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Management Accounting System for Financial Problems

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UNIT 5 MNG ACC TABLE OF CONTENTS INTRODUCTION 1 TASK 11 P1 Management accounting and productionessentialsrequirementofmanagement accounting in the organisation 1 P2 Methods of management accounting jobs reporting in the company 3 TASK 25 P3 Marginal and absorption costing and explaining differences 5 TASK 38 P4 Advantages and disadvantages of different types of planning tools8 P5 How management accounting system adapts to respond to financial problems 11 CONCLUSION 12 REFERENCES 14 INTRODUCTION Management accounting plays

Management Accounting System for Financial Problems

   Added on 2020-06-04

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UNIT 5 MNG ACC
Management Accounting System for Financial Problems_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and essentials requirement of management accounting in theorganisation............................................................................................................................1P2 Methods of management accounting reporting in the company.......................................3TASK 2............................................................................................................................................5P3 Marginal and absorption costing and explaining differences............................................5TASK 3............................................................................................................................................8P4 Advantages and disadvantages of different types of planning tools.................................8P5 How management accounting system adapts to respond to financial problems.............11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................14
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INTRODUCTIONManagement accounting plays a crucial role in as it assists the company in makingeffective use of financial data and information for growth and development of business. Thereport will evaluate the implementation of different management accounting system in Agmetwhich is resource management business and it focused on establishing its global presence. Thefirm deals in metals, edible oils, high temperature alloys etc., (Ramiah, Kuppusamy andGharleghi, 2018). Also, it will identify different methods of management accounting reportingwhich helps in determining effective accounting management practices which are related withgrowth and stakeholders of firm. Apart from this the report will outline difference betweenMarginal and absorption costing which helps the enterprise in managing its income statement.Thus, the report will identify management accounting tools which can helps Agmet in managingfinancial problems such as, benchmarking, throughput accounting method etc. TASK 1P1 Management accounting and essentials requirement of management accounting in theorganisationManagement accounting is an important tool of managerial decision-making so thatorganisation may be able to become internally strong so that customers may be provided qualitygoods in the best possible way. Management accounting is an important branch of accountingwhich summarises data obtained from financial accounting so that it may assess internal strengthof organisation in effective way (Zhang, Randhir and Zhang, 2018). The management isbenefited by such information as it is able to judge internal strength of the company and as such,enhanced decisions are taken for the betterment of the organisation. Agmet Company which isengaged in manufacturing sector provides chemical related products to customers. The companyalso uses management accounting information in practice so that firm may perform well andquality services to customers. The main essence of such information is that managerial reports are prepared on timelybasis and as such, costs are ascertained quite easily. This provides clarity about the expendituresincurred by the organisation to accomplish tasks. This help management to take measures toreduce costs so that more production may be achieved with much ease. Financial informationprovides management to take short-term as well as long term decisions in effectual way(Ahadiat, 2013). Agmet Company is benefited as through management accounting various trend1
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charts, variances are carried out which provides clarity to management to assess progress of theorganisation in the best possible way. However, external stakeholders are not provided thisinformation as it belongs for making decisions solely by the management. Thus, company isbenefited by such information and enhanced decisions are made for achieving common targets.In addition to this, various types of management accounting are described below-Price optimisation:Price optimisation is useful analysis which is quite useful for organisation to set price ofthe products in effective way. In simple words, it is a mathematical analysis which is used toassess the consumer behaviour when certain price is quoted by the company. This technique helpmanagement to analyse that whether customers are ready to buy products at that price which isquoted by it or should modify price in accordance to the wish of customers in the best possibleway (Chenhall and Smith, 2011). This help management to successfully set price of a particularproduct with reference to wish of customers and as such, they achieve satisfaction quite easily.Agmet Company also uses this management accounting method so that adequate prices may bequoted so that customers may be delighted and they are not attracted to rivals.Cost accounting:Cost accounting is another useful for management to ascertain costs and initiate measuresto reduce costs. This is essentially required mainly in manufacturing sector which involves lot ofindirect expenses, direct, fixed, variable and semi-variable expenditures in accomplishing tasks.This accounting technique analyses each and every costs and as such, steps are taken to minimiseexpenses in effective manner (Van der Stede, 2011). Various costs are ascertained and actual andplanned output is compared so that management may be able to take better and effectivedecisions in the best possible way. This help management to take enhanced decisions so thatcosts may be reduced and overall production may be achieved with much ease. Theascertainment of various costs such as operating costs are also important as business has toperform daily operational tasks and which incurs expenditures. Thus, cost accounting is effectivebranch of management accounting which reduces cost of the concern to accomplish enhancedproduction.Job costing:2
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