Nelson College - HND Business: Management Accounting Report - Analysis

This report provides an in-depth analysis of management accounting systems and techniques, specifically focusing on Airdri Limited, a manufacturing company. The report begins with an introduction to management accounting and its importance in decision-making, followed by an overview of the management accounting system, including price optimization, inventory management, and cost accounting systems. It then delves into various management accounting reports, such as inventory management reports, cost reports, and accounts receivable reports. Furthermore, the report explores cost accounting techniques, including marginal costing and absorption costing, providing insights into their application. The analysis is supported by references to relevant literature. This report is designed to assist in understanding accounting principles and their application in a real-world business context.

Task 1
Management Accounting

Table Of Content
Introduction
Management Accounting system
Management accounting report
Cost accounting techniques
Conclusion
References

Introduction
 Administration is classified into two parts: managerial and
administration, both of which are critical to managing an
organisation and establishing good decisions. It is important for
organizations to comprehend how to develop and profit in a
tough climate.
 This report based on the Airdri Limited company. It is
manufacturing organisation that provides services in dryers and
others things. In this report consist of different types of
accounting systems and reports to analysis the performance in
depth manner.

Management Accounting System
 Price optimization system: The contemplating element is price
determining that is major aim of company therefore price
optimization system is utilized by firms for the order to
determine the suitable charge of consumer items. This is
necessary for Airdri Ltd to assess operational prices and set
proper costs for their commodities and operations in effort to
engage buyers and keep successful commercial productivity in a
dynamic commercial environment.

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Inventory management system: This system is described as the
ordering, storing, and earning from items sold to consumers by a
commercial organisation. This can aid in the operation of a firm by
reducing unnecessary orders and managing good result. Airdri Ltd need
apply inventory control to maintain inventories and make orders for raw
materials and products so that purchasing orders can be fulfilled and the
organization can run smoothly. Since every company wants to satisfy its
consumers by fulfilling orders as quickly and operating constantly,
employing an inventory control may assist boost profit margins

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Cost accounting system: This is a system architecture that
businesses use to predict product costs and keep their profits in
check. Because the company provides a range of products, cost
estimate is critical for making future business decisions and
boosting revenue. This is necessary for Airdri Ltd to assess the
profitability and services so that they may plan their operations
effectively. If you have a thorough understanding of accounting and
historical data, you can make cost estimates that are accurate and
help you operate your firm more efficiently.

Management Accounting Report
 MA is a broad concept that stresses knowledge sharing; therefore
summaries are critical components of it. It presents a variety of
important reports that are also related to the systems described
above.
 This information should also be used by Airdri Ltd to
appropriately modify such systems. The following are many
important reports related to MA:

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 Inventory Management Report: It is important to monitor and
inventory levels as thoroughly and quickly as possible in order to
properly run a business. Using and preparing a stock control report is one
way to do otherwise. A trustworthy, speed, and suitable inventory
management analysis may assist users in determining patterns,
recognizing weaknesses and strengths, and correcting errors and
preventing inventory waste. Managers may use this information to
enhance profitability while lowering needless expenses. This, in the
instance of Airdri Ltd, allows the management team to watch inventory
levels and reduce inventory costs and waste

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 Cost Report: This report serves as a basic need for industrial
companies such as Airdri Ltd to control their costs incurred. This
analysis essentially reflects a thorough sub categorization of
various expenses, as well as several categories such as
department-specific costs, process-specific costs, activity-specific
costs, and so on. This analysis may be used by Airdri Ltd to
determine the expenses of creating dryers. The information in this
report would be used by management to reduce expenses and
increase profit margins.

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 Accounts receivable report: Accounts receivables are the amounts due to
an organisation by businesses for items sold on a credit terms. Accounts
receivables are typically handled by ordering supplies and shipping or
wirelessly distributing them to clients in most business organizations. In
return, the customer must pay within a certain time frame known as cost
limits. Accounts receivable age report generates a list of accounts
receivables based on credit limits and ageing that is, how long they have
been unpaid. A really report will assist Airdri Ltd in detecting difficulties
as soon as they arise and preventing major issues with account receivables
collections from regarding the date

Cost Accounting Techniques
 Cost: This is the amount of money spent by a company on the
research and manufacture of goods & services. In other respects,
cost is the amount of cash that buyers must spend when purchasing
anything that can assist a firm optimizes its success.
 Marginal costing: This is calculated by a costing approach in
which variable costs are applied to unit costs and fixed costs are
assessed for the time and wiped off fully towards participation.
This may aid in the management of a corporation's processes and
outcomes, as well as the proper organisation of all activities.

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