Management Accounting: Types, Reports, and Budgetary Control

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................7
TASK 3..........................................................................................................................................10
TASK 4..........................................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16
APPENDIX....................................................................................................................................18

INTRODUCTION
In the aspect of finance there are various accounting method that are applied by
corporations and management accounting is one of them. This can be understood as an
accounting method in which accountants analyse financial and anti-financial information for
producing internal reports for managerial aspects (Gray III, 2015). This accounting has different
number of features and roles for business entities. Basically, the objective of report is to
analysing about MA in a broad sense. Under the report a company selected which is London beer
factory, headquartered in London, United Kingdom. The company operates in production and
supply of beer into different segments of United Kingdom.
The report covers about different types of MAS and role for corporations. As well as
about various kinds of MA reports and planning tools of budgetary control. In addition, financial
statements are also produced in report along with contribution of MAS in sorting financial
problems faced by business entities.
MAIN BODY
TASK 1
MA- It can be understood as a type of accounting method in which systematic way of managing
quantitative and qualitative information in applied with an aim of creating internal reports. This
accounting plays a significant role for business entities that are as follows:
 Better planning- This accounting contributes in effective planning for companies. It is so
because management department of businesses utilise key information from prepared
internal reports under this accounting.
 Better controlling- As well as MA is beneficial for effective controlling of various
aspects. Such as in the above company, their managerial aspect keep control over
different departments by gathering important from this accounting (Smith, 2015).
 Effective decision making- Along with above benefits, this accounting is beneficial for
better decision making at different stages. It becomes possible only because of
availability of relevant data at the moment of decision making.

Different MAS:
 Cost accounting system- It is understood as a system that is linked with procedure of
projection of futuristic expenses of business entities in a better manner. The role of this
accounting is not limited till estimation, it also helps in finding variation of expenses. In
the companies, this accounting is essential for better management of monetary activities
so that amount of expenses can be decreased. Under above chosen business entity,
London beer factory this accounting system is applied with an aim of keeping cost of
beer manufacturing lower from the estimation.
 Price optimisation system- As accordance of name, this accounting system is associated
with a process of setting prices of products and services as per the demand and quality of
each product (Harrison and Lock, 2017). It becomes possible because under this, data is
collected about customers' demand and price is being set. Such as in regards of above
company, their sales department utilise useful information about demand of their beer
into various market segments on the basis of this price is being set.
 Inventory management system- This is a kinds of accounting system which is aligned
with process of keeping control on those goods that are purchased and sold out by
companies during a particular time period. In this, the valuation of stock is done as
accordance of various methods such as LIFO method, FIFO method and weighted
average cost technique. All these techniques play a significant role for companies in order
to track accurate quantity of material at the time when it is needed. Such as in regards of
above business entity, London beer factory their production department utilise key
information about stored raw material for manufacturing of beer.
 Job costing system- This can be understood as a kinds of accounting system that is linked
to procedure of computing cost of each produced unit in a correct manner. The objective
of this accounting system is to minimise overall cost of job in a better way. This is not
suitable for small businesses because of small product portfolio. It is suitable for
companies whose product portfolio is wider. In regards of above company, this
accounting system is applied in order to address cost of each produced unit of beer.
Various method of MA reports