Management Accounting Report: Techniques, Tools, and Analysis

This report delves into the realm of management accounting, focusing on its application within the Marsh organization, a small-sized financial services and risk management company. The report encompasses various aspects of management accounting, including cost accounting systems, price optimization, and inventory management. It explores different reporting methods such as performance reports, cost managerial accounting reports, and budget reports. Furthermore, the report analyzes cost techniques, specifically absorption costing and marginal costing, and demonstrates their application in preparing income statements. Additionally, it examines the advantages and disadvantages of various planning tools used in budgetary control, such as contingency planning, flexible budgets, and forecasting tools. The report concludes by contrasting organizations and how they adapt management accounting systems to overcome financial issues, particularly cash flow problems and risk management. The report provides insights into how Marsh can enhance financial decision-making and improve performance.

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Justification of management accounting with effective needs of various form of
management accounting systems................................................................................................1
P2 Various methods for management accounting reporting.......................................................2
TASK 2............................................................................................................................................3
P3 Particular cost techniques for prepare the income statement by using absorption and
marginal cost...............................................................................................................................3
TASK 3............................................................................................................................................8
P4 Advantages and disadvantages of various kinds of planning tools which is used by the
budgetary control........................................................................................................................8
TASK 4..........................................................................................................................................10
P5 Show the contrast of organisations by adapting management accounting systems to
overcome financial issues.........................................................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is also known as managerial accounting by which managers can
use the different kind of accounting information from various sources in order to provide better
information to their employees within the company. Along with this, it is one of the best
provision of finance and decision making information to the managers within the non financial
terms. It also involves in the decision making in regards with management decision and
financing report in order to control the performance management system as well as implement on
effective and innovative strategies in a proper way. In this present report Marsh organisation has
been taken which is based on small size organisation and having some employees, it is
headquartered in New York City and provide financial services as well as risk management
(Adler, 2013). Contentious discussion will be made on management accounting systems and few
techniques of cost analysis for preparing the income statement as well as absorption cost. At last,
planning tools and differentiate the system of accounting in regards with financial problems will
get covered.
TASK 1
P1 Justification of management accounting with effective needs of various form of management
accounting systems.
Management Accounting: It is an very effective and essential aspect and sum total of all
accounting concept in relation with internal activities of business in a proper way. In reference
with Marsh they have effective tools and techniques so that they always able to adopt current
activities in order to collect several kind of accounting systems, which are given below:
Cost accounting system: On the basis of this, respective company is able to explain the
effective variable cost as well as product and their fixed prices. Apart from this, cost accounting
is mainly helpful for collecting appropriate information in regards with particular goods and
services. In order to achieve more benefits it makes unique financial services.
Price optimisation system: According to this accounting system present company is
able to identifying their unique products and than also able to identifying their pricing strategies
within the marketplace.
Inventory management system: According to this system organisation can easily track
goods by the whole supply chain system as it is operated by business entity in an effective
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manner. With the help of this company can cover their goods from any kind of issues like
changes in climate and so on. On the other side it also covers each and everything from
warehouse to shipping, production to retail as well as changes in stock and parts between.
Therefore it is easy for Marsh to offer better services to their customers.
P2 Various methods for management accounting reporting.
As per the above analysation this can be said that business is a very important aspect for
each and every organisation wherein, management accounting also plays a very important role as
it helps companies by giving them proper data in a right manner. With the help of management
accounting system business entity can develop proper tools and techniques and strategies as well.
By which they can influence people and able to get higher profit in an appropriate way (Bennett
and James, 2017). There are different types of monetary and non monetary funds by which
Marsh is responsible to follow few concept, those are given below:
Performance report:
It totally depends upon the different kind of performance which is given by the
organizations within the working place. Therefore, it is much beneficial for the companies by
which they can get ideas about their basics and able to reduce errors from their business
functions. In reference with Marsh, now they are able to give effective banking insurance
services and retail management services to people as per the current situation.
Cost managerial accounting report:
It is also based on the company’s performance and budget as well. By which Marsh can
give affordable services to their employees so that they can get higher satisfaction from the
financial small sized companies. Basically cost always depends upon the financial condition of
an organisation which is done after the calculation of overall expenses in a proper way. Along
with this, sometime it can be possible that selling ratio is low rather than the expenses so that it
influence company in a negative way so they faces lot of difficulties in to the working place.
Accounts receivable ageing report:
According to this report, company is able to gain overall information in relation with the
transactions of credit. On the basis of this company can transact their money on the behalf of
credit so that it is easy for them. In regards with Marsh they always shows the transparency in to
the working place so that they can easily achieve their goals.
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Budget report:
It is one of the best report towards the organisation in which Marsh can effectively
differentiate their actual and estimated performance in an effective way. With the help of this
respective company can get proper framework and able to formulate unique strategies for
gaining business objectives and goals for giving better performance to their customers.
Moreover, by developing proper strategies company is available to take advantages and earn
profit at higher level (Chenhall and Moers, 2015).
TASK 2
P3 Particular cost techniques for prepare the income statement by using absorption and marginal
cost.
Absorption costing: It refers to those techniques which is used to calculate overall cost
of an organisation that involves in fixed cost, variable cost and so on. Along with this it is also
known as costing method.
Marginal costing: It is expensive method which determine the variable cost as fixed
cost.
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Income statement by marginal costing method:
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Interpretation:
Interpretation: According to the above mentioned solving method, it has been examined
that organisation and cost-based method both are having the same income statement. As at the
time of marginal and absorption income is also same that is 50000.
Income statement by absorption costing method (when 5000 units sold)
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Income statement by marginal costing method( When 5000 units sold)
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Interpretation: According to the above numerical data it has been identified that in the
current period of time organisation faces lots of challenges from both marginal and cost
absorption method. At the time of absorption method overall amount of proper loss is 75000
while conducting the marginal cost than net loss is also same 75000.
Financial reporting document with labour and material variances:
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