Management Accounting and Reporting

Management
Accounting

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Explanation of management accounting and providing the essential requirements of
various forms of management accounting system..................................................................4
P2 Explanation of different methods used for management accounting reporting................6
TASK 2............................................................................................................................................8
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs......................................................................8
TASK 3............................................................................................................................................8
P4 Explanation of the advantages and disadvantages of various forms of planning tools used
for budgetary..........................................................................................................................8
TASK 4............................................................................................................................................9
P5 compare how companies are adapting management accounting system for responding to
financial issues........................................................................................................................9
Conclusion.....................................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Management accounting is defined as the procedure of preparing reports about business
operations that assist higher authorities to make long term and short term decision. In addition to
this, management accounting is basically branch of accounting which refers to the execution of
professional understanding, tools, techniques, concepts and skills for the preparation of
accounting information in a manner which facilitate the development of plans as well as policies
by the management, utilization of resources optimally, control on the operations, satisfying
stakeholders, and taking effective decision. It is state that the users of accounting statements are
mainly the internal management committee of the company. Both the non-financial and financial
factors are involved in this type of information. Management accounting facilitates in identifying
the areas which health management committee do develop corrective measures in order to
overcome the issues and improve operational efficiency (Chaudhry and Amir, 2020). It is related
to the preparation of accounting in formation in relation to professional skills and knowledge do
too which the availability of funds is easily being provided. According to the American
Accounting Association, management accounting is the process as well as concept that is needed
for the successful procedure of planning which help a company in selecting the best alternative
among different available options, then controlling as well as interpreting its results.
The present report is based on the case study of connect catering services. It is a catering
business unit that is founded by John Herring in the year 1989 and its head office is located in
Oxfordshire, UK. The report will cover about the concept of management accounting and the
various type of accounting systems will stop in addition to this, there is description of various
methods used for management accounting reporting. Moreover, the cost is calculated by using
appropriate techniques of cost analysis in order to prepare income statement using absorption
cost and marginal cost. Furthermore, the advantages as well as disadvantages of different forms
of planning tools used for budgetary control is elaborated. In the last, there is comparison of how
companies are adapting management accounting system in order to respond financial issues or
problems.

TASK 1
P1 Explanation of management accounting and providing the essential requirements of various
forms of management accounting system
It is the process of creating organizational objectives and goals by quantifying,
interpreting, inspecting as well as communicating instruction to the managers is known as
management accounting. It also facilitates the decision-making for the higher authorities’ by
giving them the financial information and resources. It helps the management in efficiently and
effectively perform all the operations and monitored them in a proper manner. Management
accounting includes timely preparation and providing of financial statements of an organization
to the stakeholders (Englund and Gerdin, 2018). Moreover, this reports are generally developed
for the internal stakeholders of the organization that are not highly concerned towards report.
The management accounting report includes sales revenue generation, availability of cash,
present status of account receivable and payable and many more.
The origin of management accounting is in the form of financial accounting, also there is
high difference among these two. The management accounting is more advantages, therefore is
used widely. The difference among financial accounting and management accounting is given
below:
Basis Managerial Accounting Financial Accounting
Content It is associated to the both
forms of data that is financial
as well as non-financial.
Financial accounting is only
associated with the data that
consist of financial information.
Uses and Purposes Managerial accounting is
mainly used by the internal
stakeholders in order to take
appropriate decisions.
It gives information that are
essential for stakeholders of
organisation which facilitates
decision making associated to
interests.
Rules, Regulations and Laws It does not consist of any form
of law compliance as these are
developed only for the internal
management committee of the
The different rules as well as
regulations are to be monitored
and followed by the company
accountant at the time of