Management Accounting: Systems, Techniques, and Reports

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Brief description regarding various types of systems of management accounting................3
P2 Methods used for management accounting reports...............................................................4
M1 Benefits of management accounting system........................................................................5
TASK 2............................................................................................................................................7
P3 Calculation of cost by using management accounting techniques.........................................7
M2 Uses of management accounting techniques for formulate reports....................................11
TASK 3..........................................................................................................................................11
P4 Brief description regarding benefits & drawbacks of planning tools used for budgetary
control.......................................................................................................................................11
M3 Uses of planning tools for forecasting budgets..................................................................13
TASK 4..........................................................................................................................................13
P5 Brief explanation of use of management accounting tools for resolve financial problem. .13
M4 Use of management accounting tools for lead organization success by solving issue
related with financial problem..................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting is essential branch of accounting which apply by manager for
decision making purpose. In order to understand this concept Capital Joinery Ltd has been
taken. This organization is situated in UK, it is medium size business entity which provides best
quality of furniture, doors, window facilitates to their customers. This report includes the
relevance of different types of managerial accounting system as well as use of various
management accounting report for formulation of budget. This report also define how cost
calculate by using different technique and benefits of various planning tools. It is also showcase
use of benchmarking, and other technique of management accounting to solve monetary issue.
TASK 1
P1 Brief description regarding various types of systems of management accounting.
Management accounting: This term is combination of 2 essential word of running
business. One is management and other is accounting. Management is define as art of getting
things done by others. Accounting is procedure in which business transaction are collect,
analysis, record and present in effective manner. Management accounting is part of management
procedure which help in recording transaction in such a way which useful for managers in
decision making procedure (Anand, Balakrishnan and Labro, 2019).
There will be many types of system which used by manager in order to re4cord their
transaction following are define below Job costing system-based: This system is implemented by business entities in order to
calculate or measure cost required for fulfill demand of each business customers. Their
will be different types of cost assign by organizations in order to complete their particular
or specific job. Capital Joinery Ltd used job costing system in order to assign or
calculate job. Inventory management system: Stock is consider as most essential element of
organization. Success of business entity depend on how effective organization manage
their inventory. There various kinds of tools which help in manage, control and evaluate
maximum, minimum number of order required to fulfil demand of customers. Capital
Joinery Ltd use ABC, JIT,EOQ, LIFO and FIFO technique through which they can able

to understand requirement of stock at the time of supplying finished goods for selling
purpose. Cost accounting system: This system is implemented by manager in order to calculated
final cost required for run or operate business cycle. There will be many technique or
tools which useful to determine cost and profit generate by selling business units. Cost
accounting system is implemented by Capital Joinery Ltd in order to systematically
recognize total cost organization bear to make products as well as run their day to day
business activities. They generally use marginal, absorption, standard costing tools
which useful in accurately determine cost of business activities (Anderson, 2017, Baard
and Dumay, 2020).
 Price optimization system:This system is implemented by managers in order to
determine rate of price. As it is consider as factor which useful to generate profit. Thus
manager needs to choose their price rate which help in generate profit by satisfying
demand o0f customers. There will be many methods which manager of Capital Joinery
Ltd use to determine their price rate which includes, price penetration, price skimming,
price premium and discounting price method. Manager on the basis of stage of running
business cycle need to select and choose price method which useful in attain business
profits.
P2 Methods used for management accounting reports
Management Accounting Report
Management Accounting Report determine the financial status of a company. These
reports includes financial information right from records of accounting, transaction details,
profitability of a product, operating cost and regional sales over a period of time. With the help
of of these reports an organisation can plan, take decisions, regulate operations and also measure
the performance.
Types of Management Accounting Reports:
 Account Receivable Report: It is a crucial element for any organisation that provide
credits to its customers. Managers can easily find out the defaulters by knowing there
remaining balance and they can change there credit policies accordingly. Separate
categories are formed for product and services whose payment are 30, 60, and 90 days
delayed. As in UK people are comfortable to purchase on credit basis, due to this Capital