Unit 5 – Management Accounting L-4

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems...........................................................................................1
P2 Explain different methods used for management accounting reporting...........................3
M1 Evaluate the benefits of management accounting systems and their application within an
organisational context.............................................................................................................4
D1 Critically evaluate how management accounting systems and management accounting
reporting is integrated within organisational processes..........................................................5
TASK 2............................................................................................................................................5
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs......................................................................5
M2 Accurately apply a range of management accounting techniques and produce appropriate
financial reporting documents................................................................................................7
D2 Produce financial reports that accurately apply and interpret data for a range of business
activities..................................................................................................................................7
TASK 3............................................................................................................................................8
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control....................................................................................................................8
M3 Analyse the use of different planning tools and their application for preparing and
forecasting budgets...............................................................................................................10
TASK 4..........................................................................................................................................10
P5 Compare how organisations are adapting management accounting systems to respond to
financial problems................................................................................................................10
M4 Analysis of usage of management accounting to deal with financial issues faced by the
company...............................................................................................................................12
D3 Evaluate how planning tools for accounting respond appropriately to solving financial
problems to lead organisations to sustainable success.........................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is regarded as the application of professional techniques,
knowledge as well as aspects to prepare information related to accounting in such a way that
assists entities administration in such a way that assist their administration to formulate plans and
policies, controlling its business operations, decision making, optimal utilisation of resources ,
disclosure to administration as well as safeguard the assets. It includes formation as well as
facilitating time to time financial and statistical data to the manager of enterprises in order to
develop regular and short term decision of administration (Andersén and Samuelsson, 2016). As
per the given scenario the undertaken organisation for this report is OSHODI PLC which is
manufacturing firm. It is mainly specialises in producing JOJO fruit juice across whole age
bracket. This report covers various topics that are management accounting system, management
accounting reporting, computation of costs with the assistance of cost analysis. Moreover,
several tools of planning for budgetary control with its benefits and drawbacks are described.
Apart from this, application of management accounting system for an intent to respond the
financial issues are discussed in this report.
TASK1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems
Management accounting is considered as the processing as well as presentation
accounting and economical information. It will aids in assessing management performance,
preparing plan of action, performing comparison, budgeting, forecasting and many others. This is
vital for entities like OSHODI PLC to focus upon the effective management accounting at
continuous basis so that its stakeholders may examine actual performance of firm.
The entities internal system that is followed to perform practices in predetermined way is
known as management accounting system. With the assistance of this manager may evaluate
recent enterprise position as well as try to accumulate described data for business so that they can
able to develop strategies for future betterment (Chan, 2015). In OSHODI PLC, various kinds of
system that is utilised through administration to perform practices in appropriate way. Some of
these systems and its essential requirements are described underneath:
1