Management Accounting: Techniques, Systems, and Applications

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management accounting systems..........................................................................................1
P2: Management Accounting Reporting......................................................................................1
TASK 2............................................................................................................................................1
P3: Calculation of costs...............................................................................................................1
TASK 3............................................................................................................................................7
P4: Planning tools for budgetary control.....................................................................................7
TASK 4..........................................................................................................................................10
P5: Comparison of organizations for adaption to management accounting systems to respond
to financial problems..................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERNCES.................................................................................................................................13

INTRODUCTION
Management accounting are techniques that break down, recognizes, measure, translate
and conveys information that empower organisations to accomplish their goals. They increases
efficiency of managers by ensuring that all resources are fully utilised.(Chung and Cho, 2018)
(Chung and Cho, 2018).These accounting focuses providing quality at justified prices that build
organisation image and increase customers. With help of these accounting companies become
cost conscious. This helps them to avoid extra cost by using capital budgeting, budgetary control
etc. to reduce expenses and earn profit on time. They are the most reliable source for
management as they provide genuine information. They assist companies to make better plan for
future activities. This can be done by providing financial data and non financial data on regular
basis to management. This report is based on Prime Furniture. This company is a manufacturer
of different kind of furnitures such as beds, sofas, modular kitchen and windows also. This
assignment mainly focuses on systems of management accounting, application of its techniques.
In addition to these, use of planning tools and different ways in which company this to solve
problems are also discussed.
TASK 1
P1: Management accounting systems
Completed in PPT
P2: Management Accounting Reporting
Completed in PPT
TASK 2
P3: Calculation of costs
Costs are calculated with different types of techniques. These cost are incurred within an
company. There describe as follows-
Marginal Costing- Marginal costing refers to the changes in production cost which
occurs from producing one extra unit. In this costing fixed cost is written off against contribution
and variable cost is charged to cost of units (Di Vaio and Varriale, 2018) (Ionescu, 2016).
Marginal costing is important concept as organisations can optimise their manufacturing. Prime
furniture with help of marginal costing can generate level of profit.
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Advantages-
 Cost comparison will be meaningful as fixed cost of Prime furniture will not be carried
forward to next accounting year.
 Problems relating to over and under absorption will not arise for Prime furniture in
marginal costing.
 Marginal costing does not includes fixed cost of production. On this basis for Prime
furniture techniques of marginal costing will be easy to operate and simple to understand.
Disadvantages-
 Segregation of total cost into fixed and variable cost will create problem for Prime
furniture.
 Management of Prime furniture cannot make quality decision. For decision company
cannot consider contribution alone and they might vary if new techniques are introduced
in production process.
 Exclusion of fixed costs do not make any sense for Prime furniture and these costs are
also incurred in manufacturing of products.
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