Role of Management Accounting and Different Types of MAS

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................7
TASK 3............................................................................................................................................9
TASK 4..........................................................................................................................................11
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
APPENDIX....................................................................................................................................16

INTRODUCTION
The term MA is an accounting system that is aligned with a process of collection of
information regards to transactions of a business entity that happens during a particular time
period (De Loo, Cooper and Manochin, 2015). Under this accounting, data that is gathered has
the nature of both quantitative and qualitative aspects. The reason for which these data are
collected by accountants under this accounting is to produce internal reports that can help in
better decision making to managers. The aim of project report is to communicate and develop
better understanding about MA in broad manner by covering its various aspects. The company
that has been chosen in project report is Associated British Foods Plc, headquartered in London
United Kingdom. This company is world's second largest manufacturer of sugar and baker's
yeast.
The project report covers about various MAS, MA reports. As well as under the report,
vital range of budgets are discussed in and role of MAS in order to sort out monetary issues is
also demonstrated.
MAIN BODY
TASK 1
Role of MA and different kinds of MAS.
Management accounting – This is an accounting system aligned with procedure of preparation of
internal reports in order to better management of different aspects. Under these internal reports,
information about monetary and non monetary transactions is included. In addition, this
accounting is suitable for business entities in order to take suitable internal decisions of various
aspects in an effective manner. Below some role of this accounting are demonstrated:
 Helps in planning- This accounting is useful for companies in order to make planning of
future circumstances (Bolt-Lee and Monte Swain, 2016). It is so because by gathering
key information about financial and non financial aspects managers can become able to
make plan of further activities. Such as in above company, they make plan of activities
regards to production by help of this accounting.
 Helps in controlling- Due to this accounting, the managers of different departments
control various activities in an effective manner. Like in above Associated British Foods

Plc, their management department controls vital range of activities in an effective manner
by help of information provided by this accounting.
 Helps in decision-making- Another role of MA is that, by help of this accounting
business entities take corrective decisions. Like in Associated British Foods Plc, their
managers take right decisions about utilisation of both monetary and non monetary
resources.
Types of MAS:
 Inventory management system – This can be described as a form of accounting system
associated to the organized process of concentrating on those operations related to the in
and out of inventories in a business enterprise (Sands, Fonseka, 2016). Such accounting
system is primarily focused on inventory valuation using various tactics like LIFO (last in
first out), FIFO (first in first out) etc. It's vital for industrial companies to control costs
linked with different sorts of tasks e.g. purchasing and handling costs, carrying costs, etc.
According to the LIFO process, the finished products are first utilized for processing.
While using the FIFO process, good that had been purchased first is firstly used for
processing. Company's manufacturing division handles qualitative product aspects in the
above Imperial brands business. These both methods are based on different approaches
and also provides different values of inventories. It assist in effective tracking of different
stocks and minimises normal wastage.
 Price optimisation system- It is a sort of accounting system wherein different kinds of
structured operations are undertaken to determine product rates or prices. It mainly
emphasise on setting of appropriate price at which corporations sales is highest. Under it
managing personnels acquires information regarding customers' reactions at distinct
level of product price and also effects of any particular price level on company's future
sales. The sales division of corporations set a price of manufactured products based on
such acquired information. Businesses require these to successfully update as well as
adjust prices of multiple kinds of products. Different types of pricing tactics like price
skim, exploitation policy and many others are employed in such system. This system is
used by corporation's sales department from the aforementioned Imperial brands sector to
review pricing of company's tobacco products.