Introduction to Management Accounting: Presentation

This presentation provides a comprehensive overview of management accounting, starting with its definition and importance in evaluating a company's financial performance. It explores various methods of management accounting reporting, including variance analysis, cost schedules, and budgets, along with the calculation of costs to prepare an income statement under both variable and absorption costing. The presentation delves into the core principles of management accounting, such as influence, relevance, value, and trust, and highlights the role of management accounting systems in stewardship and designing optimal capital structures. It further discusses the integration of management accounting within organizations, particularly through big data analytics and accounting information systems. Finally, the presentation outlines the benefits of management accounting functions, including capital budgeting decisions and scientific budget forecasting, concluding with a summary of key concepts and references for further study.

MANAGEMENT
ACCOUNTING
STUDENT ID:

TABLE OF CONTENTS
Name of Slide Slide
Address
Introduction 3
Management Accounting 4
Methods of Management Accounting Reporting 5
Calculation of Costs to Prepare an Income Statement 6
Principles of management Accounting 8
Role of Management Accounting and Management Accounting
Systems
9
Integration of Management Accounting in an Organization 10
Benefits of Management Accounting Functions to Organizations 11
Conclusion 12
References 13

INTRODUCTION
• This presentation is designed for facilitating knowledge about
management accounting systems.
• The focus of this presentation is also on application of the management
accounting techniques used in different organizations.
• It is also helpful in understanding the integration of management
accounting in a business organization. Finally, the presentation is
helpful in understanding benefits of different functions of the
organization.

MANAGEMENT ACCOUNTING
• Management Accounting:
• Management accounting can be defined as the branch of accounting
and financial management that deals in study and evaluation of
financial data of company in order to evaluate financial performance of
company and also to provide appropriate advice to company
(Blackwood, 2014).

METHODS OF MANAGEMENT ACCOUNTING
REPORTING
• Variance Analysis reports
• Cost Schedule report
• Budgets
• Accounts Receivable Ageing Report

CALCULATION OF COSTS TO PREPARE AN
INCOME STATEMENT
Income Statement According to Variable Costing
Particulars Details Total Value (in £)
Sales 81000000
Less: Variable Expenses
Direct Material Cost 400000
Direct Labor Cost 500000
Cost of supplies consumed 250000
Variable selling and distribution overheads 460000
Total Variable Expenses 1610000 1610000
Contribution Margin 79390000
Less: Fixed Expenses
Fixed Portion of Production Expenses 200000
Fixed Selling and Administrative Expenses 300000
Annual Insurance Cost 50000
Other Fixed Expenses 50000
Total Fixed Expenses 600000 600000
Net Profit 78790000

CONTINUED…
Income Statement Under Absorption Costing (in £)
Particulars Details Total Value (in £)
Sales 81000000
Less: Cost of Goods Sold 35000000 35000000
Gross Profit Margin 46000000
Less: Selling and Administrative Expenses
Variable selling and distribution expenses 1000000
Fixed selling and distribution expenses 2500000 3500000
Net Profit 42500000

PRINCIPLES OF MANAGEMENT ACCOUNTING
• Influence
• Relevance
• Value
• Trust

ROLE OF MANAGEMENT ACCOUNTING AND
MANAGEMENT ACCOUNTING SYSTEMS
• Management accounting and management accounting systems
perform the role of stewardship.
• Management accounting is also highly beneficial in designing optimal
capital structure for the company.
• Management accounting is also helpful in control mechanism due to
availability of variance analysis technique in the hands of management
accountants.

INTEGRATION OF MANAGEMENT ACCOUNTING
IN AN ORGANIZATION
• Integration of management accounting in seen in different organization
in the form of development and usage of big data analytics
management system.
• In addition to this, the management accounting is also integrated with
the accounting information systems and database management
systems within an organization.

BENEFITS OF MANAGEMENT ACCOUNTING
FUNCTIONS TO ORGANIZATIONS
• The benefits of management accounting function are visible in
organizations in the form of capital budgeting decisions, adoption of
optimal capital structure etc.
• Management accounting focuses on adoption of scientific forecasting of
budgets that ultimately contributes in increasing production or output
within the organization.

CONCLUSION
• On the basis of above presentation, it can be summarized that there are different
types of management accounting systems such as price optimizing system,
inventory management systems, cost accounting systems and the job costing
systems.
• There are different principles of management accounting such as relevance, value,
trust and the influence.
• Example of different roles and benefits of management accounting involves optimal
capital structure decisions, cost-volume profit analysis, scientific budget forecasting,
evaluation of financial performance and better control through variance analysis
technique.