Unit 5 Management Accounting Assignment Sample

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Added on 2021-02-21

Unit 5 Management Accounting Assignment Sample

Added on 2021-02-21

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UNIT 5:MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3Management accounting and different types of management accounting systems:...................3TASK 2............................................................................................................................................7Computation of cost applying appropriate techniques:...............................................................7TASK 3..........................................................................................................................................10Application of various budgets in respect of control and planning:.........................................10Pricing strategy..............................................................................................................................12TASK 4..........................................................................................................................................12Identification of various Financial problem and techniques for responding financial problems:...................................................................................................................................................12CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15

Unit 5 Management Accounting Assignment Sample_2

INTRODUCTIONIn business term management accounting contains functions and tasks directly orindirectly connected with collecting and transferring financial information within entity toprovide assistance in decision making processes. It is adopted by business entities to managetheir functions in structured way to attain predetermined targets or objectives. It providessmoothness in process of implementation of strategies and formulation of plans (Astuty, 2019).In establishing of internal control and check systems at different level within an entity,management accounting plays a significant role. In this context, this report provides a detailedexplanation about different elements of management accounting system, reporting methods ofmanagement accounting, advantages of different systems of management accounting andapplication of planning tools in context of Grange Aggregates Company. It is UK basedcompany and engaged in manufacturing of construction material like cement, concrete and otherconstruction aggregates. Report also includes a comparison of two organisations which areadapting systems of management accounting in order to responding financial problems. TASK 11Management accounting and different types of management accounting systems:In a business entity there are various function and activities which generates numerouskind information of information, some of them may be irrelevant for management. Managementaccounting system provides relevant information which assist management in process of takingdecisions for achieving business objectives. It includes function such as systematic classificationof information, entering information, measuring whether information is valuable for businessorganisation and at last communicate them for conducting process of taking decision effectively.There are various systems of management accounting that covers different aspects of anenterprise's business. Following is discussion about different management accounting systems,as follows:Price optimisation system- Every organisation put their efforts to make expansion inmarket but due to high competition and large number of competitors they are forced to put downprice of product. In this system clients or customers’ response is used to analyse the relationshipof demand and price of product (Barnard and Mostert, 2015). Under price optimisation system aparticular price is identified by business organisation at which demand is of product is high and

Unit 5 Management Accounting Assignment Sample_3

also company is gaining competitive advantages. In Grange Aggregates Company this systemhelps to fix a price of its construction material equal to or below the competitive brand to takecompetitive benefits. It also helps to increase the demand of product by setting a specific price ofits various construction materials.Cost Accounting System: This is cost focused management accounting system becausethis system combines activities related to recording, summarising, classifying, controlling andmonitoring of costs and expenses within a business enterprise. In manufacturing concern likeGrange Aggregates Company apply this system help in controlling costs and reducing them toincrease operating profits of company (Bedford and Speklé, 2018). For instance, in production ofconstruction material like cement, concentrate and other aggregates, it is hard for company toanalyse reason of increase in cost among large number of production processes so managementwith help of this system identifies the main cause of excessive costs.Inventory management system: in organisation like Grange Aggregates Company,there are large variety of products are produced by company and there are numerous kind ofinventories such as finished goods, unprocessed goods, finished inventories etc. Inventorymanagement system help in organising different inventories by combining activities likeclassification of inventories, inventory recording and monitoring inventories to manageinventories in efficient way (Bolt-Lee and Monte Swain, 2016). In Grange, it is applied bymanufacturing and process heads to control the movement of stock and optimise inventory costslike handling or storage to increase per unit profit, it also assists in ensuring availability ofinventories in warehouse for manufacturing process. Following are two most common methodsof inventory valuation used by company, as follows: LIFO – In this method inventories are managed with assumption that last or recentlypurchased inventories are sold first.FIFO – In this method inventories are managed with assumption that inventorypurchased in first would be sold first.AVOC – Under this method inventories are valued at average of cost of inventoriespurchased at different price and date.Job costing system – In organisations that have products which are totally unrelated, thissystem of costing is adopted.This system purely focused on classification of products as a taskand assign different cost to such job.In Grange Aggregates Company, this system is used to

Unit 5 Management Accounting Assignment Sample_4

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