Research Report on Management Accounting

Management Accounting

Table of Contents
Management Accounting.................................................................................................................1
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
(A) Functions of management accounting..................................................................................3
(B) Different types of management accounting and their usage by departments to improve
their reports.................................................................................................................................5
TASK 2............................................................................................................................................6
Absorption costing......................................................................................................................7
TASK 3..........................................................................................................................................10
Planning tools............................................................................................................................10
(A) Types of budget and their advantages and disadvantages..................................................10
(B) Process of preparing budgets .............................................................................................11
(C)Pricing strategies: ................................................................................................................12
Management accounting to respond to financial problems by using Balance Score Card
method.......................................................................................................................................13
(1) How it can be used to identify and respond to financial problems.....................................14
(2) Improve financial governance and development of effective strategies...........................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Management accounting is the method and technique to maintain the financial records
and statements of the company that help to identify and determine actual performance and
financial capability and skills of the company to invest money in the market and developing
business process. Management accounting help to achieve the decided targets and goals of the
company. Financial statements and records through easy to determine financial capability of the
company and employees are easy to take better and effective decision regarding company.
Management accounting in maintain the records only internal transactions of the business not
mention external transactions or public transactions. There is not require any formate to maintain
the records and prepare the financial statements(Baldvinsdottir, 2010). Imda Tech is the charger
and gadgets company in UK there is not provide financial informations to their employees in the
company so employees are not capable to take decision and not properly understand financial
status and position of the company. So company's mangers are want to provide all financial
information to the employees and provide them financial statements so employees are increase
their understanding level regarding company in the financial terms and take better and effective
decision (Ward, 2012).
TASK 1
(A) Functions of management accounting
 Definitions of management accounting-
Management accounting is the systematic method of managing overall accounting system
of a Imda technology for appropriate estimation of a cost and capital which occurred in the
organization. Basically management accounting is all about controlling and regulating of all the
financial issues happens in the cited enterprise which means it is a effective source of a acquiring
data and information related to finance(Mitchell, 2010). Apart from this management accounting
is all about controlling of a capital invested in the company by analysing all the relevant facts
and figures with the useful data and information by adopting effective techniques and methods.
In other words management accounting is a method of calculating accurate profits and losses by
considering available assets and liability of the cited organization(Nørreklit, 2010). Last but not
the least it is a appropriate method of identifying the losses faced by the organization by
analysing all the relevant factors essential in a management accounting.

Management accounting and financial accounting both are different from each other in
every aspect due to their different role and responsibility towards organization. In fact both are
very much indispensable for proper functioning of a management to control extra and wastage
fund which might be occur in the organization(Bodie, 2013).
Here is the some useful difference in between management accounting and financial
accounting.
Management accounting Financial accounting
Management accounting is the term which
manage overall monetary terms which
occurred in the organization. It means the main
aim of the management accounting is to
provide appropriate information and data to the
organization.
Whereas financial accounting is all about
overall description of a financial statements of
the organization with the help of effective
income statement.
Management accounting is mainly control and
regulate by the managers or accountants
Whereas financial accounting requires a
specialised person and experience persons to
control or regulate all the financial activities.
Decisions of a management accounting is
mainly depend upon the guess or estimation
because most of the managers don't have much
time to calculate accurate numbers.
Whereas financial accounting is very precise
and up to dated because overall cost estimation
and accurate profit is very indispensable to
know.
Management accounting don't need to analyse
past data because managers are take decision
on the bases of present scenario
Whereas decision of financial accounting is
taken by considering all the past data and
information for effective and useful decision
(Cinquini and Tenucci, 2010).
 Importance of management accounting information as a decision making tool for
department managers
Management accounting is very much important and plays a very vital role in the
organization while decision making process for mangers because it provides effective data and
accurate information which might be very useful. Decision making is a very big responsibility
because all the activities are depended on the decision of managers so management accounting