountant, who by using various tools, make the price of the product in an
effective manner. Now, this can be simply said that the management of IMDA TECH would
ultimately leads to gain the sustainability.
Inventory management system: This is the system which is implemented for making
the inventory efficiently. Via Inventory management system, firm would track products through
whole supply chain of it an organisation operates in. Which comprises each from manufacturing
to retail, warehousing to shipping, and whole movements of stock and parts between. Inventory
is managed via LIFO, FIFO and AVCO method (Macinati and Anessi-Pessina, 2014).
LIFO method: This stands for “Last in, First Out”. Which is implemented to place an
accounting value on the inventory. LIFO method operates as per the assumption that the last item
of inventory purchased is firstly sold out. On the other hand, this is rightly said that the new
inventory assets are entered firstly and then it is sold firstly.
FIFO method: This is the inventory valuation method, under which firstly goods are
purchased, are sold out firstly. Various organisation uses this method to optimise the value of the
inventory in an effective manner. On the other hand, the last inventory asset is recorded as sold
firstly.
Average Costs: Average cost method would emerge total costs of goods which are
available for sales and divide it by the total sum of the product from starting inventory and
purchases.
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