Different MA Systems and Methods of MA Reporting

UNIT-5 MANAGEMENT
ACCOUNTI NG

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P-1 Critically analysing different MA systems............................................................................1
P2 Different methods of MA reporting........................................................................................3
TASK-2............................................................................................................................................4
2a..................................................................................................................................................5
2 b.....................................................................................................................................................5
2 c.....................................................................................................................................................6
TASK-3............................................................................................................................................7
P-4: Advantages and disadvantages of various planning tools used in the budgetary control....7
M-3...............................................................................................................................................9
P-5: Adaptation of the management accounting systems to respond to the financial problems..9
M-4.............................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Management accounting (MA) is the accounting system which deals with the managing
the business decision of an organization. Under this, the information is gathered from the
accounting team and is further analysed by the internal management team based upon which the
final decision is being made. In this report, Connect Catering services is taken as an organization
which is small and medium-sized business running in Oxfordshire. This report presents a critical
evaluation of the different management accounting system and the methods used for the purpose
of accounting reporting. Along with that it involves the making use of the MA techniques for
analysing the cost and determining the pros and cons of planning tools for the purpose of
budgetary control. It also covers comparing the ways the MA system being implemented by the
organizations.
TASK 1
P-1 Critically analysing different MA systems
Management accounting basically accounts for the application of the different types of
the professional skills and knowledge in regard to the preparation of the financial and accounting
information. This is needed to be done in such a way that it will assist the internal managerial
team in the formulation of the policies and the planning strategies of the firm.
Different types of MA system
Cost accounting system
The cost accounting system is the process or the framework through which the firms can
estimate their product related cost and expenses in order to carry out the profitability analysis
and in exercising the cost control techniques (Abdusalomova, 2019). By making use of this
system, Connect Catering services can effectively arrange the records and determine the suitable
investment allocation.
Benefits
 It helps in eliminating the wastage of resources and inefficiencies by fixing the standards.
 This system assist in carrying out the cost reduction process through the way of
implementing new and improved approaches of production.
 It helps in determining the profitability related to the product so that remedial action can
be undertaken.
Essential requirements
1

This system requires highly competent personnels who are having knowledge and
relevant skills in carrying out cost accounting.
Applicability
This is mainly applicable to the organizations which are involved in the production or
manufacturing.
Inventory management system
This system is implemented with the purpose of effectively determining and managing
the inventory of the organization. It is the combination of the procedures and the processes which
helps in effectively handling the movement of the inventory and maintaining the required stock
level. It can be utilized by the Connect Catering services in order to manage its inventory
appropriately.
Benefits
 It helps in reducing the risk of overselling through the way of synchronizing the
inventory.
 This also supports in overcoming the situation of stock out or the excess stock.
 Better understanding of demand and availability helps in meeting higher inventory
turnover.
Essential requirements
It requires effectively tracking of the inventory and interpreting the same which can be
met by the professional making knowledge pertaining to inventory management.
Applicability
This MA system is applicable for the organization which are needed to handling bulk of
products or material as inventory either for production or supply.
Job costing system
This accounts for accumulating all the relevant information pertaining to the specific
production or the job. This can be further used for submitting the information to the customer
under the contract. The information gathered can be used for assigning the inventoriable cost or
the manufacturing the goods (TRUHACHEV, KOSTYUKOVA and BOBRISHEV, 2017).
Therefore, if implemented by Connect Catering services then it can be able to effectively manage
the job pertaining to the specific product or services.
Benefits
2