Management Accounting and Essential Requirements of Various Types of Management Accounting System

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Management accounting and essential requirements of various types of management
accounting system........................................................................................................................3
TASK 2...........................................................................................................................................5
P2. Various methods of management accounting reporting........................................................5
TASK 3............................................................................................................................................6
P3. Calculation of costs................................................................................................................6
TASK 4............................................................................................................................................1
P4 Explanation of advantages and disadvantages for various types of planning tools which is
utilised for budgetary control:......................................................................................................1
TASK 5............................................................................................................................................2
P5 Comparing how businesses are adopting systems of management accounting for
responding to financial problems:................................................................................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................1

INTRODUCTION
Management accounting are techniques which supports business plan, control and
examine performances of concern entities. It provides various ways by which managers can
manage finances within an entity in order to enhance their business performance (Anderson,
2017). Its practices are are made by internal controllers and for the internal controllers to achieve
desired goals. In this report we are going to discuss about Connect Catering Services, which is a
run catering service and family owed business. They are from Oxfordshire and planning to
enlarge their business by selling home made pizzas to superstores in this regard they should use
various management accounting systems to do so.
This report covers essential requirements of various types management accounting
systems, various methods that are used in management accounting reporting, advantages and
disadvantages of different tools of planning. Further this includes estimation of cost with the use
of proper techniques of cost analysis in order to prepare income statement by using absorption
and marginal cost. Tools of budgetary control, their advantages and disadvantage are also
discussed in this report.
TASK 1
P1. Management accounting and essential requirements of various types of management
accounting system
Management accounting refers to utilisation of accounting informations in order to solve
organisational problems and to take scientific decisions on their basis. They derive their solutions
from budgeting, variance analysis, BEP, and cost-volume-profit(Christ and Burritt, 2017).
Management accounting systems comprises of all those internal systems that an entity uses to
estimate and evaluate its procedures to manage organisation. Connect Catering Services with
these system can manage their internal affairs without any disruption. For this they should go for
following systems-
Price Optimisation- Organisations get actual cost of each transaction of every goods
they sale with the help of this system (Fleischman and Parker, 2017). They get full knowledge of
market conditions such what customer want?, how much they are ready to pay?, and how will
customers react to any change in price of goods. Connect Catering services can generate full
knowledge about customers purchasing power and their taste which will help them in expansion.

Essential Requirements:
 This system helps companies to find and maintain their loyal customers and motivate
them to attract others to grow market share. Company with help of this system can
determine its potential buyers that will lead to in knowing accurate demand level.
 Entities can change prices of their goods and services according to the current trends of
market and help them to sustain for long period of time. In this connection Connect
Catering services can switch to different rates according to competition and customers
willingness to pay. This will create boom for their pizza's in market.
Inventory Management- In this system managers of enterprises find out the actual
amount of stock that they hold or have any shortfall in it (Georg and Justesen, 2017). This
system provides proper planning for future in order to meet upcoming requirements of
customers. Connect Catering Services can easily figure out its stock level and can keep sufficient
inventory in their warehouses.
Essential Requirements:
 Enterprises can easily keep a track on their goods and services. Connect Catering
Services in this regard can keep an eye on correct amount of stock that they require to
make their pizzas in meeting their demand.
 Stock management is done with the help of technology and software which leads to less
error and save time. Company can create clarity in their working and work accordingly to
maintain stock.
Cost Accounting System- With this system organisations can incur actual cost of
production so that they can earn more profit. This cost generation method can make thinks easy
in order to improve quality and quantityn (Tucker, 2019). Connect Catering Services can easily
figure out the actual cost they have derive in making their pizzas.
Essential Requirements:
 This system provides accuracy in order to generate correct value of product. Connect
Catering Services can get actual cost and make profit margin accordingly.
 It helps in finding competition level in market and strategies to beat competition level in
market. Company can consider competitors cost and than can make their strategies
accordingly in order to generate profit by selling more and more pizzas.