Detailed Report: Management Accounting Systems at Prime Furniture

This report provides a detailed analysis of management accounting (MA) systems and reports, using Prime Furniture as a case study. It begins with an introduction to MA, highlighting its role in decision-making, cost control, and forecasting. The report then differentiates between management and financial accounting, outlining their objectives and focus areas. It explores various MA systems, including cost accounting, price optimization, job costing, and inventory costing, explaining their functionalities and benefits within the context of Prime Furniture's operations. Different types of MA reports such as budget reports, cost reports, performance reports, and inventory reports are also discussed. The report further examines the advantages and disadvantages of each MA system, along with how MA systems and reports are integrated to aid decision-making. Finally, it concludes by emphasizing the importance of effective MA systems for business success, particularly in measuring and evaluating processes, and monitoring performance through reports. The report includes references to relevant academic sources and online resources.

Management Accounting

Table of Content
 Introduction
 Different types of MA systems
 Types of MA Reports
 Benefits of MA system
 How MA system and management accounting reports are integrated
 Conclusion
 References

Introduction
 Management accounting (MA) is used to make decision by considering all the important aspects
such that manager uses this method to analyze the area of cost control and make improvement
actions as well.
 In the same way, current study is based upon a scenario of Prime Furniture who is planning to
start a training course for new interns.
 The presentation will describe different MA system used in Prime Funriture

Management Accounting (MA)
 MA is the process of preparing reports with regards to business operations that assist
managers to make long or short term goals.
 Further it also assist a business to follow its objectives by determining, measuring and
analyzing information.
 With the help of MA, Prime Furniture forecast about future regarding cash flows.

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 There are 4 main principle of management accounting in general. All four of them are as
follows:
 Management accounting generally used to influence the decision-making process of the
company in positive manner.
 Management accounting provides the relevance information from variety of different
source.

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Basis Management Accounting Financial Accounting
Systems At the same time management accounting
generally used to concentrate on how the
different system can be enhanced to generate
better sort of profit.
Financial Accounting generally used to cares about
generating a profit and not the overall system how
company work.
Objectives Help management by providing data that will
be used in planning and evaluating goals.
Its main aim is to disclose the end results of a
business and examine financial condition.
Focus It focus upon present and forecast for future It focus upon the history's report by considering
the present study.

Different types of MA systems
Price
Optimizi
ng
Cost
Account
ing
Inventor
y
Costing
Job
Costing
 Management Accounting system provide
insights information to company while
Managerial report provides data from internal
operations, thus, with combinations of both
aspects, company make decision and identifies
the deviations as well.

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Cost Accounting:
 This system is used by Prime
Furniture because it assist company to make
decision with regards to cost. Therefore, this
system measure and record the cost
individually and then take action accordingly.
Price Optimization:
 This system determine how a
consumer will react to different price for their
goods and services through different channels.
 Hence, with the help of such system, company
understand the buying pattern of a customer
and preference which in turn leads to increase
the profit.

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Job Costing:
 It is a method of recording the cost related to
labor, material and overhead.
 So, with this tool, owner of a company may
easily track the cost of each job and also
maintain the data which is relevant to
operations.
Inventory costing:
 There are many techniques used for inventory
such that economic order time and Just in
Time etc.
 Thus, through inventory costing, owner of
Prime Furniture control and overseeing the
use and storage of component that is used
during production of goods.

Different methods used for management
accounting reporting
 Managerial accounting (MA) reports are used
for planning, regulating, decision making and
analyzing the performance of a company.
 Thus, it gives information about day to day
functioning of Prime Furniture.
Types of
MA
Report
Budget
Reports:
Cost
reports:
Inventor
y
Reports
Perform
ance
Reports

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Budget Reports:
 With the help of this report, Prime Furniture
identifies the performance because it provide
information about the deviation takes place in
actual vs standard aspect.
 Also, the current report present company's
budget list in relation to earning and
expenditure. Hence, with the set budget, quoted
firm tries to attain the goals or mission.
Cost reports:
 This report describe the information about cost
utilized while performing different activities.
 Through this, Prime Furniture's owner determine
the expenses with regards to offering service to
each customer and generate profit as well.

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Inventory Reports
 This report is most significant in the context of
Prime Furniture because it contain information
related to available stock in a firm.
 Hence, through this, quoted company determine
the level to which an inventory is used, sold or
replaced within a specific tenure.
Performance Reports
 Through this report, owner of Prime Furniture review the
performance of company on quarterly and monthly
basis.
 So, manager uses this report to make a strategic decision
about future of a firm, further individuals are often
awarded for attaining the set goals while training
sessions are conducted for those employees who are
under-performance.