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Tools and Techniques of Management Accounting PDF

   

Added on  2020-12-10

17 Pages5429 Words184 Views
MANAGEMENT ACCOUNTINGSYSTEMS & TECHNIQUES
Tools and Techniques of Management Accounting PDF_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and requirement of different accounting systems..........................1P2 Various reporting methods used in management reporting...................................................5M1 Benefits of management accounting systems and their application with in organisation....7D1 Integration between the management accounting system and management accountingreports..........................................................................................................................................7TASK 2............................................................................................................................................8P3 Calculation of cost using appropriate techniques as marginal and absorption......................8M2 Application of range of management accounting techniques and financial reporting.......10TASK 3..........................................................................................................................................10P4 Advantages and disadvantages of various type of planning tools used in budgetary controlprocess.......................................................................................................................................10M3 implementation off planning tools for preparing and forecasting budgets.........................11D3 Planning tools for accounting respond to solve financial problems....................................11TASK 4..........................................................................................................................................11P5 Implement of management accounting system to respond financial problems withcomparison................................................................................................................................11M4 Evaluation of MA systems subject to respond financial problems....................................14CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15
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INTRODUCTIONManagement accounting has become an essential element to manage and operate thefunctions and operations of business. Effective management and control of operations mainlyhelps in determining the policies and plans for analysing opportunities and risk assessment. Anorganised and well structured management accounting system deals with different type ofuncertainties and plans for better evaluation and control (Nahar and Yaacob, 2011). ItalianContinental Stores food retailer that supply is the chosen organisation to execute themanagement accounting concept.This report is prepared to analyse the management accounting concept and itsrequirements in different organisational context are defined in this report. Profit evaluation byimplementing marginal and absorption costing are considered in this report. Use of variousplanning tools are introduced for effective decision making process and evaluating the businessplans. Implementation of management accounting system in terms of determining the financialproblems and challenges and how the system be able to respond these problems in adequate wayare considered in this report. TASK 1P1 Management accounting and requirement of different accounting systemsManagement AccountingManagement accounting is a process of preparing management reports and provideaccurate accounts on time to help managers for taking day to day and short term decision. Theseinformation may be produced in financial and statistical form. It involves in partnering inmanagement decision making, devising performance management system and planning and itassist the management committed to control the functions of business (Maas, Schaltegger andCrutzen, 2016).Management accounting analyses information and advise strategies for business strategyand drive sustainable business success. It is also considered as managerial accounting. It is usedfor analysing and recording essential transactions to business activities for company and increaseefficiency and productivity. Objectives of management accounting is to assist in planning,organising, motivating, coordinating, controlling, communicating and interpreting financialinformation.1
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Difference between management accounting and financial accounting.Management accountingFinancial accountingThis is an internal part of management andcontrol which is not mandatory for everyorganisation.It is mandatory for every organisation to followrules and regulations of financial accounting. Scope and criteria of management remainshigh in comparison to financial accountingFinancial accounting remains limited up topreparing financial reports and transactions forfinancial reporting.Different type of management accounting systemsJob costing system – This is the system of managing, controlling and operating the costof specific job or cost centre. It reduces complexities while analysing the possibilities andconcepts related to different type of financial problems. Job costing system involves storeinformation about the cost, specific production and service job. For instance a chairmanufacturing organisation has two specific jobs one is modulating and second is finishing job,thi system helps to classify the cost among these specific costs (Quinn, 2014). This informationneed for contract for repay and also require for in order to submit the cost information to acustomer. This information used for assign inventories cost and de-terming the accuracy of acompany's. Mostly job posting need to three type informationDirect material – The job costing system track the cost of materials that are used orscrapped during the course of the job. This system may help to track materials cost of rawfood products and expenses charged for ware house and production area for ItalianContinental Stores. If spare materials returned later to the ware house so cost is subtractfrom the job.Direct labour – Cost of the labour track by the job costing system on a job. If a job isrelate with services direct to labour cost of Italian Continental stores will be countedseparately through this system. Price optimizing system Price optimizing system is a combination of mathematical analysis that provides differentoptions to decide prices for products and services on which customers will respond. Priceoptimization system implemented in different industries industries, banking, retailers, casinos,hotels, car rental, cruise lines and insurance industries. Price optimization system objective is2
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