Management Accounting: Techniques, Tools, and Solutions for Financial Problems

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT............................................................................................................................1
TASK 2............................................................................................................................................1
P3: Calculation of costs...............................................................................................................1
TASK 3............................................................................................................................................7
P4: Advantages and Disadvantages of planning tools for budgetary control..............................7
TASK 4............................................................................................................................................9
P5: Comparison of organizations and the way they use management accounting to respond to
financial problems........................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Management accounting is an accounting technique in which the different provisions are
used so that the managers are able to take short-term and long-term decisions which can be
highly beneficial for the future time period for the organization (Yi-zhen, 2019). For using it the
managers are required to use their skills to analyse and interpret in a much better manner by
deriving out conclusions and recommendations from the given financial data in a highly effective
manner. This report will focus on Prime Furniture which is a a growing London based entity that
is planning for initiating training course for newly joined interns. In this assignment, there will
be specific focus on demonstration of understanding of various systems, application of different
techniques. Additionally, use of planning tools and comparison of ways in which the firms can
make use of the available techniques to solve financial problems will be discussed as a part of
this project.
TASK 1
Covered in PPT
TASK 2
P3: Calculation of costs for preparing income statement
Cost: It can be delineated as totality of money that is spent on aspects including goods or
services. There are various types of cost including fixed cost, sunk cost, product and period cost,
etc. In Prime Furniture, managers apply absorption costing together with marginal costing. In
relevance to absorption costing, it is applied in the venture for determining profitable selling
price of commodities and stock valuation purposes (Canh, 2018). At same time, marginal costing
is applied for making buy or manufacture decision, choosing suitable product mix and fixing
selling prices.
Product costing: There are two kinds of product costing techniques, one is fixed cost and
another is variable cost. Fixed costing involves cost which do not alter or change with changes in
amount of products or services (Hansen, Mowen and Heitger, 2021). Likewise, variable costing
comprises occurrence of manufacturing overhead over a period on which product is
manufactured. In Prime Furnitures, other costing such as standard costing, activity based costing
and many more plays significant role in preparation of financial statements.
1

Calculation of costs through costing techniques in Prime Furnitures:
2