Role of Management Accounting Systems
Added on 2021-02-20
17 Pages5221 Words51 Views
MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1. Description of management accounting and its types...........................................................3P2. Analysis of wide range of management accounting reports.................................................5M1. Role of management accounting systems. ..........................................................................6D1.Way in which management accounting systems and reporting are integrated withinorganisational process.................................................................................................................7TASK 2............................................................................................................................................7P3. Preparation of income statements as per the costing methods..............................................7M2. Management accounting techniques to produce financial reporting documents...............10D2. Interpretation of produced income statements...................................................................10TASK 3..........................................................................................................................................10P4. Description of limitation and importance of planning tools of budgetary control.............10M3 Planning tools for preparation and forecasting of budgets.................................................12TASK 4..........................................................................................................................................12P5.Comparison of organisations to solve the financial issues with the help of accountingsystems......................................................................................................................................12M4. Management accounting to solve the financial issues.......................................................14D3. Planning tools to solve the financial issues........................................................................14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
INTRODUCTIONThe management accounting is also known by managerial accounting which is alignedwith a procedure of gathering, analysing, interpreting & spreading quantitative and qualitativeinformation to internal users (Drake, Roulstone and Thornock, 2016). Under this accounting, thecombined information of monetary and non monetary aspects is being used in order to producereports that plays a significant role in effective decision making for managers and board ofdirectors. In current time period, this accounting is being seen as one of crucial part for betterallocation and utilisation of monetary & non monetary resources. In the project report, termmanagerial accounting is explained in detailed manner as well as its various types such as costaccounting system, price optimisation system and many more. In addition, multi-pal kind ofaccounting techniques and planning tools are described. For better understanding of thisaccounting in context companies' operations a company is selected that is Feel good drinks co.This company is located at Islington, London in United Kingdom. They are operated in theaspect of production of wide range of fruit juice. By help of this company, importance ofmanagement accounting are in context of decision-making making is mentioned. TASK 1.P1. Description of management accounting and its types.Management accounting is being defined as a process of producing internal reports withhelp of combined information of quantitative and qualitative aspects (EBRAHIMI andMOGHADASPOUR, 2015). These prepared reports are too beneficial for companies in order totake corrective actions and planning. As per the analysis of mean of this accounting, it can beassessed that this is useful only for internal users of companies. It is so because external users ofcompanies can not be benefited by help of prepared reports under this accounting. In the aspectof above company, Feel good drinks company they are implementing different types ofaccounting systems in their operations and functions , some of them are explained below :Price optimisation system- It may be defined as a system of evaluating the variation indemand on different pricing levels. This system of accounting is widely used bycompanies in tailoring prices of their served products in consideration of how theircustomers will react on set price pattern. Basically, under this system companies get an
idea of determining the price at a level which is acceptable to all targeted customers. It isbeing done by analysis of various external environmental factors such as demand ofproducts in market, customers orientation towards companies' products and many more.Hence, it is essential of companies for keeping prices at an effective level as accordanceof market condition and customers' approach. In the case of above chosen company, Feelgood drinks co. they apply this accounting system for setting of prices of theirmanufactured juices. As well as for providing products to their customer segments as pertheir expected pricing level.Cost accounting system- This accounting system is also known as costing or productcosting system (Murthy and Rooney, 2018). In general way, it can be defined as a type ofaccounting system that is associated to effective projection of cost of products andservices. This accounting system is essentially needed by companies for prediction ofcost is to make better analysis of profitability level as well as for controlling of costs. Soas per the above evaluation of this accounting system, this can be find out that it isessential for companies in order to managing and estimating overall expenses of variousoperations. Such as in above respective company , Feel good drinks co. their managersfocuses to implement this accounting system for keeping cost of juice manufacturingunder standards. In addition for tracing the information of each organisational activitiesand functions in descriptive manner and as per it, they try to control costs. Stock management system- It is an accounting system that is aligned with process oftracking record of stock which ordered, purchased and used in production. Under thisaccounting system, the valuation of stock is being done by help of different methods suchas last in first out, weighted average and many more. As well as it is being coordinated byproduction and purchase department of companies. This is so because by help of it theymanage activities related to inward and outward of goods. Thus, it is essential forcompanies in estimating of need of material for production which is being done byevaluating availability of quantity of stock in warehouses. Like in aspect of aboverespective organisation, Feel good drinks co. they apply this accounting system to knowabout qualitative aspect of needed material for juice production which are sugar, fruitsand many more.
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