Report on the Dynamics of Management Accounting
Submission front sheet for the Management Accounting assignment at Mont Rose College.
15 Pages4193 Words124 Views
Added on 2020-06-06
Report on the Dynamics of Management Accounting
Submission front sheet for the Management Accounting assignment at Mont Rose College.
Added on 2020-06-06
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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and requirement of different type of management accountingsystem..........................................................................................................................................1P2 Different methods used in management accounting reporting..............................................3M1 Pros of management accounting system...............................................................................4D1 Management accounting system and management accounting reporting.............................5P3 Marginal and absorption cost techniques to calculate profit.................................................5M2 Range of management accounting techniques subject to financial reporting documents....8D2 Financial reports and interpretation of data for complex business activities........................9TASK 2............................................................................................................................................9P4 Disadvantages and advantages of different type of planning tool for budgetary control......9M3 Use of planning tools and their application subject to making budgets.............................11P5 How organisations are adapting management accounting system.......................................11M4 importance of management accounting to solving financial problems..............................12D3 How planning tools are implemented to solve the financial problems...............................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONManagerial accounting is the form considered as management accounting in business ororganisational culture. The objective of this report is explain the dynamics of managementaccounting, implementations of fundamentals management accounting in large businessinfrastructures. Meaning of management accounting is explained with various type ofmanagement accounting systems. Different type of management accounting reporting andmethods are defined in this report. Importance and advantages of accounting tools in decisionmaking and planning highlighted. Pros and cons in respect of various type of managementaccounting tools are used for budgetary control process. Scope of cost accounting system definedin this report in manufacturing industries. Absorption and marginal cost techniques are defined toascertain the amount of profit. Different type of planning tools are defined to control the cost andforecasting the plans for better forecasting and planning. How organisations are adaptingmanagement accounting systems and leading towards sustainable success. Issues and conflictsare described subject to management accounting and financial reporting.TASK 1P1 Management accounting and requirement of different type of management accounting systemCovered in PPTP2 Different methods used in management accounting reportingCovered in PPTM1 Pros of management accounting systemManagement accounting system plays vital roles in accomplishing the goals andobjectives of organisation (Debnath, Bose and Dhalla, 2011). Reducing the cost of products,improve the levels of management and operations, effectiveness in core business activities,proper supervision and preparing accurate financial management reports are the major areaswhere management accounting is used. Management accounting concepts helps in businessdecisions and strategic planning to achieve desired goals of organisation.D1 Management accounting system and management accounting reportingAccounting and reporting are the two sections used in business organisation. Accountingis the process which take place before reporting process (Dekker, 2016). Accounts aremaintained by accountants for the financial year and then reporting work is done in the end ofyear. Accounting is a regular process whereas accounting reporting generally done once in a1
year. Management accounting are the part of managerial or accounting reporting andmanagement reporting is the part of decision making.P3 Marginal and absorption cost techniques to calculate profitCost techniques are used to ascertain the cost of products and evaluating the amount ofprofit for a particular time duration. There are various type of cost techniques are used in generalbusiness context. Marginal costingthis costing techniques is used in factory, manufacturing industries and product and unitmaking companies. This cost accounting system contains all the variable expanses as directmaterial, labour, factory expenses and overheads to calculate the cost of product andprofitability. Absorption costingThis costing techniques is widely used in manufacturing and production organisation.This cost technique contains both the variable and fixed expenses in respect of evaluating cost ofproducts and profitability. These are the cost techniques used in the industries in respect ofascertain the variable and fixed cost of products. Direct and indirect expenses, fixed overheads inrespect of distributing the cost of operation and process to write off for upcoming years. Uniform costingThis costing technique is used to ascertain the cost of product in same type of industriesand firms (Harris and Mongiello, 2012). This technique used in inter-firm and comparisonbetween same type of business organisations. This technique is used to decide the price, costcontrol and relaxation in tax and charges levied by government. Standard costingthis is one of the cost computing technique used to compare actual budget and standardbudget of production and sales. Various type of rules are used to calculate the variances anddifferences in actual and standard budgets (Grafton, Lillis and Mahama, 2011). This techniquesalso plays significant role in decision making and strategic planning process.Budgetary controlMaking budgets, forecasting future events and transactions are prepared in thistechniques. Comparison of actual budget with standard budget to find out variances thistechnique remain very useful. 2
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