Management Accounting: A Comprehensive Analysis of Dairy Crest Group

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Management Accounting
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Table of Contents
Introduction.................................................................................................................................................3
LO1.............................................................................................................................................................4
Management Accounting Systems...........................................................................................................4
LO2...........................................................................................................................................................14
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income statement using
marginal and absorption costs................................................................................................................14
M2 Accurately apply a range of management accounting techniques and produce appropriate financial
reporting documents..............................................................................................................................14
D2 Produce financial reports that accurately apply and interpret data for a range of business activities.
...............................................................................................................................................................18
LO3...........................................................................................................................................................20
P4 Explain the advantages and disadvantages of different types of planning tools used for budgetary
control...................................................................................................................................................20
M3 Analyse the use of different planning tools and their application for preparing and forecasting
budgets..................................................................................................................................................23
LO4...........................................................................................................................................................25
P5 Evaluate how organizations are adapting management accounting systems to respond to financial
problems................................................................................................................................................25
M4 Analyse how, in responding to financial problems, management accounting can lead organizations
to sustainable success............................................................................................................................28
LO 3 & 4...................................................................................................................................................29
D3 Evaluate how planning tools for accounting respond appropriately to solving financial problems to
lead organizations to Sustainable success..............................................................................................29
Conclusion.................................................................................................................................................30
References.................................................................................................................................................31
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Introduction
Dairy Crest Group is a primary British dairy things association set up in 1981. It's home office
are Esher, Surrey, United Kingdom. Its brands fuse Cathedral City cheddar, Country Life
margarine, Utterly Butterly, Vitalite and Clover. It was recorded on the London Stock Exchange
until it was picked up by Saputo in April 2019. Until December 2015, the association used to
practice & vend milk in rebate & by methods for access movements & had the Frijj milkshake
product. These were sold to Germany's Müller for £80 million. In this task, the discourse is made
on the fundamentals of the administration bookkeeping which apply to the more broad business
condition and the affiliations which work inside that condition. The examination is been done on
the board accounting uses financial data to help organizing, fundamental initiative, checking and
controlling of cash inside business affiliations.
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LO1
Management Accounting Systems
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Management Accounting System produces reports that are integrally used by managers of the
company. It supports decision making and also determines the way of running a business in an
efficient manner. Includes cost analysis, budgeting, reports, etc.
Management Accounting is referred to as a study of management aspects in accounting. It
supports the management in creating policies, implementing controls, and also aims to maximize
the profits in business.
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There are mainly four types of Management Accounting System: Job Costing System, Price
Optimization System, Inventory Management System, Cost Accounting System
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Job Costing System: To determine the cost and the profit or loss on every job, To control costs
by comparing the accurate cost with feasible costs, To provide a foundation for determining the
cost of identical jobs to be carried out in future.
Prize Optimization System: Used to determine the response of customer for a different price for
goods and services by various channels, Data used in this system comprises survey data,
inventories, operational costs, and extraordinary prices & sales.
Inventory Management System: It is feasible and used to preserve a healthy warehouse as well as
to track all the deliveries and orders.
Cost Accounting System: Helps the organization in estimating the actual cost of product while
examining inventory, company profits and cost control, helps in decision making
The main cost counting systems are:
Job Costing system: It is suitable for organizations that are engaged in manufacturing of
exclusive products and distinctive orders.
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Process Costing: It is suitable for products whose creation is a process comprising various
responsibilities and costs flow across the departments.
Managerial accounting report typically used to make decisions and also in planning and
monitoring operations. Also supports eliminating product lines.
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Majorly three methods of Management Accounting reports are:
1. Oral Reporting
2. Graphic Reporting
3. Written Reporting
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1. Oral Reporting: Helpful to a limited extent, It is less expensive, Quicker mode of reporting
2. Graphics reporting: Presented in the form of Charts, and Diagrams, Most effective method of
reporting, Helps in eliminating confusions
3. Written Reporting: presented in the form of a circular or a manual or a letter, also used as
reference sources
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Budgeting Reports Account receivable aging reports, Job Costing reports, Performance reports,
Order information report, A business situation report
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