Management Accounting Systems and Techniques

Management
Accounting

INTRODUCTION
Management accounting is connected to ensuring managers with business information as
well as directing and controlling its operational activities to increase profit margin. MA performs
a specific significant role in supplying useful information to managers at every level so that
proper decisions are made for future improvement. The context of management accounting is
quite broad because it covers all forms of financial accounting relevant to the company. Business
managers compile, track, assess, track and evaluate data to aid themselves in developing policies
to achieve this goal. To better gain the knowledge of MA Western Foods Ltd have been selected
which is a medium sized company.
This project includes a MA framework with specific management details and the value of
various reports. Specific costing approaches such as marginal costs and absorption expense are
used to calculate net margin, study relies on multiple forecasting techniques to build budgets. In
addition use of accounting strategy methods to solve financial issues that occur within the
organization are also discussed.
TASK 1
Benefits of the Management Accounting systems
In the current era, a structured process is called MA to track and record favourable financial and
non-financial productivity information about the company within such a given time frame. There
are many systems which help to make better choices for managers which are discussed
underneath:
Inventory management system: This type of system is used to control inventory in storage
facilities and checks the accessibility of raw resources, capital etc. For any type of organization
in particular those engaged in production this system is advantageous (Kolk and Perego, 2015).
Essential requirement: This monitors the raw material movements as it goes into the
manufacturing network and monitors the commodity before it is delivered. In brief it can be
assumed that this device assists in the control of the supply chain. Western Foods
Ltd implements this program that helps to addresses any kind of mismanagement of stock or
other obstacle.
Benefits: This system support administrators to increase market performance and profitability
while retaining stocks. Moreover, it encourages an improvement in the amount of accessible

inventory details in order to facilitate the manufacturing cycle and fulfil the requirement of
existing customer of Western foods ltd.
Price optimization system: This program allows company to maintain a pricing point that is
appropriate for both enterprise and consumers. It contains of different techniques that enable to
adjust to retail prices for products and services by assessing customer’s preferences and current
market trends. It makes it possible for the Western foods to fix best price of food items.
Essential requirement: Manager of respective company uses this system when setting
appropriate prices to increase customer base and grow profit. This program will assist the client
in determining a price that can help achieve the priorities and objectives of the business. It may
also support Western Food Ltd to achieve strategic advantage over competition firms
Benefits: This system assists an organization in setting the correct selling prices so that the
business could really earn profit in the future.
Job costing system: This structure of MA provides a process to calculate cost for the component
of each good or service produced within company. This helps to measure the cost per unit of the
product independently and whether the variable cost per unit is large then it allows devising
effective cost control measures.
Essential requirement: This method is implemented in Western Foods Ltd. so they will test the
value of each product. This approach will also help raising the value of the product of the
business. It will help to achieve greater profit, since if expense is limited, price decrease and the
sales of goods increases (Mahesha and Akash, 2013).
Benefits: The efficiency of the particular work done inside an enterprise is decided by the
program administrators within Western Foods Ltd to eliminate the un-productive task and jobs.
Cost accounting system: This system provides comprehensive information related with
involvement of cost to develop prospective programs and strategies. It help to control and
monitor the costs throughout the production process and then analyses and assigns them to each
good or service and if costs are high the whole system offers guidance to the upper executives in
order to reduce costs.
Essential requirement: This structure is used by Western Foods Ltd in cost management, as it
helps in proper cost analysis used in production of different food item. This also gives
administrators ideas for preparations and approaches for the possibility and for rising costs.

Benefits: Western Food Ltd has benefit from this system in evaluating and managing the total
expense of selling products within the business. This also assists administrators in determining
real sums for goods available for sale (Neubauer and et.al, 2012).
Explanation of different techniques and methods used for management accounting reporting
Principle of MA
 Planning assistance: In a view to achieving the company's short-term and long-term
goals so that MA aids for the spending plan can be provided so that expense and profit
assessments are carried out in due course, management accounting systems help to assess
the right information in order that the aspect of a business 's goals are fulfilled.
 Helps to organize: MA supports in attempting to make those final conclusions the
guarantee of rights and duties such that an appropriate work flow can indeed be retained
in assessing the performance of Western food Ltd, so that operations can also be
modified and executed in an appropriate manner.
Different reporting methods
MA reports are beneficial in budgeting, decision-making as well as measuring
performance. Based on such findings, several important decisions are made.
Budget report: This report is used for internal use which contain targeted performance
measures and on these standards manager use to compare real performance with
anticipated performance. This study primarily seeks to assess success by calculating income or
expenditure for a program and schedules it over a specific period of time. In western foods ltd,
the financial output is analysed with the support of budget report is developed and more ways are
develop to increase profit margin (McLean, McGovern and Davie, 2015).
Accounts Receivable Ageing Report: This study is usually compiled for certain
companies who render much of their cash purchases. If a consumer does cash purchase with an
entity, so the purchase must be published in this report by the company. Generally speaking this
report aims at identifying the company's accounts receivables. In Western Foods Ltd this will
improve the business to monitor total money consumers are owed. It would also actually make
regular cash flow since it is directly relevant to accepting funds.
Performance report: It assists in success evaluation as the real result is compared to
expected results. It assesses individual and collective performance in order to make critical
decisions about the appraisal. When the work of an employee meets expectations, the employee