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Methods of Management Accounting Reporting - Doc

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MANAGEMENTACCOUNTANTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and requirements of different kinds of accounting systems..........1P2 Methods used for management accounting reporting............................................................3TASK 2............................................................................................................................................5P3 Techniques of cost analysis to prepare an income statement using marginal and absorptioncosts.............................................................................................................................................5TASK 3............................................................................................................................................8P4 Advantages and disadvantages of different planning tools used for budgetary control........8TASK 4.........................................................................................................................................11P5 Comparison on how organisations are adapting management accounting systems............11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONManagement accounting is a process that assist firms in developing and keepingmanagerial records as it will further assist company in taking appropriate decision for itsbusiness operations. Books under which all data and records are kept are further used bycompanies in gaining trust of stakeholders, investors, creditors etc. OAK Cash and Carry is oneof the leading company in United Kingdom which has less than 50 number of employee. Presentreport includes demonstration and understanding of management accounting system. Other thanthis, calculation of cost with the help of appropriate techniques related to cost analysis isincluded in this in order to prepare an income statement with the help of marginal and absorptioncosts (DRURY, 2013). Different type of tools and management accounting system forresponding financial problems is also discussed in further part which help in analysing positionof business at marketplace.
TASK 1P1 Management accounting and requirements of different kinds of accounting systemsManagement accounting can be defined as a process of preparing accounts and reportswhich give financial and statistical information in an accurate manner. It includes informationabout day-to-day transactions and short term decisions. Along with this, it can also stated asrepresentation of accounting information by which managers of a company can formulatepolicies and strategies for conducting activities as well as take decisions on regular manner.Moreover, it is based on financial and cost accounting with main objectives are measuringperformance, assessing risks, allocating resources and more.OAK Cash and Carry deals in retail market and deliver groceries as well as home utilityproducts to customers of UK on affordable price rates (Springer.Arroyo, 2012) on affordableprice rates (Springer.Arroyo, 2012). This organisation use management accounting systems inorder to take important decision related to utilise financial resources for day-to-day operations.Types of accounting systems and their needs:System of management and accounting helps a firm in organising and controlling overallactivities of business by determining different costs of the same. It also varies as per applicationand assist in making proper decisions (Tools of management and accounting, 2018). There arevarious managing accounting systems are available like inventory management, priceoptimisation, job costing system and more. Some of them are stated as below:Cost accounting system:It is considered as framework which applied by managementof a company for inventory valuation by approximating costs of products. In thissystem, allocation of cost is generally based either on activity or traditional costing.Managers of OAK Cash and Carry use this system to capture production cost byweighing input and fixed costs such as capital equipment depreciation. Along with this,costs accounting system helps in discovering all costs related with distributing,marketing, production, selling and more through which employers can assume futureprofitability ratio. As OAK Cash and Carry is engaged with many functions likemanufacturing and delivering best quality of products which includes much expenses.Therefore, with the help of cost accounting system, its managers can control allexpenses. Along with this, it also includes two types of cost accounting that are JobCosting and Process Costing. In job costings, managers can track actual cost of product
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