Management Accounting.

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management accounting and its types of management accounting system..........................1
P2: Different methods used for management accounting reporting............................................3
M1: Evaluate the benefits of management accounting system and its applications...................4
D1: Management accounting system and its reporting integrated within organisational process
.....................................................................................................................................................5
TASK 2............................................................................................................................................5
P3 Calculation of cost using an appropriate techniques..............................................................5
M2: Various types of accounting techniques and financial reporting documents......................7
D2: Data interpretation................................................................................................................7
TASK 3............................................................................................................................................7
P4: Budgetary control and planning tools its advantages and disadvantages.............................7
M3: Uses and applications of planning tools for preparing and forecasting budgets.................9
TASK 4............................................................................................................................................9
P5: Responses of management accounting system to deal with financial problems..................9
M4: Management accounting to sustainable success in responding to financial problems......11
D3: Planning tools respond appropriately to resolve financial problems.................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting is the process associated with managerial accounting or cost
accounting which is used for analysing, presenting and interpreting of accounting information. It
use to assist management in the process of decision making, creation of policy related to
operation of companies. Swain & Jones is a retail auto-mobile company. The company markets
and sell new pre owned auto-mobile. Company also sell various accessories and spare part and
offer maintenance and repair services. The company also provide various a wide range of finance
scheme for vehicle purchase.
In this report various type of management accounting system are discussed along with
reporting method that benefits its working. Management use cost method and accounting
information for determining healthy cost for its product. Swains & Jones applies different
planning tool to properly resolve various financial issue which are addressed in this project. Its
management took several accounting system to resolve company's financial problem for
achieving target (Ward, 2012).
TASK 1
P1: Management accounting and its types of management accounting system
Management accounting is based on cost accounting methods. It is useful for
organisation in measuring performance of employee as well as company efficiency. The main
benefits of this concepts are better decision making and help an organisation in achievement of
organisation goal. Swain & Jones is a small size enterprises so it is very important for their
management to produce financial statement. Identify future risk and compare employee's
performance by adopting various management accounting system. It will result in attracting
more customers towards company products and will increase its profitability.
Swain & Jones uses the main management accounting system for creating impressive
plan for doing more sale and make decision that help them to succeed its business objectives.
Various accounting system are cost accounting, price optimisation, inventory management,and
job costing which are explained below:
Cost accounting systems: A system (also called product costing system) that contain a
framework used by firms to estimate the cost of their product for calculating and measuring
profit, inventory valuation and control additional cost. Swain & Jones use this system for
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estimating accurate cost of product that is critical for profitable operation (Wickramasinghe and
Alawattage, 2012). It is dealing in auto-mobile industry so it is very important for their
management to know which cars are more profitable and which one are not , this can only be
happen when management has estimated the correct cost of its product. This system also help
swain & Jones in computing the closing stock of various accessories, estimating quantity of
product that are work in progress and finished good that are ready for sale. It all help company
management in preparation of financial statements.
Price optimisation systems: It gives a clear picture that how demand for a product
varies at different price level and then combine that data with information on cost and inventory
level to recommand price that will improve profit. In Swain & Jones management use this
system of management accounting to set a decent price for its product so more number of
customer pay for their product that increase the profitability of business. The management of
Swains & Jones consider all factor to allocate appropriate price tot their product.
Inventory management system: This system is useful in tracking all raw material, work
in progress and finished goods involve in its business operation. Swain & Jones uses this system
to track everything form its production to retail, warehousing to shipping and any other
movement of stock and parts use in its operation. Basically ,this system help management to see
all the small moving parts of its operation and allows them to make better decision in
investments. (Inventory management, 2017). It help them to manage their stock on a daily basis
as company place new order for product and ship order out to customer. Small business firms
like Swain & Jones are usually more interested in ordering a product and making sales, so
company create an effective inventory management system.This process assist in minimising the
risk involved in inventory management and help to control stock related affairs of an
organisation.
Job costing systems: This system refer to assigning of manufacturing costs to an
independent product or a group of product. It is used only when manufactured product are
identical or nearly different from each other. Swain & Jones use this approach to record specific
cost to individual jobs and measure them to see if the costs can be reduced in later jobs. It also
help management to see that if any additional cost incurred may be billed to its customer that
help management to generate revenue in future. Process, standard and contract costing are
example of job costing system that help management to calculate cost of material, labour and
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