Management Accounting Research Trends
Added on 2020-02-03
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Management Accounting
Table of ContentsINTRODUCTION......................................................................................................................3P1. Explaining management accounting and give the essential requirement of differenttypes of management accounting system...............................................................................3P2 Explaining different methods which are used for management accounting reporting.....5P3 Calculating cost by using marginal and absorption system..............................................5P4 Explaining the advantage and disadvantages of different types of planning tools usedfor the budgetary control........................................................................................................6P5 Stating the management accounting system that is used to resolve financial problems...9CONCLUSION........................................................................................................................12REFERENCES.........................................................................................................................13
INTRODUCTIONOver the years, with the rising competitive challenges and market uncertainties, now-a-days, managers started playing an important role in the business success. Managers gatherwide range of information to assess & examine the organizational performance, sales records,cost sheets, financial reports and others for making suitable strategies & excellent growthplans. This assignment will focus on the small sized business, Unicorn which is a retailorganization and delivering retail services to the consumers across UK. The presentassignment will emphasize upon different types of management accounting reporting andsystems, budgetary tools and absorption and marginal costing methods for figuring out thecost of production, cost of goods sold and ascertainment of yield as well. Lastly, it willpresents analysis of various tools like ratio analysis, capital budgeting techniques and othersfor the making appropriate plans for the betterment in future. P1. Explaining management accounting and give the essential requirement of different typesof management accounting systemManagement accounting is an special branch of accounting, inwhich, accounting, numerical, statistical and financial information arecollected and thereafter, it is provided to the higher authority of theUnicorn which includes executives, policy-makers, directors, Certifiedfinancial officer, Certified Executive Officer and others for creatingbusiness policies & decision-making. As per the IMA, it is defined as aprofession which incorporates participating in devising plans, system forperformance management, decision-making, expertise reporting andimplementing control to facilitate the top authority in successful executionof the designed strategies (Renz, 2016). It is concerned with getting usefuland highly important financial information for assessing the businessperformance using distinctive tools and techniques i.e. ratio analysis,working capital decisions, investment analysis, trend analysis, fund flowand cash flow analysis & others. In other words, it can be defined as aform of accounting which enable and assist Unicorn’s managerial team toconduct the business more efficiently and effectively. MA includes variousfunctions such as forecasting, policy formulation, strategies development,
improvement in organizational efficiency and others. Risk evaluation,resource allocation, performance measurement and analysis are the keyobjectives of the management accounting. There are multiple of management accounting systems (MAS) whichcan be employed by the Unicorn to give enough & adequate variety ofinformation to the managers for making better planning and decisions(Cooper, Ezzamel and Qu, 2017). For devising strategies and decision-makingpurpose, managers need accurate, reliable & prominent information toanalyze the performance & comparison with the target. The main goal ofMAS is to smoothen the workflow & regular processes to make it moreeffective & efficient for the sustainable growth, discussed here as under:Cost Accounting System: It is also termed as product costingsystem which provides a framework that firms can utilize to determine thetotal costs (TC) of Unicorn’s production, analyze profitability and helpful inimplementing better control over cost (Quattrone, 2016). Cost estimation andanalysis is of great significance for ensuring profitable operation bygenerating higher sales revenues over cost incurred. At the same time,CAS also provide great assistance to the corporation in valuing theinventory of material, work-in-progress (WIP) and closing inventory aswell. Job costing system: This system determines costs ofmanufacturing for every job work performed by Unicorn by accumulatingthe material, labor and direct and indirect overheads. It is important forthe firm, so that, managers can quote a right price from the customers inorder to cover all the expenditures incurred and gain good return (Malmi,2016). Price-optimization: Unsurprisingly, it is a very important oressential system which is helpful for the managers to have good controlover the pricing decisions for different types of products & services. Thissystem focuses on demand modeling, what if tools and others to figureout the impact of goods prices over the sales and profitability, thus, assist
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