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(PDF) Management Accounting: Approaches, Techniques

   

Added on  2021-02-20

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Managerial Accounting
(PDF) Management Accounting: Approaches, Techniques_1

Table of ContentsINTRODUCTION....................................................................................................................3MAIN BODY...........................................................................................................................3Ques. 1. Different types of management accounting techniques used by the company..3Ques 2. Explanation..........................................................................................................41. Relevance of Management Accounting System in the business organisation withexamples............................................................................................................................42. Comparing management accounting systems used by different companies................5Ques. 3. Findings about relevance of Management Accounting System in today’scompetitive as well as uncertain business environment...................................................7Ques. 4. Outcomes ...........................................................................................................8CONCLUSION.....................................................................................................................10REFERENCES.....................................................................................................................11
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INTRODUCTIONManagerial accounting is defined as a term related with the process of collecting,measuring, evaluating, identifying, analysing, interpreting relevant and crucial informationabout a particular phenomenon. By making proper explanation of data gathered, it is verymuch important to communicate it to its end users for assisting in their decision makingprocess. The present report will define about different types of management accountingmethods which has been adopted in by the company. Furthermore, explanation relatedrelevance of Management accounting system in context of contemporary businessoperations will be made. Also, report will focus on making comparison in betweencompanies pertaining to management accounting systems used by them. At last, it willmake emphasis on identification of outcomes from research conducted. MAIN BODYQues. 1. Different types of management accounting techniques used by the company.Management accounting techniques refers to the procedure, methods and systemwhich has been used by the management of the company in performing and managing ofaccounting as well as financial operations. By making use of proper and effectivemanagement accounting tools, it assists the company in preparation as well aspresentation of better and meaningful information to its end users. Following are thetechniques which are used by the case company:1.Activity Based Costing (ABC) – A method which supports company in monitoringand tracking amount related to overhead cost and its allocation to defined objects.This method helps company in making focus on identification of profitable businessactivities, production processes with the help of which a particular job can beprocessed (Kaplan and Atkinson, 2015). Such technique assigns overhead cost toprocesses and product that yields or consume such amount of cost. For example –It has been estimated by the management of the company that purchase of 10000pieces of material will require overhead cost expenses of $20000 for such particulartime period. 2.Total Quality Management (TQM) – A process of continual nature engaged inprocesses related to detection, minimization of errors as occurring while conductingbusiness operations such as manufacturing, management function in field of supplychain operations, focusing on making improvement in customer experiences,
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imparting of proper and updated business training to its employees. By adoptingthis technique, it helps company in making improvement in its business processes,maximizing customer satisfaction and business profit thereby reducing overallbusiness cost structure. For example – Reducing cost and development cycleduration by making more focus on improving quality aspects of business,3.Balance Scorecard (BSC) – One of the performance metric which helps companyin identifying its own employees weakness and strength and measures to beundertaken by the company for overcoming such weaknesses (Hopper and Bui,2016). It assesses standards and norms as followed by profit making companiesand thus helps company in making improvement its business operations. Forinstance – Monitoring tool used by company as indicator of performance.Ques 2. Explanation1. Relevance of Management Accounting System in the business organisation withexamples.With the help of management accounting system, every business organisation canformulate its business plans and strategies in line with its business aims and objectives. Byadopting sound and proper management accounting technique, it helps company inpreparation of its final and managerial accounts. Following are the relevant aspects ofmanagement accounting systems for business organisation:1.It acts an instrument for smooth functioning of business operations with the help ofimplementation of sound management accounting system pertaining to therequirements of situation.2.It assists in enhancing process of crucial decision making thereby facilitating properflow of information essential for decision making process (Bogsnes, 2016).3.By adopting relevant technique of management accounting in the business, it helpsthe company in bringing improvement in its overall business as well as operationalefficiency thereby increasing its profitability aspects.4.Furthermore, it ensures that both the business planning, strategies are made withproper efficiency and provides firm decision-making process along with theachievement assisting company with creating positive impact on improvingoperational excellence. 5.By taking into consideration better management accounting tools, it helps companyin gaining competitive advantages. Also, it made emphasis more on the control
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