Explanation of Management Accounting and Planning Tools for Budgetary Control

Management
Accounting

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK1.............................................................................................................................................4
P.1. Give explanation of management accounting & give the essential requirement of
different management accounting system types.........................................................................4
P.2. Provide explanation of methods that were used for management accounting purpose? ....7
M.1.Merits of management accounting system and their application in context of organisation
are evaluate?................................................................................................................................7
TASK 2............................................................................................................................................8
P.3. Explain different type of planning tools and their advantage and disadvantage used for
budgetory control?......................................................................................................................8
M.2. Use of suitable technique to produce financial reporting document ?.............................11
TASK 3..........................................................................................................................................11
P.4 Explain advantage and disadvantage of different types of planning tools used for
budgetary control? ....................................................................................................................11
M.3. Use of different planning tools and their applications for preparing & forecasting
budgets are analyse?..................................................................................................................13
TASK 4..........................................................................................................................................13
P.5 By making comparision describe how company adapt management accounting system to
respond financial problems?.....................................................................................................13
M.4. Analyse how responding to management accounting, financial problems, can lead
organisation to sustainable success.?........................................................................................14
CONCLUSION..............................................................................................................................14
........................................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Management accounting is the type of process where reports, projects and assignments
are prepare for operations of business. It supports management team at the time of taking short as
well as long term decisions. Management accounting helps the business to pursue its goals
through measuring, identifying, interpreting and by communicating important informations to
smart managers. The organisation that was choosen in this project are Capital Joinery Ltd. It
deals in windows, doors, stairs in West central and South London. It provides huge variety and
designs in the respective industry. It is the small sized organisation that is established in United
Kingdom. In the report various topics are discuss as these are explanation of management
accounting and their essential needs of various management accounting system. Explanation of
different methods for the purpose of reporting of management accounting. Calculation of cost is
to be perform by using cost analysis techniques to prepare an income statement with marginal &
absorption costing in the report. To budgetary control various advantage & advantage of
various types of planning tool are explain in the assignment. By making comparison it is to be
describe that how the organisation are adapting management accounting system to respond to
financial issues (Ajili, 2018)
TASK1
P.1. Give explanation of management accounting & give the essential requirement of different
management accounting system types.
Management Accounting is the branch of accounting that make attention on many terms
related to identification, measurement , analysis etc. and it also interpret important information
related to accounting as the above mentioned activities help the management team to take
decision for the company so that business operation can be control in efficient & effective
manner.
Management accounting system covers an internal system that the organisation use to do
measurement and evaluation of process for purpose of management of company. Various
important information related to finance are given to outside people like agents, creditors,
investors, debenture holder, guarantor, shareholders, merchant bankers, etc. by internal
management of organisation. It can also be define as internal confidential reports which supports
managers at decision making time (Jeong, 2018)

Difference between finance and management accounting.
In financial accounting various standards must confirm in organisation for example
Generally accepted accounting principles.
Certain standards must confirm in financial accounting like Generally Accepted
Accounting Principles ( GAAP ). In public companies financial statements are prepare on the
basis of GAAP.
On the other hand Managerial accounting is not to use for externals persons like merchant
banker, shareholders, guarantor. According to internal users requirement the changes can be
made in respective accounting at regular interval of time. As manager of Capital Joinery Ltd.
Evaluate and analyse all the relevant financial information and HR department manager observe
the salaries graph over a period of time.
Examples of various types of management accounting system are describe in the below
mentioned paragraphs as these are mentioned as follows.
Cost accounting system: In this information related to costing is used at the time of
production. It is generally adopted by industry who manufactures the product. For every business
it is necessary to estimate cost especially when profit ascertainment is perform in the
organisation. It is beneficial at the time when we estimate value of raw material, Work in
progress, value of semi finished product and to calculate finished value as these information help
in financial statement preparation of the company (Kaufinger, 2020)
Benefits:
 Efficiency can easily be measure and improved:
 Provide information for proper planning:
 helps to take decisions regarding labour and machines:
 Help to detect reasons for looses:
Job costing system: It is differ for every items as it is the method of costing used to
determine particular costing of the job as these specific work is done by workers as per
requirement and specification given by customers. In this costing based information is collected.
It is necessarily be require to give detailed information of cost to customers where the
reimbursement of costing is done (Kimmel, 2018)
Benefits:
 Profit earned for every job is separately known in this method of costing.