Analysis of Management Accounting Systems
Added on 2020-07-22
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MANAGEMENT ACCOUNTING
INTRODUCTIONA branch of study where a wide range of financial plans prepared, assessed, implementedas well as evaluated is considered as management accounting (MA). It is mainly helpful forbusinesses for making those decisions and judgements which rely under the internalenvironment. The reason is that it does not emphasise on any kind of external environment anddecisions related to this (Tucker and D. Lowe, 2014). For the current project, Hungry HouseCompany is taken into consideration which is a kind of small business enterprise in UK. Further,it operates in the hospitality industry of UK where it serves different food items to targetcustomers. From the present report, different systems of MA which are used by chosen firmalong with key requirement within workplace of them will be discussed. Apart from this,different reports used by Hungry House in order to complete the procedure of MA reporting aredescribed. Second part of study consists of preparation of income statements by applyingmarginal and absorption these two MA techniques. Further, planning tools are evaluated whichare considered by the firm for budgetary control. At the end of project, techniques of MA aredescribed through which Hungry House solves different financial issues. TASK 1P1 Describing list of systems of MA which are implemented at the workplace of Hungry Housealong with their essential needsBusiness ReportFrom: Management accounting OfficerTo: General ManagerHungry House CompanySubject: Systems of management accountingDate: 29th November 2017IntroductionThe present business report consists of those systems of MA which are implemented by themanager of Hungry House at workplace. All the systems are highly important for everybusiness for making effectual internal business decisions. Moreover, in this report, essential1
needs of such systems are discussed. Systems of MAIllustration 1: Systems of management accounting(Source: Messner, 2016)Price optimisation: For every company, price is an important element on which products andservices are sold among customers. Further, managers highly concerned towards this aspectbecause higher the pricing level leads to decline attraction of users. This stated system ofmanagement accounting is a supportive tool for managers of Hungry House in order todetermine an effective price of food items which are sold by it. Generally, firms are chargingdifferent levels of prices within particular period of time (Bruynseels and Cardinaels, 2013). Onseveral prices, responses of customers for purchasing goods and services differ up to a highextent. Considering this tool, firm is able to determine that which pricing level more customersattracted for purchasing food items. A specific price where the highest sales generated byHungry House that will be selected for selling products for long term. In short, this system isapplied by the company for opting one profitable price level at which more people attracted andit can earn higher sales and income. Cost accounting: An element of financials at which every business is highly concerned is costwhich must be lower within working environment. The reason is that, on this particular aspect,profitability and financial position of firm depends. When costing of the products is high, in that2
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