Management Accounting Report: Techniques for Financial Problem Solving

This report provides a comprehensive overview of management accounting, encompassing various techniques and tools essential for financial analysis and decision-making. It begins with an introduction to management accounting, highlighting its role in analyzing financial activities and supporting managerial decisions. The report then delves into the calculation of production costs and the preparation of income statements using both marginal and absorption costing techniques, including detailed calculations for opening and closing inventory using the FIFO method. Furthermore, it explores the advantages and disadvantages of different planning tools used in budgetary control, such as fixed, flexible, incremental, and zero-based budgets, along with pricing strategies and variance analysis. The report also evaluates the adoption of management accounting systems to address financial problems, discussing tools like ratio analysis, key performance indicators (KPIs), benchmarking, and the balanced scorecard. Overall, the report aims to provide a thorough understanding of how management accounting principles can be applied to improve financial performance and achieve sustainable success.

TOPIC:
Management
Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P3 Calculation of cost of production and preparation of income statement using marginal and
absorption costing techniques.....................................................................................................1
P4 Advantages and disadvantages of various planning tools of the budgetary control..............4
P5 Evaluating adoption of management accounting system to respond to financial problems. .6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Management accounting is a branch of the management in which the managerial
accountant analyses all the financial activities of the business organisation. further, in the process
of management accounting, the managerial accountant summarised each detail related to the
financial activities of the company and transfers to the managers as to help them in taking their
decision regarding financial activities of the business. The present study shows disadvantages
and advantages of different types of tools of planning that are used for budgetary control
arrangement and their application in preparation and forecasting various budgets of the company.
Further, the study also shows an explanation about various management accounting techniques
that can be used by the managers in order to enable the company in responding to various
financial problems and helping the whole company in achieving a sustainable success as well.
MAIN BODY
P3 Calculation of production cost and income statement with the help of absorption and marginal
costing techniques
calculation of opening and closing inventory using fifo method
particular
Opening stock
(a)
Produ
ction
(b)
Sales
(c)
Closing
stock
(a + b- c)
Year 1 0 40000 36000 4000

Year 2: Closing stock calculation
particular
Opening
stock
(a)
Productio
n
(b)
Sales
(c)
Closing stock
(a + b- c)
Year 2 4000 48000 4000
36000 12000

Year 3: Closing stock calculation
particular
Opening
stock
(a)
Productio
n
(b)
Sales
(c)
Closing
stock
(a + b- c)
Year 3 12000 51000 12000
48000 3000