Managerial Accounting System: Techniques, Relevance and Functionality

Managerial Accounting
System
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ABSTRACT
Management accounting can be defined as a technique that helps an organisation to recognize
their potential profits. They are the main focus to complete their work within a minimum time
with more efficiency and effectiveness. The main agenda to implement management accounting
in the organisation is to earn more amounts of profits. It is based on the internal departments and
variance cost analysis. Key activities of management accounting relate to budgeting, financial
accounting, cost analysis and various others system and procedures that work effectively for the
organization. This project is based on the perspective of Microsoft which is providing its IT
services among the overall world (Spraakman and et. al, 2015). The main purpose of this report
is to understand the relevance and functionality of the accounting system of management which
is used by the multi-national organisation to complete their work.
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Contents
Managerial Accounting System.......................................................................................................1
ABSTRACT.....................................................................................................................................3
Main Body.......................................................................................................................................3
Identification of the three example of management accounting techniques from the case...3
Relation of management accounting system within the organisation....................................4
Comparing and contrasting various activities of the organisation to understand the uses of
management accounting system.............................................................................................6
Conclusion that are related with management accounting system to understand business
environment............................................................................................................................8
Specific outcomes that are learned from the above articles to understand management
accounting system..................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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Main Body
1. Identification of the three example of management accounting techniques from the case
Management accounting method is implemented by every organisation among the overall world.
This determines it assist an organisation to increase the performance of their internal department
of a corporation. The main function of the management accounting system is to analyse the
profits of a business by depicting the cost of their product to sale them in the market. Moreover,
it also helps a firm to analyse various management techniques which helps them to considers all
profits that are provided by an organisation to its employees (Mirzaey, Jamshidi, and Hojatpour,
2017). As per the author of this article, it is predicted that there are different management
accounting techniques are presented in the industry. Like (JIT) Just in Time, (ABC) Activity-
based costing, (TQM) Total quality management, (VCA) Value chain analysis and many more.
This technique helps the firm to predict the insights that are related to the cost of the
management of an organisation. Some of them are explained below:
ABC Analysis- This approach is considered with the purpose of classifying the inventory on the
base of their consumption. This approach helps the management to identify the actual value of
their item which is consumed in a specific period. ABC approach is based on the principle of
Pareto in which management uses different matters and the implication of approach to fulfil
organization purposes. It is seen in the approach of ABC classification of the tools is done on
various basis that is divided from the highest consumption to the lowest consumption. This
approach work as the highest turnover inventory is classified with the basis of A whereas the
inventories that are interclass are conducted as the B part. Whereas on the other side the product
or service of the organization that is low in consumption is classified based on C. Along with this
it is seen that the performance of a business is not constant. It determines that there are several
up and downs are present in the market which impacts the performance of the business. Hence, it
is beneficial because it improves the performance of an organization on an overall basis. Further,
in last with the help of this article, it is seen that this tool helps the firm to check the volume of
their product rapidly (Melnyk and et. al, 2014). So, it is easy for them to analyse the number of
products which are sold in the market along with those that remain in the stock for a longer
period.
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