Unit 5 – Management Accounting

Management
Accounting

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK1.............................................................................................................................................3
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems. ..............................................................................................3
P2 Explain different methods used for management accounting reporting. ..............................5
TASK2.............................................................................................................................................6
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs. .........................................................................6
TASK3...........................................................................................................................................10
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control......................................................................................................................10
TASK5...........................................................................................................................................13
P5 Compare how organisations are adapting management accounting systems to respond to
financial problems.....................................................................................................................13
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Management accounting is an accounting which identify, measure, evaluate, interprets
and then communicate the financial information of company and helps manager to check their
financial position and help in achieving the organisation goals. This helps the manager to plan
strategies and formulate policies so as to manager their company's operation. It helps in
controlling the activities of management and take suitable decision regarding and use resources
alternatively and efficiently. In this report, it is shown that how the accounting manager uses
various techniques, tools and adopt different accounting system so that they can maintain, track
their financial position and can also improve ,resolve the grievances and faced by the
organisation which disturbs their financial status.
The report is about a UK based Connect Catering Services established in the year 1998
founded by its Chairman John Herring and his daughters. Its headquarters are situated at
Wallingford, UK. They provide food services, delivering quality and fresh food to their customer
with amazing taste. In this report, topic like different accounting system, calculation, usage and
benefits of budgetary tools and approaches of management accounting is been discussed.
TASK1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems.
As discussed above, management accounting is an accounting system which helps
company to measure their financial position,control their business activities by identifying,
evaluating, controlling and communicating the financial information to the managers. It helps
manger to take financial decision by using this information. It helps to increase the efficiency
and effectiveness of the operation of a company. This type of accounting generally needs to
prepare reports including the expenditure and revenue,(Masschelein,Moers,20220) cash, current
account, trade receivable and paybles etc. Such reports are need to be shown to the internal
investors of the company so that they are also aware of the financial performance and position of
the company so as to take decision related to further investment effectively.
Management Accounting is a part of financial accounting only but there is a big
difference among the two. A difference table can be helpful to see the difference which is
discussed below:

Basis Financial Accounting Managerial Accounting
Usage This type of accounting is used
by the external stakeholders so
so to see the information and
make decision regarding
investment.
This accounting is used by
internal stakeholders of the
company(Guinea,2016) to
analyse and take investment
decision as per the status or
financial performance.
Laws Management accountants work
by abiding themselves through
various laws and follow the
guidelines while analysing and
making these finance accounts.
As this type of accounting is
basically used by the internal
management of the company
and that why they don't have
any regulations to be followed
by preparing such accounts.
Content Financial Accounting carries
information related to finance
only.
It is a part of financial
accounting and contains the
financial as well as non
financial information.
Management Accounting has different accounting systems which is used by the managers
wh(Nuhu,Baird,Appuhamilage,2017ich are discussed below:
 Cost Accounting System: This system is also referred as costing system or product
costing system. It helps organization to record, evaluate and report the various cost like
fixed cost, variable and semi- variable cost. This system (Guffey,Harp,2017)helps to
identify the loopholes and focus on the improvement for that, they need to take