Management Accounting Systems and Reporting for Prime Furniture

This report delves into the realm of management accounting, defining it as a crucial methodology that aids business organizations in making informed decisions by considering both financial and non-financial information. The report focuses on Prime Furniture, an East London-based company, and explores the requirements of various management accounting systems such as Cost Accounting, Inventory Management, and Job Costing Systems. It examines different methods used for management accounting reporting, including inventory management reports, accounts receivable aging reports, and performance reports. Furthermore, the report highlights the benefits of management accounting systems, such as aiding in cost reduction, effective inventory management, and optimizing pricing strategies, ultimately contributing to improved decision-making within an organizational context. The report also includes a comprehensive list of references from various books and journals.

Management Accounting
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Management accounting and essential requirements of different types of management
accounting systems......................................................................................................................3
Different methods used for management accounting reporting..................................................4
Benefits of management accounting systems and their application within an organisational
context.........................................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
Management Accounting can be defined as methodology, which aid a business
organisation in making appropriate determinations considering both financial and non financial
information (Carlsson-Wall, Kraus and Karlsson, 2017). This is specifically done through
recording audits and other financial data on paper so that a company could effectively take
valuable decisions. Under this report, Prime Furniture is taken into consideration which is one of
a growing East London based company. Including this, report will consider requirements of
various management accounting systems, methods utilised for accounting report and lastly,
benefits of management accounting system will also be discussed.
MAIN BODY
Management accounting and essential requirements of different types of management accounting
systems
The term “Management Accounting” referred to stipulation of fiscal information, that
helps in advising an organisation to conduct daily operations, distribution of funds and at the
time of taking appropriate determinations for the betterment of company. If it is talk about,
Prime Furniture then it is required by it's existing and new staff of financial departments about
different accounting systems that can be taken into consideration and some of these are presented
underneath:
Cost Accounting System: This type of system, can also be considered and named as
commodity pricing method that is being taken into consideration by a company when it comes to
pull out estimation cost of different products. Focusing on this system, Prime Furniture can
effectively conduct a range of actions like profitability assessment, cost regulation & product
assessment as well. Away with this, it has also been analysed that considering Cost Accounting
System, Prime Furniture can reduce the additional cost to minimal which would aid firm in
taking right decisions in relation to distribution of funds (Goh and Scerri, 2016).
Inventory Management System: Another crucial system, which can be utilised by
Prime Furniture, at the time of managing inventory in much effective manner. It specifically may
aid Prime Furniture in balancing both demand along with the supply of final products. It has
been found that, considering this system, Prime Furniture could effectively meet all the demands
of customers through filling the vacant areas within the store or warehouse.
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Job Costing Systems: One more crucial accounting system, which may aid a business
organisation in developing effective range of products through fulfilling vacancy job roles with
effective and qualified candidate among different departments of Prime Furniture. Through this
system, it can be said that Prime Furniture would easily take right decisions where finance
manager will consider actual cost involved on various operation and make certain plan to reduce
these cost if results are not appropriate (Golyagina and Valuckas, 2016).
Different methods used for management accounting reporting
In modern time, in order to manage accounting reporting Prime Furniture, could
effectively take into consideration of different method and some of these are presented
underneath:
Inventory management report: Basically, inventory management report is developed
for pulling or carrying out the amount of different materials that are stored within the store or a
warehouse. With the help of this, Prime Furniture could effectively make right decisions when it
comes to manage the cost of production unite. Basically, Prime Furniture may gain a number of
benefits of this report where data related to record the total raw material is being used to produce
different designer furniture. Furthermore, to record total product which are in production cycle
and total furniture which are ready for sales (West, 2018).
Account receivable ageing report: This report incorporates ageing related data about
those individuals (who borrowed the money) who have not reimburse the exceptional sum after
the reduction of time duration. With the guide of this company, it can easily be said that they
ought to permit card office to purchasers. If it is talked about Prime Furniture, then this
company's manager may take into consideration of this report, which will aid firm in recording
the aggregate sum remarkable with client and discover which client have not have instalment
after last date.
Performance report: This type of report basically consists of different elements like
expenditures and expected revenues that consists of direct contrast with both spending and
current revenue. It has also been analysed that considering this approach, performance within
Prime Furniture may effectively engage a number of job roles, which is impacting negatively on
the company's operations (.Mizikovsky and et. al, 2016). Under this, it is said that a finance
manager of Prime Furniture could effectively develop this type of report, where performance of
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every single individual could effectively enhance the current income or expenses while
conducting different business functions (Höglund and Sundvik, 2016).
Benefits of management accounting systems and their application within an organisational
context
Benefits of MA system
Name of management
accounting system
Benefits
Inventory management
system
This type of system directly consists of different benefits like it
aid in adjusting both demand along with the supply inside Prime
Furniture. Along with this, system also support in keeping up
adequate amount of final goods of Prime Furniture among various
warehouses or stores to meet the prerequisite of clients (Saleem
Salem Alzoubi, 2016).
Price optimisation system This framework is actualized to cause the most appropriate cost
of products and services that to can be utilized to build client base
and keep up enough benefit for Prime Furniture.
Cost accounting system By utilizing this framework, which may benefit Prime Furniture,
in taking out the activity which may include high expenses and
consists of less profitable results for the company so that profit
margins can effectively be improvised.
Job costing system This is predictable with the estimation of the cost, benefit and
misfortune execution of each work. In the above chose element's
Prime Furniture. they can analyse and breakdown all the
activities, which is related to cost (Qian, Hörisch and Schaltegger,
2018).
CONCLUSION
Considering the above mentioned report, it is summarised that managerial accounting
could directly aid an organisation in improvising the decision-making process of company.
Along with this, it is also concluded that different sorts of accounting system helps business
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companies in hitting their targets through performing different tasks like eliminating the cost,
maintaining the sufficient quantity of final products and services and so on.
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REFERENCES
Books and Journals
Carlsson-Wall, M., Kraus, K. and Karlsson, L., 2017. Management control in pulsating
organisations—A multiple case study of popular culture events. Management
Accounting Research. 35. pp.20-34.
Goh, E. and Scerri, M., 2016. “I study accounting because I have to”: An exploratory study of
hospitality students’ attitudes toward accounting education. Journal of Hospitality &
Tourism Education. 28(2). pp.85-94.
West, A., 2018. After virtue and accounting ethics. Journal of Business Ethics. 148(1). pp.21-
36.
Golyagina, A. and Valuckas, D., 2016. Representation of knowledge on some management
accounting techniques in textbooks. Accounting Education. 25(5). pp.479-501.
Mizikovsky, I. E. and et.al, 2016. Basic accounting and planning aspects of the calculation of
intra-factory turnover of returnable waste. Journal of Economic & Management
Perspectives. 10(4). pp.340-345.
Qian, W., Hörisch, J. and Schaltegger, S., 2018. Environmental management accounting and its
effects on carbon management and disclosure quality. Journal of cleaner production.
174. pp.1608-1619.
Saleem Salem Alzoubi, E., 2016. Ownership structure and earnings management: evidence from
Jordan. International Journal of Accounting & Information Management. 24(2). pp.135-
161.
Höglund, H. and Sundvik, D., 2016. Outsourcing of accounting tasks and tax management:
evidence from a corporate tax rate change. Applied Economics Letters. 23(7). pp.482-
485.
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