Management Accounting Systems and Techniques

Unit 5: Management
Accounting

INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
TASK 1............................................................................................................................................1
P1. Explain the essential requirement of management accounting systems................................1
P2. Evaluate different methods which are used in management accounting reporting...............2
M1. Evaluate the benefits of management accounting systems along with its applications.......3
D1. Critically evaluate that how accounting systems are linked with the accounting reporting.3
TASK 2............................................................................................................................................4
P3. Calculate the cost by using suitable techniques and prepare income statement....................4
M2. Implement the range of accounting techniques to produce financial reporting document. .5
D2. Produce financial reports that accurately apply and interpret data for complex business
activities.......................................................................................................................................7
TASK 3............................................................................................................................................8
P4. Evaluate the advantages and disadvantages of different planning tool which are used for
budgetary control.........................................................................................................................8

M3. Analyses the use of different planning tool and its applications in preparing budget and
forecast.......................................................................................................................................11
TASK 4..........................................................................................................................................11
P5. Compare how organizations follow management accounting systems to resolve their
financial issues...........................................................................................................................11
M4. Analyse that how management accounting leads to organization for sustainable success 13
D3. Evaluate that how planning tool used to resolve financial issues and leads towards
organizational success...............................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Management accounting is a specialized branch of accounting which includes reviewing
financial knowledge to generate and execute a corporate strategy (Brustbauer, 2016).
Management accountants also can assist with risk management, performance measurement and
strategic management for their companies. Skilled financial managers can operate for both
individuals and organizations throughout every area of industry. This report is based on City
Technology Limited which is UK based medium size company and deals in gas sensing units
which are their specialization. This assessment based on the several topics such as understanding
of management accounting systems, different types of reporting and planning tool which are
used for budgetary control. In addition, it also includes the demonstration regarding how
management accounting systems help in resolving financial issues of the company. Management
accounting is essential for the organization and it also helps the managers to evaluate the
operational performance and build strategies accordingly to improve the overall efficiency as
well as effectiveness.
MAIN BODY
TASK 1
P1. Explain the essential requirement of management accounting systems
There are several management accounting systems which are followed by the manager’s of
City Technology Limited to evaluate their operational efficiency as well effectiveness. All are
discussed below:
Inventory management system: With an efficient supply chain, it is the technology that
lets businesses monitor their inventory level. It optimizes the full range from buying stuff with
the service provider to order fulfilment for their client, evaluating a production company's
corporate pathway (Cooper, 2017). City Technology Limited management implement this
program into their business to monitor regularly the level of inventories in warehouses. It helps
in producing goods as per customer demands. This method is essential for managing the quality
of the product or being responsible in the organization. Manager is capable of creating a
successful plan for the organization to conduct its business well.
Cost accounting system: Costing tools are implemented by manufacturing businesses that
constantly track the flow of goods through the different phases of production and assess each
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