Unit 5 - Management Accounting L-4 Introduction Introduction

Unit 5 – Management
Accounting L-4

INTRODUCTION
MA also known as cost accounting that is an chain of actions related with the
identification, analysing figures and facts, interpretation and communication to the higher
authority to obtaining structure goals and subjective by planning and coordinating. It related
with the all fields of the accounting to inform the management about business operation metrics.
In it information regarding cost of products and services that purchased by an organisation
should be evaluated. This assignment rely on the Oshodi PLC which is an manufacturer of the
JOJO fruit juice for all age group people. That assignment is settled on the demand of various
kinds of management accounting reporting and requirement of the types of management
accounting systems to get important insights and results. It also includes the various kinds of
tools and techniques to build income statement. Further it added different types of planning way
and techniques with their benefit and disadvantage to get important results for accomplishing
desirable outcomes. In that regards proper planning and implementation of the plans and policies
is very much important for gaining competitive advantages.
TASK 1
P1.
MA refers to planning and their application of the professional knowledge, techniques
and concepts to accumulate necessary accounting information that helps to management in
building plans and policies and control the operations of an organisation (Boučková, 2015.). In
that budget plays very much crucial role for quantitative expression related with the business
plan related with operations to get important knowledge and insights to get optimum outputs. In
context of Oshodi PLC that manufactures the JOJO fruits use management accounting to
transform the important data and analytics into important kind of knowledge and information so
that improved decisions should be taken by the management. Management accounting system
avails the information regarding the companies financial information and accordingly develops

various kinds of reports that confidentially use by internal managers to reap important insights
and knowledge. For an organisation different types of MAS should be used which are:
Cost accounting system:
A cost accounting that acknowledge as Costing system is an structured format which use
by organisation to evaluate and calculation price of commodity and services to get level of
profitability from them and inventory valuation with controlling cost for gaining large market
share (Alsharari, Dixon and Youssef, 2015.). To evaluate the actual value of good is very
much critical for an administration with motive of profitability evaluation. In context of Oshodi
PLC they produce the JOJO fruit juice in which it is very much crucial for them to estimate
correct value of good that incurs during the production of goods and services in positive way. On
other hand it also proved beneficial for calculation the closing measure of the substantial
merchandise, work in progress and finished products and services with the purpose of building
financial statement. In context of Oshodi PLC which manufacture the JOJO fruits they majorly
use two types of cost accounting systems in which job order costing and process costing to
accumulate necessary statistics and data for gaining competitive edge.
Job costing system:
JCS which is a chain of activities assistance to store important kinds of value that are
associated with the production and service jobs. That kind of knowledge and information should
be submitted cost relating information to customer in which cost should be reimbursed. In
context of Oshodi PLC that kind of information proved useful for them to determine the
accuracy of the organisational system in better manner by quote pricing for getting reasonable
profitability. That types of MAS also proved beneficial to assign inventory cost to manufactured
goods and services in order for gaining organisational goals and objectives.
Price optimisation system:
Price optimisation system is one of almost crucial kind of management accounting
system that helps to find out best price of products and services as per they happily willing to
pay prices (Hiebl And et.al ., 2015.). In Context of Oshodi PLC which expertise in producing
the JOJO fruits so it is very much important for them to utilise the one of best price for their
products and services by making decent profit. The reason behind that if he price fixed too high
then it may not sell at all and if organisation sell quickly or at low price then they restrain to earn
profitability. In context of Oshodi PLC they use one of best formula to optimise price on basis of