Solved Management Accounting : Assignment PDF

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
Role of Management Accounting in an organisation..................................................................1
LO1..................................................................................................................................................4
P2 Methods of Management accounting reporting......................................................................4
LO2..................................................................................................................................................6
P3 Calculating costs using appropriate cost accounting techniques............................................6
......................................................................................................................................................7
LO4..................................................................................................................................................9
P4 Explaining the advantages and disadvantages of different types of planning tools used in
budgetary control.........................................................................................................................9
P5 Compare howorganizations are adapting management accounting systems to respond to
financial problems........................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
In management accounting or managerial accounting, managers use the provisions of
accounting information in order to better inform themselves before they decide matters within
their organizations, which aids their management and performance of control functions.
Management accounting helps the organization in managing the financial aspects accurately and
efficiently. Management accounting is one of the most reliable concept which can be used by
firm and organization. It aids managers to perform better the financial task. It helps managers in
decision making process and achieving goals and objectives(Ax and Greve, 2017). Report will
highlight basic concepts of management accounting. It will also lay emphasis on methods of
budgeting.
LO1
Role of Management Accounting in an organisation.
Management accounting in an organisation is for supporting the competitive decisions
making through collection, processing and communication of information that will help
management in planning controlling and elevating business processes & company strategies. For
surviving in competitive market, related to technological advancement , are required to use
advance methods for working over continuous improvement of quality control and reducing cost
of products. In these circumstances organisations are shifting towards modern information
system avoiding traditional system with long term move towards management accounting. Tools
of management accounting are following growing trend over recent years. For meeting the
economical advancement of companies management accounting has emerged with new
techniques and and systems helping the Unilever to manage its business. Management is helping
company to meet the needs of modern times business. New systems and techniques has helped
companies to manage its accounting needs and requirements (Bobryshev and et.al., 2015).
Business cannot run effectively without management accounting it includes various costing
method that companies adopt as per their businesses.
Types of Management Accounting System
Cost accounting system
Cost accounting systems refers to framework which is used by companies for estimating costs of
its products for analysing profitability , cost control and inventory valuation. It is critical to
estimate product's correct costs in profitable operations. Company must have knowledge about
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each product that is prepared by company which product is making profits and which are costing
much to company. This can be achieved when accurate cost of each product has been estimated
by company. Unilever is estimating cost of it closing inventory using cost accounting method.
Cost accounting system helps management of company to make business decisions. Corporate
accounting does not have to follow set standards that are flexible in meeting the management
needs unlike financial accounting that is required to provide financial information to external
users. Cost accounting helps Unilever in considering input costs of production that are both fixed
and variable.
Advantages
 Cost accounting system help managers of Unilever to eliminate losses, wastes and
inefficiencies through standards. Standards set by company helps to reduce cost of
product.
 Unilever is able to identify reason for increase or decrease in in profit. It help managers
to take remedial actions for maintaining the profitability of company.
 When information of cost is available management is able to make decisions about
whether to purchase or not products from open market. Record of every product is
available with company in costing records (Bromwich and Scapens, 2016).
 Cost accounting is appreciated by managers of Unilever as it is adaptable, can be tinkered
and implemented as per changing requirements of business. Cost accounting is used only
for accounting for internal purposes. Cost accounting is three dimensional which are accounting, calculations and reporting
that could be manipulated by different angles. It helps Unilever by guiding in price
determination, resource allocations and raising capital for meeting the production
requirement.
Disadvantages
 Cost accounting department are available with only cost records where management is
making decisions for future that could be different as costs in previous yaear may not be
same as in succeeding year.
 Accurate cost can be ascertained when only when full capacity is utlized it is not useful
for Unilever when there is partial utilization of capacity.
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