P1 Management accounting system and their essential requirement

UNIT 5

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Management accounting system and their essential requirement..........................................1
P2 Type of management accounting reports and its importance to management.......................3
M1 Various type of system and their benefits ...........................................................................4
D1 Management accounting systems reports integrated in organisational processes.................5
TASK 2............................................................................................................................................5
P3 Cost analysis techniques to prepare income statement to calculate cost...............................5
M2 Range of management accounting techniques......................................................................9
D2 Financial reports that accurately apply and interpret data...................................................10
TASK 3..........................................................................................................................................10
P4 Advantage and disadvantage of various types of planning tool..........................................10
M3 Evaluation of planning tool for preparing budgets...............................................................1
TASK 4............................................................................................................................................1
P5 Adaption of management according to respond financial problem.......................................1
M4 management accounting system lead to long term sustainable success. .............................3
D3 Financial problem avoid with the help of planning tool.......................................................3
CONCLUSION ...............................................................................................................................3

INTRODUCTION
Management accounting is a formative procedure in which preparation of management
accounts and reports are done that in turn provide data and financial statistics in accurate and
timely manner. Management accounting is considered as an branch of accounting that effectively
offer accounting information in a systematic way with the help of which business organisations
can able to perform their functions of decision-making, planning and controlling (Anderson and
Sedatole, 2013). Thus, management accounting is determined towards undertaking of best
policy and formulation of plans in order to accomplish desired set of organisational objectives.
Thus, with the help of modern management techniques organisation can effectively able to
accomplish their operations in best effective way. Present report has been made on, The
Berkeley Partnership. Present organisation was established in 1990. Company effectively engage
in the functions of offering services in Independent management consultancy along with this
organisation is having numerous number of Client Company. In addition with this, present
project include Essentra Packaging, which is mainly a manufacturing company that produce
seals, tear tapes, labels etc. Along with this report include the formative discussions on concept
of management accounting along with cost suitable techniques that will effectively aid
organisation to perform their operations. Lastly, in this report advantages and disadvantages of
planning tool is covered.
TASK 1
P1 Management accounting system and their essential requirement
Management accounting is termed as an formative process within which various
activities are done which is mainly related to analysation, presentation and collection on
monetary as well as non monetary terms. This lastly offer different types of advantages to
organisation with the help of which they can effectively operate their functions related to
planning, organizing, controlling and decision-making. With the help of management
accounting system Essentra Packaging can effectively able to accomplish there desired
objectives. Thus, it is important for an organisation to effectively consider effectiveness of
management accounting characteristics as with the some of this they can effectively able to
conduct their operations. Mentioned below some of the certain characteristic are defined:
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Reliability:
Within this it is important to have all related information in reliable form with the help of
which effective decision-making can be ascertained for future improvement.
Up to date:
Mangers are required to ensure that all the informations within accounting statements are
up to date and time accurate as to measure actual performance in well defined manner.
Accounting system aid organisation to maintain their financial records in well effective format as
to strengthen their market image.
Price optimisation system –
In order to gain competitive advancements it is essential for an organisation to set price
of their products and service in a structured manner. With the assistance of price optimisation
system company can increase their overall profit. In this regard company is required to evaluate
market as well as consumer behaviour regarding to products and service. Thus, with the help of
inventory management system Essentra Packaging can able to make an increase within there
sales margin and can further able to use their resources as to set best effective price range for
their products.
Inventory management system -
As to effectively manage organisational functions and activities related to manufacturing
and production it is important for an organisation to manage their inventory and stock and keep a
proper track on organisational resources. This will aid company to effectively utilize
organisational resources that simultaneously benefit them to check a regular track on their
inventory and production ratio. With the help of this organisation can effectively able to operate
their functions in best effective manner along with this company can lower down their overall
level of wastage and further produce products and services in cost effective manner. In addition
with this, Inventory management system allow Essentra Packaging to effectively check their
inventory segment and control use of raw material as to utilize them in best effective manner as
to increase overall productivity of organisation. It further aid company to record their level of
wastage as to further formulate strategies in order to control excess wastage. There are numerous
form of techniques defined below that will aid organisation to manage their ratio of inventory.
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 LIFO – As per this method stock which come last will goes out first. Thus, LIFO is
simply last in first out.
 FIFO – There are stock coming first and sale out first. Thus, it depends that in FIFO
method first in first out take place.
 AVOC – It is calculating cost of inventory on average basis.
Cost accounting system –
Cost accounting system effectively provide number of benefits to organisation, as with
the help of this they can concentrate of organisation cost input of different activities that in turn
allow them to effectively make an increase organisation overall profitability ratio. This form of
accounting system include various set of activities such as evaluation, understanding, summarise
of cost of goods and service. In addition with this with the help of cost accounting system
Essentra Packaging can able to conduct their operations within estimated cost with the help of
which company can see significant increase in their level of productivity which in turn lead
organisation towards increase in profitability.
Job costing system –
Job costing system aid organisation to make an evaluation of their overall rate of
expenditure that occurred in the time of particular job. With the help of this company can
effectively able to perform their operations by evaluating every single detailed information
related to cost within an accounting period (Hilton and Platt, 2013). Along with this, job costing
system allow Essentra Packaging to extract information which is linked with assigned job.
Mentioned below there are some information and data that can be evaluated by organisation
with the assistance of job costing system that are defined below:
Direct material –
Direct material is one of the most important element in within variable cost as this assist
an organisation to have a track on their production unit level as to effectively manage cost that is
required to be allot in a particular job.
Direct labour –
In this factor labour cost can be effectively able to track specific related job. This will
further help to complete their time as per accordance with time sheet.
Overhead -
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