Management Accounting and Reporting: A Comprehensive Guide

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Role of Management accounting and their system and requirements....................................3
Management accounting reporting methods..........................................................................4
Benefits related to Management accounting system with its application in the organisation5
Integration of management reporting system with management accounting system.............6
LO 2.................................................................................................................................................6
Formulation of income statement using marginal and absorption costing.............................6
Application of management accounting techniques with different accounting reports.........8
LO 3.................................................................................................................................................8
Advantages and disadvantages of different types of planning tools used in budgetary control. 8
Analysis of different planning tools and its application to prepare and forecast a budget...11
LO 4...............................................................................................................................................11
Organisation are adapting management accounting system for respond towards financial
problems...............................................................................................................................11
Analysis of financial problems to lead with organisational success....................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
APPENDIX....................................................................................................................................15

INTRODUCTION
Accounting is used as a tool in analysis of different business activities for a organisation.
Accounting information is presented in various ways that helps to analysis information from all
departments of organisation. Management accounting refers to present various business activities
to internal management for make effective decisions in organisation. It is used by the internal
department for completing their work with more efficiency and effectiveness. Present Report is
based on the organisation Unilever which is a transnational consumer goods company producing
food and beverages and having its headquarter in London, UK. This report focus on management
accounting and its system. Along with this different method of management accounting reporting
and calculation of cost through marginal as well as absorption costing will also be discuss in this
report. At last advantage and dis-advantage of different types of planning tools and adoption of
management accounting system will also be discuss in this report (Ahmad and Mohamed Zabri,
2015).
LO 1
Role of Management accounting and their system and requirements
Management accounting is basically used to present different information related to
accounting that ensures to have effective policies of organisation. Due to this act it is easy for the
company to represent day to day activities. In context of different foods and beverage
management accounting assist them to perform their function with more efficiency and also with
more effectiveness. Implementation of the management accounting used by organisation to
describe or explain effective methods, system and techniques for organisation which leads them
to achieve more profits in the market. The professional knowledge and skills which is
implemented by organisation leads them to control and complete their operation's in effective
manner.
Types of management accounting system
Cost accounting system- Costing system of a business refers to formulate a framework
applied by the corporation for identify the approximate cost of their respective products. This
refers to inventory valuation, profitability analysis and cost control. There are two methods are
used by Unilever which is costing system and traditional costing system. This both methods
helps the business to identify cost of production by undertaking all steps through which products

are developed by production department. Costing method is beneficial for to measure and record
cost of its inputs through measuring their financial performance.
Inventory management- This methods refers to controlling and also storage of different
components that are applied by organisation in production of their goods. Inventory margin
system is a combination of various application such as barcode scanner, desktop software,
mobile devices etc. This helps the organisation to estimate cost of all goods which is applied by
Unilever to formulate a product effectively (Armitage, Webb and Glynn, 2016). Along with this
it refers to practice of controlling and overseeing quantities of goods in order to sale them in
market. The major role of this management of inventory is to present them accurately for all
levels of organisation. This practice refers to controlling and overseeing of quantities that is sale
by Unilever in market.
Job costing system- Job costing refers to a system which is used to determine price of its
on individual as well as unit basis. This system generally have different practices related to
accumulation of data on cost related to particular services and production job. This information
is needed by Unilever for submitting cost towards consumer for getting effective returns from
them. Also, information related to accounts is useful for determining accuracy upcoming projects
that is performed by organisation to complete their work. Further it is beneficial for the company
as it includes all types of cost related with labour, overhead and resources to perform a task
effectively.
Price optimisation system- This system refers to a process of increasing prices of their
products through which they are able to earn high profits in organisation. For Unilever, it refers
to determine that how consumer react towards prices of product. Due to this act organisation is
able to accomplish their goals by increasing their profits (Ball, Grubnic and Birchall, 2014). It
results effectively for management of Unilever because it leads them to minimize the aspect of
its undesired work.
Management accounting reporting methods
Management accounting is having its major focus on the information that is received by
internal department of organisation. It is applied for controlling, decision-making and planning
of completing a work through making effective decisions for organisation. Management
accounting depends on balance sheet, cash and fund flow statement. Moreover they are