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Introduction

The management accounting is the important tools which are used by the company to make their business operation decisions more effectively and its methods are used to measure the company performance. It basically comprises the explanations about the different management accounting systems and their elements for smooth functioning of the business activities which are integrated with the management accounting reporting. This report also involves the various useful planning tools which are used for budgetary control as to measure and monitor the company’s performance appraisal (Amoako, 2013). A comparison is provided to reflect that how the company can use the MA tools and techniques for appropriate implementation and execution. Under this report, Tech (UK) Ltd use the essential tools and techniques of the management accounting to solve out the department managers complained about the deficiency of financial information to better their decision-making. Under this report, the company will also prepare the management accounting reports for making the decisions in an efficient manner.

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Task 1

P1:

It is the process which is followed by the company for examine the business costs to form internal financial reports, records and helps the management to frame the business decisions effective and efficient for achieve the predetermined objectives and goals. The accounting information which is obtained by doing analysis helps in financial accounting (Management Accounting, 2017). The management accounting assists the company’s management in the formulation of policies, procedures, in the decisions and also helps in daily operations of the business.

1. Distinguish Between Management Accounting And Financial Accounting:

The numerous comparisons in between the financial and MA which are explained as under:

  • This accounting used within the organization by the managers and employees whereas external users use the financial accounting for the decision making about the investment in the company’s business (Vinayagamoorthi and et. al., 2012).
  • The management accounting does not apply any rules or standards for the accounting while on the other hand, the financial accounting is worried with a different set of rules and regulations which are relevant to the company.
  • The management accounting uses the financial and non-financial information for making the reports and other useful documents whereas the financial accounting use only and only the financial information for preparing the financial statements.
  • The management accounting use only data which are historical, current, and future- oriented whereas the source of data is historical associated to the previous year performance in the financial accounting.

2. The Importance Of Management Accounting Information As A Decision-Making Tool For The Department Managers Which Are Discussed Below: Management accountants utilized the various tools and techniques for planning which helps in the decision- making process. They also focus on the main criteria of the business operations like revenue growth, productivity growth and efficient and effective utilization of assets.

3. Cost Accounting Systems (Actual, Normal And Standard Costing): This system assists the company to determine cost of the product. This system is used by the management of the company for lowering down their working expenses and similarly controls them in an effective manner. This is the type of accounting system which assesses about how an organisation is doing and benefits managers to form decisions which is relied on the costs of doing operational activity (Macinati and Anessi-Pessina, 2014). This system requires five basic parts. These are inventory valuation technique, input measurement basis, accost accumulation method, accost flow assumption, and a capability of recording cost flows at particular intervals.

4. Inventory Management System: This system keeps track the goods via whole supply chain or the portion of the goods used in the business operations. It covers everything from the production to retail, all the movements of inventory, etc. Management of TECH (UK) LTD. can be consolidated with this type of system to attain all the targets by efficient flow of stocks in the business manufacturing operations.

5. Job Costing Systems: This needs to collect direct materials, direct labour and overheads in an effective manner. Here are certain tools which could be implemented by the organisation for gaining sustainability. Tech (UK) Ltd can implement this system at the time when products are identical for tracking of the order expenses.

P2:

1. Diverse Kinds Of Management Accounting Reports:

Budget Report: This report lay out the plan to investigate the organization performance at the time of creating evaluation about the department’s performance and also control the costs. For preparing the budget, the actual expenses which incurred in the past years get utilized (Lim, 2011). Forecasting the future budget based on this report which assists the company to consolidate the attempt of various departments towards the company goals and objectives.

Job Cost Report: The job costs reports are basically concerned with identify the profits, costs, and expenses of each specific job. This report also makes evaluation of the cost at the time of project is work- in- progress henceforth, the waste areas can be engaged in consideration and the project can be completed more profitable to the company. All the efforts of the company are described in this report which helps the manager for future jobs.

Inventory Report: The Company’s business operations are involved in the manufacturing processes is required to prepare the report so that their inventory and manufacturing processes can be more efficient and effective. This report which is prepared by the company in order to track the inventory level and make them accordingly in order to smooth running of business o

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