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Management accounting in the organisation 5 MNG

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Added on  2020-06-03

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UNIT 5 MNG ACC TABLE OF CONTENTS INTRODUCTION 1 TASK 11 P1 Explain management accounting and requirements in the organisation 1 P2 Management accounting reporting methods4 TASK 26 P3 Preparing income statements using marginal and variable costing up to consumers6 TASK 38 P4 Producing different planning tools8 P5 Discuss how management accounting system is used to respond to financial problems 11 CONCLUSION 13 REFERENCES 14 INTRODUCTION Management accounting is quite important part of organisation as it help management in taking

Management accounting in the organisation 5 MNG

   Added on 2020-06-03

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UNIT 5 MNG ACC
Management accounting in the organisation 5 MNG_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Explain management accounting and requirements in the organisation...........................1P2 Management accounting reporting methods.....................................................................4TASK 2............................................................................................................................................6P3 Preparing income statements using marginal and absorption costing...............................6TASK 3............................................................................................................................................8P4 Producing different planning tools....................................................................................8P5 Discuss how management accounting system is used to respond to financial problems11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
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INTRODUCTIONManagement accounting is quite important part of organisation as it help management intaking better decisions with much ease. The present report deals with Vectair Holdings Ltdwhich is engaged in manufacturing of hygiene products. The importance of managementaccounting is carried out in this report along with several types of it. Moreover, managerialreports are discussed which is much essential for the company to achieve efficiency in a betterway. Apart from this, marginal and absorption costing is calculated for the company to analysenet profit after charging expenditures. Various kinds of planning tools are also discussed whichare helpful in evaluating attractiveness and profitability of new project in effective way. Besidesthis, financial problems can be overcome by adopting management accounting system ineffective way. Thus, all these aspects related to management accounting is explained to takeenhanced decisions by the company.TASK 1P1 Explain management accounting and requirements in the organisationManagement accounting is quite essential for the organisation so that it may be able tostrengthen internally to provide quality services. By using this information, management is ableto take better and effective decisions with much ease. Managerial reports provide usefulinformation to management so that it may analyse various operational tasks prevailing in theorganisation. This management accounting information is useful for Vectair Holdings Ltd so thatit may be able to provide good quality products to customers. For manufacturing sector,management accounting plays essential role as it involves various direct and indirect costs whichare helpful for the company (Cooper, Ezzamel and Qu, 2017). In relation to this, VectairHoldings Ltd is also a manufacturing firm which provides hygiene products to customers' toremain healthy. Management accounting provides summary and detail aspects of operational activitiesongoing in the organisation and as such, information is quite useful for initiating control onvarious expenditures. The main essence of this information is that costs are analysed of eachactivities and monitoring is done so that expenditures may not exceed revenue of the firm. Thisinformation is quite meaningful for Vectair Holdings Ltd so that it may be able to initiate controlin various production tasks so that revenue may be earned with much ease. Management1
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accounting information is also useful for another aspect which is related to inventorymanagement. This is important for the company so that adequate quantum of inventory may bepurchased so that wastage may not occur and production may be achieved in the best possibleway. In relation to this, essential requirements of different types of management accounting islisted in the following points-1. Cost accounting:Cost accounting is the major type of management accounting which is useful incontrolling costs in effective way (Ax and Greve, 2017). This means that various costs areevaluated and analysed which are incurred in manufacturing of products and are carefullymonitored so that expenditures may not outreach revenue of firm. The main essence of costaccounting system is that it help management to provide clarity about overheads and variousexpenses so that it may be reduced up to high extent to accomplish more production and thereby,help in reducing unnecessary costs which deteriorates revenue. This information is useful formanagement so that it may be able to take enhanced decisions with much ease. Different types ofcosts such as indirect, direct, fixed, variable, semi-variable and other costs are analysed and stepsare taken to reduce the same up too much extent. Thus, cost accounting help to decreaseexpenditures so that company may earn more production quite effectively. 2. Price optimisation:Another useful type of management accounting which is used by company is priceoptimisation. This technique is a mathematical analysis which is taken out to analyse sensitivityof customers towards change in price of a particular product or commodity. This is important sothat company may set price in accordance to the demand of customers. This will have goodimpact on consumers as they will feel satisfied as price of products are quoted according to theirwish. This will be beneficial for the company and customers as well (Kenno and Free, 2017).Company will be benefited as more products can be easily sold and revenue may be easilygenerated and moreover, customers will be satisfied with low prices of the commodities. VectairHoldings Ltd should implement this technique so that it may analyse need of customers and thenin accordance, price of products may be easily quoted with much ease.2
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