Management Accounting Analysis: Systems, Reporting, and Methods

This report provides a comprehensive overview of management accounting, defining it as the analysis of business costs to facilitate reliable and profitable organizational decisions. It explores various management accounting systems such as price optimization, cost accounting, inventory manageme...Read More

Management
accounting
(Task-1)

Content
 Introduction
 Management accounting system
 Different types of management accounting system
 Benefits of management accounting systems
 Critical evaluation
 Management accounting reporting
 Different methods used for management accounting reporting
 Conclusion
 References

Introduction
Management accounting is defined as a procedure of
analysing business cost recorded under the financial
statement so as to make reliable and profitable
decision for an organisation. For this, accounting
manager need to provide an adequate support to the
management in terms of giving relevant information
about current financial position of company.

Management accounting system
Management accounting is a process of making an effective decision
for the betterment of an organisation by analysing the financial
information of company taking books of accounts into
consideration. It is the way of analysing business cost by
summarising financial statements of an organisation

Different types of management accounting
system
Price optimisation system: This system is used by the organisation in
order to minimise the prices of the goods so produced by the
organisation. This help Prime Furniture to determine the cost of the
units produced by them. This further help the managers of Prime
Furniture to decide the prices for their customers. Price optimisation
system helps the Prime Furniture to compete their project in the cost
that they have quoted to their customer for the projects

Benefits of management accounting systems
Management accounting system Benefit
Cost accounting system It is used by the Prime Furniture to analyse the different costs
associated with direct materials, labour and other direct
expenses.
Inventory management system This system is applied in Prime Furniture to manage the
inventory used in manufacturing process by their managers so
that they can monitor the cost.
Price optimisation system Prime Furniture uses this system to determine the prices of the
building they have to provide to the customers which are based
on the expectations of the clients and the estimated cost
provided by the constructor.
Job costing system Prime Furniture uses this system as it helps them to determine
the cost of different activities individually.

Critical evaluation of process through which
management accounting system and reporting
integrates at organisational context
There is somewhere linkage between management accounting and
reporting system as the using or preparation of these kinds of report
or systems depends on each other. For an instance, cost accounting
system provides information about the total business cost which
further be recorded under the cost accounting report. The reliability
and accuracy of cost accounting report is very much based on cost
accounting system.

Management accounting reporting
Management accounting reporting: It is considered as a process of
recording business transactions occurred on daily basis. This will
require support from managers to maintain reports containing all
financial information so that the performance of an organisation can
be easily analysed and compared with previous year performance.

Different methods used for management
accounting reporting
Cost accounting report: It is a document specifying information
related with amount invested in different business operations so that
allocation of cost can be done with an expectation of getting
maximum return in future. The manager of Prime Furniture can use
such kind of report to prepare an effective budget in which
allocation of funds can be done according to the requirements.

Conclusion
From the PPT it can be concluded that operational management principles
helps the organisations in monitoring, controlling, planning and
managing all the processes that are associated with manufacturing and
production of goods and services. These principles play an important
role in delivering quality items to customers so that their satisfaction
can be enhanced which will help the company in being ahead of the
competitors.

References
Damodaran, A., 2012. Investment valuation: Tools and techniques for
determining the value of any asset (Vol. 666). John Wiley & Sons.
Fowzia, R., 2011. Strategic management accounting techniques:
Relationship with business strategy and strategic effectiveness of
manufacturing organizations in Bangladesh. World Journal of
Management. 3(2). pp.54-69.
Garrison, R.H. And et. al., 2010. Managerial accounting. Issues in
Accounting Education. 25(4). pp.792-793.

Thank You