UNIT 5 MA (Management Accounting)
21 Pages5420 Words374 Views
Added on 2020-10-23
UNIT 5 MA (Management Accounting)
Added on 2020-10-23
ShareRelated Documents
UNIT 5 MA
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1A. Meaning of management accounting and essential requirements of different types ofmanagement accounting systems...........................................................................................1B. Explaining Different Management Accounting Reports...................................................3C. Evaluating the benefits of management accounting systems ............................................5D. Integration of management accounting system and reports are developed in organization ..6TASK 2............................................................................................................................................6A. 1 Explaining absorption costing and marginal costing methods.......................................6A.2. Producing income statements by utilising costing methods...........................................7B. Computation of Break-Even analysis................................................................................8C. Applying the range of management accounting techniques and produce appropriatefinancial reporting documents accurately for the scenarios given in the Task 2. ..................9D. Producing financial reports that accurately apply and interpret data for business activitiesshown in the scenarios .........................................................................................................11TASK 3 .........................................................................................................................................11A. Advantages and disadvantages of different types of planning tools for budgetary control 11B. Showing application of the planning tools for preparing, forecasting and analysing budgets..............................................................................................................................................13C. Comparing how organization helps in adopting the management information system ascomparison with the financial problems...............................................................................14D. Analysing how your management accounting techniques could respond to financialproblems and lead the organization to sustainable success..................................................15E. Evaluating how planning tools could be used to solve financial problems and lead theorganization to sustainable success. ....................................................................................16CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
INTRODUCTIONManagement Accounting is defined as expertise of financial data and advice company touse for a company and its business development. This assignment is about managementaccounting and its significance for an organisation’s success. It will provide the meaning andessential requirements of various types of management accounting techniques with their benefits.The present report will study different accounting reports and their implementation in anorganization, i.e. Williams Performance Tenders which is the boat manufacturing companywhich was founded in the year of 1979. It would be discussing about various advantage anddisadvantages of its planning tools in efficient manner.Later, it will provide a profound analysis of marginal and absorption costing methodswith their income statements and interpretations for an insight about company’s overall growth.The report will present significance of break-even analysis. This assignment will consist ofnumerous advantages and disadvantages of planning tools with its applications. Along with this,the overall impact on the decision-making process of a company.TASK 1A. Meaning of management accounting and essential requirements of different types ofmanagement accounting systemsManagement accounting includes preparation of managerial reports and accounts servingto give accurate and precise financial and statistical data to the managers of organizations whichis required for decision-making. The major role played by it includes planning, organizing,judgement creation, controlling in an organization (Ax and Greve, 2017). Management accounting provides effective information from Williams PerformanceTenders so that manager can utilize this information and take better decisions to integrate it inevery level of an organization. It is provided only to management as internal decisions are takenand thus, shortcomings can be eradicated with ease.Such accounting is a useful tool for company because it serves decision making and leadsto an increased efficiency of functions of management. It also helps in fixing target and prices ofthe products (Management Accounting: Meaning, Functions and Characteristics, 2017).1
Requirements of different types of management accounting systems are explained below andare used by William Performance Tenders:Cost Accounting Systems Inventory Management SystemJob Costing SystemPrice Optimization SystemThe requirements of each system are listed below:Cost accounting system This is used to identify the cost of each product or service. In the process of production,such accounting system aids to develop efficiency to minimize the cost. This helps in moreproduction. Therefore, it supports to initiate control over various types of costs such as direct,indirect, fixed, variable and semi-variable quite successfully.Inventory management system This system has many benefits for William Performance Tenders. It reduces overexploitation of resources to a certain level. Further, with the help of inventory managementsystem, no excess inventory is ordered that reduces amount of the expenses in operative means.It is requisite so that business may be capable to attain maximum production and fulfillingcustomers’ orders with ease. Job costing system It is also an impelling method to examine cost incurred on different manufacturing jobs.It is fundamentally needed to evaluate costs so that it could be reduced for gaining production atlow cost. It assists Williams Performance Tenders to control costs and supports theirmanagement for suitable distribution of jobs. This efficaciously assist to cut down costs and thus,business is able to accomplish production timely. Hence, job costing accounting system hasplenty of benefits to company in achieving production and met demand of customers quiteeffectually.Price optimizing systems It is a system that helps to identify the best possible price to be quoted for production. Inthis system, it provides opportunities to concentrate on various goals. Firm takes into accountconsideration of customers’ and quote less price for products and services (Cooper, Ezzamel and1
Qu, 2017). Williams Performance Tenders uses this technique for setting the best prices ofgoods.B. Explanation of Different Management Accounting ReportsManagement accounting is also known as managerial accounting. It focuses on internalinformation of organization which is obtained from their financial accounting. These reports areused for all the amendable regulations and measurable parameters for the overall growth anddevelopment of Williams Performance Tenders. These reports are generated throughout theaccounting period to assist management in taking decisions.Some essential reports of management accounting are listed below.Budget reports This report of management accounting is generated as a whole for small businessesespecially department wise. Budget reports are critical in measuring the performance of acompany. However, to understand the grand scheme for their business, each organizationimplements an overall budget. It is prepared by keeping all the circumstances in mind which mayarise throughout the year. The establishment's budget lists several sources of earnings andexpenditures. Account receivable aging reports The Accounts Receivables Aging Reports are vital for this company which relies heavilyon extending credits. These reports are beneficial as they allow specifying the remainingbalances and also to identify defaulters in specific time period. In case of many defaulters, thecompany may need a complete transformation of its credit policies (Accounts receivable agingreport. 2018). It is prepared to recover outstanding money from credit customers’ so thatoperational tasks can be performed quickly by company. If funds remain outstanding for longtime, then it is required that strict credit policies should be implemented by which amount isrecovered within stipulated time. Thus, it helps company to prepare such report and thus, clarityis observed for remaining amount to be recovered from debtors.Cost managerial accounting reportsCost of articles that are manufactured are computed by the management accounting. Allraw material costs, overhead, labour and any added costs are taken into consideration. This2
report helps managers to classify the cost price of products and services with respect to its sellingprice. The margins for the profits are identified with help of these reports. Performance reports This report is basically to review the performance of Williams Performance Tenders aswell as employees at the end of accounting year. In large organizations, departmentsperformance reports are also generated which measures and identifies the performance of eachdepartment of the company (Performance report. 2018). To take the key strategic decisionsabout the future of the organization, managers utilize such report. Performance-relatedmanagerial accounting reports also offer an insight into the working of a company. Other managerial reports There are some more reports which are essential for business such as order informationreports, project reports, competitor’s analysis etc. (Eldenburg and et.al., 2016). They are eithercreated internally or outsourced through professionals.These reports are required for an up-to-date and reliable manner so that decision-makingcan be made by relying on such information. Moreover, any deviations are analysed in companythat could be effectively handled by taking corrective actions and as such, overall performancecan be judged in a better way. Management is able to take better decisions by assessing suchmanagerial reports to enhance performance of firm and increase financial standing by enrichinginternal operations.3
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
(Doc) Management Accounting Assignment - Solutionlg...
|18
|5303
|72
Management Accounting - Aston chemicals Assignment PDFlg...
|20
|5519
|52
Management Accounting Techniques: Assignmentlg...
|21
|5483
|284
UNIT 5 - Management Accounting Systemlg...
|19
|5526
|327
Determining the nature of management accounting systemlg...
|18
|5188
|482
Integrated Management Accounting Systems and Management Accounting Reportinglg...
|23
|5798
|58