Management Accounting of Zylla Company - Assignment

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MANAGEMENTACCOUNTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1: Understanding of management accounting systems........................................................1P1 Management accounting and essential requirements of various types of managementaccounting system..................................................................................................................1P2 Different methods applied for management accounting reporting....................................2TASK 2............................................................................................................................................3P3 Calculating cost is appropriate tools and techniques in making income statements.........3TASK 3............................................................................................................................................6P4. Various kinds of planning tools and budgetary control system.......................................6TASK 4............................................................................................................................................8P5 Comparing organisation adapting management accounting systems to respond to financialproblems.................................................................................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONThe main objective of this report is to determine management accounting fundamentalsthat are applied to the business environment as well as the corporations that are operated in thatenvironment. The report will also identify how management accounting uses financial data orinformation in planning decision, monitoring and managing finance in Zylla Company orbusiness. The report will determine advantages and disadvantages of different types of planningtools used in controlling budget. Furthermore, the report will also compare Zylla Company isadapting management accounting systems to respond various financial issues or problems in anorganisation.TASK 1: Understanding of management accounting systems.P1 Management accounting and essential requirements of various types of managementaccounting systemManagement accounting refers to the procedure of identifying, measuring, interpreting,communicating financial data or information in the achievement of the business goals andobjectives. It is also referred to us a cost accounting, the major difference between managementaccounting and financial accounting is that information of management accounting helpsmanagers in a company to make effective decisions, on the other hand financial accounting isaimed at providing data or information to the external parties of a company or organization. Theprocess of preparing management reports or accounts provides accurate and timely financial aswell as statistical information required by managers in establishing day to day decisions. Itconsists reports that are developed in order to meet the needs of the management. Managementaccounting systems differs in their applications, each and every system is designed for providingdifferent managerial information on the basis of management needs which helps in makingdecisions. There are various kinds of managing accounting systems which are applied in anorganisation. However, all types of accounting systems help in achieving a common objectiveand assist in analysing, identifying and communicating financial data in an organisation. Thedifferent types of accounting systems are described as below -Cost accounting system– The cost accounting system is a framework applied by anorganisation to analyse the cost of its products to analyse profit, cost control andinventory valuation. Cost accounting is known as the most essential concept in1
management accounting as it provides the analytical tools like marginal costing,budgetary-control, operating costing, standard costing and inventory control.Inventory management– Inventory management refers to the technique of overseeingand controlling the use, ordering and storage of elements which are applied by anorganisation in the production of the goods it offers. There are many functions ofinventory management such as developing purchase order, receiving, adjusting,reallocating and disposing inventory. This management accounting system assist anorganisation to improve company workflow and enhance inventory accuracy (Fullerton,Kennedy and Widener, 2017).Job costing system– The job costing system refers to the system of allocatingproduction costs to the individual batches or item of goods. The job costing system needsaccumulating three types of direct information such as labour overhead and directmaterial.Price optimisation system– It refers to the application of statistical analysis to theorganisation or business in order to determine consumer reaction on different price fortheir products and services.Utilisation of data –Management accounting information provides data impelled lookat how to develop an effective organisation. The accounting data or information helps incalculating day to day expenses such as operating cost, hence collecting, measuring andanalysing this data is essential.Variable costing– As per the Generally accepted accounting principles, every singlecost of manufacturing products should be mentioned and recorded in the books ofaccount in an organisation. It assists in identifying the variable cost of production oroperation which is very essential to be determined n order to maintain an effective flowof finance or money ion a company (Renz and Herman, 2017).P2 Different methods applied for management accounting reportingManagement accounting is very much essential in order to have a look into concept thatthere are many operations which organization need to precede as per the budget and actualexpenditure which business is having. Management accounting focuses on internal data andinformation received through financial accounting. Management accounting is applied forplanning, controlling and making decisions. Managerial accountants depends upon financial2
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