Management Accounting Systems & Techniques

Management Accounting Systems &
Techniques

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Brief explanation regarding meaning of management accounting and requirement of
different accounting system.........................................................................................................3
P2 Explanation of different modules use for management accounting system...........................4
M1 Benefits of using different kinds of managerial accounting system.....................................5
D1 Evaluation of relevance of integration of management accounting system with managerial
reports..........................................................................................................................................6
TASK 2............................................................................................................................................7
P3Calcluation of cost by using managerial accounting technique..............................................7
M2Breif description regarding production of finance report.....................................................10
D2Fiananacil report which help in applying accurate data........................................................10
TASK 3..........................................................................................................................................10
P4Explanation of advantage & disadvantage of various types of planning tools......................10
M3Aanayisis use of planning tools for prepare budget.............................................................12
TASK 4..........................................................................................................................................12
P5 Comparison of different management accounting tools how they use for solve financial
problems.....................................................................................................................................12
M4 Use of management accounting tools to solve financial problem.......................................15
D3 Evaluation how planning tools are used to solve financial problems.................................15
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting is part of accounting approach which organizations use for
analysing, recording managing and controlling their accounting information in systematic way.
Which useful in take essential business decision by representing accounting information as per
the norms of accounting standard. To understand this concept Capital joinery limited has been
taken. It is medium size organization. This report has been define use of different types of
management accounting system which useful in decision making. Relevance of management
account report and technique use for determine cost as well as usefulness of planning tool for
recognize issue arising of financial problem and use of benchmarking, balance scorecard through
which they can resolve problem. All theses information has been describe in systematic manner.
TASK 1
P1 Brief explanation regarding meaning of management accounting and requirement of different
accounting system.
Management accounting: This term is combination of two essential norms of business.
The first one is management , which refer as an art of getting things and activities done by other
personal by influencing them. The other one is accounting which means process of identifying ,
analysing, recording and presenting data in effective way. Management accounting is
combination of theses word which means managing accounting record in a way which help in
influencing people and took decision by representing accounting data in systematic manner.
There are various system has been used while applying management accounting approach
following are define below
 Cost accounting system: It is consider as essential system of management accounting
approach. There are various technique has been used by organizations through which
they can able to find out value of cost as well as profit. In context with Capital joinery
limited, they used cost accounting system through which they can manage all the relevant
cost, of raw materiel, process costing and cost incurred for distributing products.
Manager of cost accounting use this system to determine cost required for manufacturing
their business products which include, furniture, door, table etc (Quattrone, 2016).

 Price optimization system: This system is used for determine price of relevant product.
Success of business entity depend on the strategy they use for select particular price.
Price skimming, penetration, premium and price formulation of particular rate all these
are strategies regarding price which manager can adopt. Capital joinery limited, use
skimping price policy which help in provides satisfaction to customers as well as help in
gain profits. Price of Capital joinery limited, set on the basis of expectation and market
demand of customers. Price optimization system beneficial for internal as well as external
stockholders as this will useful in attain business profits.
 Inventory management system: Management accounting is useful for maintain level of
stock. Stock management system is help in recognize maximum, minimum and
dangerous level of stock on the basis of that management department formulate policies t
control cost of managing and storing inventory. Capital joinery limited, apply technique
used in stock management system which includes, FIFO, LIFO, JIT, ABC analysing, all
theses are help in recording inventory in effective manner. This will useful for Capital
joinery limited, to recognize value of under stock (Guinea, 2016).
 Job costing system: This system is used to determine value of job order, this system help
in recognize the cost incurred for complete or fulfil requirement of their clients. as
different customer according to their needs take order and measured value of rational job.
Capital joinery limited, use job costing system through which they can able to find out
cost required for running business activities. Theses information are useful for finance
manager on the basis of that they formulate their trading statement.
P2 Explanation of different modules use for management accounting system
Report: The term report has been consider as document which help in defining all the
summery and information of business activities in systematic manner. It is record of all business
transactions which are essential. Following are types of report which management department of
Capital joinery limited, has been formulated
 Performance report: This report is consider as combination of all the reports as it
proved base for measuring performance of each department. This report gives
information regarding the overall performance, target achieved by departments as well as
individual performance of workforce. Capital joinery limited, formulate performance