Management Accounting and its Types

MANAGEMENT
ACCOUNTING

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1.Description of management accounting and its types.............................................................3
M1. Benefits of Management accounting....................................................................................4
P2. Analysis of wide range of management accounting reports..................................................5
D1.Way in which management accounting systems and reporting are integrated within
organizational process..................................................................................................................6
TASK 2............................................................................................................................................6
P3. Preparation of income statements as per the costing methods...............................................6
M2. Management accounting techniques to produce financial reporting documents................10
D2. Interpretation of produced income statements....................................................................10
TASK 3..........................................................................................................................................10
P4. Description of limitation and importance of planning tools of budgetary control..............10
M3 Planning tools for preparation and forecasting of budgets..................................................11
TASK 4..........................................................................................................................................12
P5.Comparison of organizations to solve the financial issues with the help of accounting
systems.......................................................................................................................................12
M4. Management accounting to solve the financial issues........................................................13
D3. Planning tools to solve the financial issues.........................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Management accounting is also recognized as managerial accounting that is concerned
with the compilation, evaluation, presentation and distribution of quantitative and qualitative
data for internal clients (Drake, Roulstone and Thornock, 2016). Within this accounting, the
paired data on monetary and anti-monetary elements is being used to generate reports that play
an important part in the efficient judgment-making of executives and board members. In the
present time frame, this accounting is seen as one of the key elements of proper distribution and
use of monetary and non-monetary capital. In the project report a company has been chosen that
is KEF limited company. This company operates in manufacturing industry and located in
United Kingdom. In the project document, the term management accounting is explained in great
detail as well as its various forms of accounting systems and reports In addition, multiple
accounting strategies and planning methods are identified.
MAIN BODY
P1.Description of management accounting and its types.
Management accounting- This is associated with process of collecting financial and non financial
data in order to produce internal reports. These reports help to management department in order
to take right decision of various aspects. This accounting plays a significant role that are as
followings:
 Helps in better decision making- It helps to companies in taking correct decisions on right
time. This becomes possible because it provides necessary data on time to managers on
time when its needed.
 Helps in planning- Another importance of management accounting is that it helps to
companies in making planning of various kinds of aspects in an effective manner.
 Helps in controlling- In addition, this accounting helps to companies in making control of
different types of activities and operations.
Types of MAS:
 Cost accounting system- This accounting system is also known as the costing or value
method for goods. In particular, it can be described as a type of accounting system that is
affiliated with an effective prediction of the cost of goods and services. In essence, this
accounting system is required by companies to ensure to make a better assessment of the
degree of productivity as well as in order to control costs. As in the above-mentioned
business, their executives concentrate on applying this accounting system that keeps
manufacturing costs in line with expectations.

 Stock management system- It is an accounting system that is consistent with the method
of monitoring the records of the inventory which has been ordered, acquired and used in
manufacturing (EBRAHIMI and MOGHADASPOUR, 2015). Under this accounting
system, inventory assessment is carried out using different techniques, such as the last in
the first out, the weighted average etc. It is therefore important for businesses to estimate
the need for product to be manufactured by determining the availability of inventory
volume in factories. As in the aspect of the above-mentioned organization, this
accounting system is applied in order to know the quantitative aspect of the materials
required.
 Job order costing system- This accounting system is characterized as a structured process
for monitoring costs and profit on the basis of ' job ' involved in the processing of any
specific tasks. Essentially, corporations are required to get an estimate of each output unit
or of any product. In the organization mentioned above. This accounting system is
applied by their executives to aid in the measurement of each of the production units,
which contributes to a reasonable price setting.
 Price optimization system- It can be characterized as a method for assessing variations in
demand at different price rates. This accounting system is commonly used by businesses
to adjust the prices of their serviced goods, taking into account how their consumers
would respond to the fixed price model. Essentially, under this framework, businesses are
given the idea of setting prices at a rate that is appropriate to all potential buyers. This is
achieved by examining different external environmental factors, like consumer demand
for products, customer attitude towards client products, etc. It is therefore important for
companies to keep prices at an efficient level in line with market conditions and
consumer approach. In the case of the business mentioned above, they adapt this
accounting system to the determination of prices of their products manufactured. As well
as delivering goods to their consumer segments according to their estimated price point
M1. Benefits of Management accounting.
MAS Benefits
Cost accounting system It is consistent with the method of forecasting operating costs
(Nwogugu, 2015). In the above-mentioned business KEF limited,
this system helps its accounting department to keep the costs
lower and to efficiently distribute monetary resources.
Stock management system Under this accounting system, the volume of available material in
stores is tracked and the production manager is presented with a
report. In the above mentioned business, their production staff
gets benefit from this accounting system for the management of