Management Accounting System (pdf)

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Management accounting along with essential requirement at business................................1
P2. Various methods to produce construct accounting reporting................................................3
M1. Benefits of Management accounting system as well as their application............................4
D1. Integration of management accounting system and reporting within organizational
processes......................................................................................................................................5
TASK 2............................................................................................................................................6
P3. Costing technique to prepare income statement....................................................................6
M2. Application of accounting technique and preparation of financial reporting documents... .7
D2. Interpretation of data.............................................................................................................8
TASK 3............................................................................................................................................8
P4. Planning tools for budgetary control.....................................................................................8
M3. Uses and application of planning tools to forecast budgets.................................................9
TASK 4..........................................................................................................................................10
P5. Ways in which management accounting systems are adopted to respond financial
problems.....................................................................................................................................10
M4. Management accounting to lead sustainable success........................................................12
D3. Planning tools to solve financial problems so to lead sustainable success.........................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is termed to a distinct profession consolidates financial
statements to deliver information that helps in taking effective decisions for the transformation of
enterprise (Bennett, Schaltegger and Zvezdov, 2013). It involves identification, measurement,
interpretation together with communication of financial data to internal users who aids valuable
suggestions while making decisions. It is used to forecast future, understanding variances,
analysing returns of heavy investments and projecting revenue growth. The accounting uses
information to prepare reports from operational department so to provide continuous insights
about performances as well as position of business. To perceive deeper knowledge about
management accounting, selected firm is Oshodi PLC which is specialised in manufacturing of
JOJO fruit juice. The report comprises information about management accounting together with
its systems and methods involved in accounting reports. It also include cost techniques for the
preparation of income statements and pros together with cons of planning tools that are used to
control budgets. At last, it compares the ways in which management accounting is used at
company to respond problems of finance and to lead towards sustainable success.
TASK 1
P1. Management accounting along with essential requirement at business.
Management accounting is featured to usage of information that are concerned with
management as well as evolve decision making. It provides information about earnings, profits,
losses, assets and cost so that future decisions are formulated in present time period. With the use
of management accounting, informations are used to evaluate performances of workforce
together with organisation so to manage regular operations and activities (Blocher, Stout and
Cokins, 2010). It is required at Oshodi PLC to calculate receivable amounts, optimising prices,
inventory valuation as well as keeping records in systematic manner.
Management accounting system: These are affiliated with procedures to collect data
and converting them into purposeful financial statistics. Accounting systems helps in monitoring
functions, operations and transactions so to improve effectiveness of business. Following are few
accounting systems that helps managers of Oshodi PLC to maintain productivity of fruit juices.
Inventory management system: To track sales, deliveries as well as inventory levels,
inventory management system is used by managers of an organisation. It helps in creating
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production related documents such as bill of material addition to work order. The essential
requirement of the system at organisation is to categorise materials as well as managing
inventories at workplace or other locations. It is required to provide demanded inventory at right
time to manufacturing area so that products are produced without any delays. It is used to
organise inventory data and avoiding product outages addition to overstock or understock.
Operating team of Oshodi Plc uses inventory system to track stock, managing reorder point,
optimising inventory and generating reports.
Cost accounting system: To determine suitable product cost, cost accounting system is
used which helps in profit analysis addition to cost controlling. The system is essentially required
at workplace so to control costs and making critical decisions after analysing all the relevant
costs such that efficiency is enhanced along with making more profit margins. It helps in
estimating closing product value, work in progress addition to finished goods inventory in order
to prepare financial statements (Budding, Grossi and Tagesson, 2014). It helps managers of
Oshodi PLC to analysing cost, allocating resources as well as reducing and commutating costs of
distinct products related with fruit juice.
Price optimising system: To understand customer perceptions as well as buying
behaviour so to determine prices of products, price optimising system is used to optimise prices.
The essential requirement of price optimising system is to modify pricing structure for discount
pricing, initial pricing addition to promotional pricing. Administrators of Oshodi Plc analyses the
impacts of demand according to changes in prices of different fruit juices. They consider all the
costs that are indulge in the manufacturing of JOJO fruit juice and allocates prices that are
favourable to customers.
Job costing system: In order to prepare standardised reports related to profitability of a
specified job or product, job costing system is used that helps in assigning job numbers to
individual items. Essential requirements of job costing system at respective business to reduce
risks, improving techniques to control cost addition to enhancing profitability chances. It
involves procedures to systematically determine material addition to labour costs for distinct
products or jobs as well as using the information for the purpose of developing quotes for
customers. Production unit of Oshodi PLC uses the system to track material prices which are
scrapped while producing JOJO fruit juice or performing job services.
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