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Methods in Management Accounting Reporting

   

Added on  2021-02-20

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MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................2MAIN BODY ..................................................................................................................................2TASK 1............................................................................................................................................2P1. Management accounting systems and its requirements:........................................................2P2. Methods in management accounting reporting......................................................................4D1. Management accounting system and reporting integrated with organisational process.......6TASK 2............................................................................................................................................6P3. Preparation of income statements by using absorption and marginal costing......................6M2. Management accounting techniques for preparation of financial reporting documents......8D2. Interpretation of income statements......................................................................................9TASK 3............................................................................................................................................9P4. Advantages and disadvantages of planning tools..................................................................9M3. Various kind of planning tools and their application for preparing and forecasting ofbudget.........................................................................................................................................10TASK 4..........................................................................................................................................10P5. Comparison of organisations to solve the financial issues with the help of accountingsystems.......................................................................................................................................10M4. Management accounting to solve the financial issues........................................................13D3. Planning tools to resolve financial problems so to lead the organisation towardssustainable success.....................................................................................................................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................141

INTRODUCTIONManagement accounting is a field of accounting that is related to identifying, analysing,measuring, interpreting and arranging business information and data in a appropriate manner sothat management of the business can make decision in future (Baird. Jia Hu and Reeve, 2011). Itis defined as a process in which analysing the business cost and operation to prepare the financialreports, records, statement in order to assist to management in decision making process. Toachieve the firm's goal, It is require to assess the financial reports, business operation, coststructure and other relevant issue that may help in future in betterment of the organisation. Thetools of MA is really helpful in the formation of the business strategies and achievement of thefinancial objectives. To better understanding of the management accounting and its system,Oshodi plc business is chosen in order to set up this report. Oshodi plc is fruit juicemanufacturing firm that produce various kind of fruit juices but specialist in JOJO fruit juice.This report is consider the various factors of management accounting such as managementaccounting systems, reports, budgeting tools and techniques, financial issues, planningtechniques to sustain in the future. MAIN BODY TASK 1P1. Management accounting systems and its requirements:Management accounting system (MAS) control the business operation by measuring thebusiness activities regarding cost structure and price for the product. It is a financial process thatrefer to detail research of the financial and non monetary activities that may affect to company'sperformance. Management accounting is a fundamental process that measure the businessefficiency by operating the fundamental tools and techniques of the firm. It evaluates thebusiness performance and apply the strategies planning to control the operational activities of theenterprises. Oshodi plc is using this accounting tools in the firm to better control on thebusiness operations (Baird, Schoch and Chen, 2012).Management accounting system: It is system that is defined as appropriate uses ofbusiness detail and information to achieve the business goal by following the rule and processorof the company. This system help in devising the plan, providing expertise in the reportingsystem and assist the management in formulation of financial activities related to business. It is a2

basic business practice that support to business management in adverse situation of the business.There are antithetic kind of management accounting systems which works to handle the overallmanagerial processes and provide a framework to management that help in futuristic issues.Some of the management accounting systems are defined as follows:Inventory management system (IMS) - As per this method of IMS, It ascertain theavailability of the material at the right time of requirement. It assure the inflow andoutflow of the stock from the warehouses and stores. It is accumulated system of stockthat provides the information related to stock quantity and its availability at the stores orwarehouses. This system further ensure the availability of goods at right time ofmanufacture and supplies. This method is generally uses by the business unit that areinvolved in the manufacturing, stores, bulk selling. They uses this system to access thetags, scan and bar code to handle the stock level of inflow and outflow (Basu, 2012).Oshodi plc uses this method to control the cost of material of JOJO fruit juice to betterflow of the inward goods so they can provide the better services to it customers. Cost accounting system (CAS) – This method of MAS is connected with keeps a detailrecords of cost subject to fabrication the goods and products. It is detailed structure ofcost that is used by the firm to ascertaining the total cost occur during production of thegoods. This system is generally used by the business to controlling the cost activities andevaluation the profitability of the business. The framework of cost accounting system areused by Oshodi plc to determine the correct price of the JOJO fruit juice products. Thiscost model verify the cost of particular product and services with cost of sales. With thehelp of this system of rules, institution can apportion the accurate cost of input such asdirect material, labour and overhead at various level of manufacture. So they can find outthe profitability of product of their offerings. Job costing system (JCS) - It is a system that put together the cost data that is related towith peculiar goods and product. This system of MA is related with allocation of the totalproduction outlay to total unit of manufactured. As per this system, productionexpenditure is generally calculated on the completed projects or tasks. Job costing systemhelps in reckoning the total output costs in a arranged manner by dividing cost in sub partof direct material, labour and other expenses to approximation its actual cost. Oshodi plc3

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