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    Management Accounting 6HR503 University of Derby Level 6

    Introduction

    Management accounting is much beneficial to managers so that they are able to take better decisions. Present report deals with importance of management accounting information in Tech (UK) Limited which is engaged in production of special chargers for mobile, telephone and carry-on gadgets for retail outlets. Requirements of such accounting, various managerial reports are explained. Moreover, marginal and absorption costing methods are used to prepare income statements. Furthermore, kinds of planning tools are discussed along with advantages and disadvantages. Use of management accounting systems is explained for resolving financial problems. Thus, such information is helpful for management to take enhanced decisions.

    Task 1

    A) Management accounting and requirements of management accounting

    Managers are quite benefited by implementing this type of accounting as it helps them to take structured decisions in the best possible manner. Financial information is provided to the managerial personnel so that they may analyse financial performance and take better decision so that organisation may be strengthened internally and desired outcome can be generated in the market by garnering profits .(Ahadiat, 2013).

    Difference between financial accounting and management accounting

    Financial Accounting

    Management Accounting

    1. It is a branch of accounting which takes monetary transactions and final accounts are prepared.

    1. This accounting not only takes information of monetary transactions but non-monetary aspects are also taken into account and managerial reports are formulated.

    2. Financial statements are to be prepared in accordance to the format provided by Companies Act 2006

    2. No format is prescribed by professional body and a firm can prepare reports of any format as per their requirements.

    3. Financial accounting imparts detailed financials of company on various operational segments (Bennett, Schaltegger and Zvezdov, 2013).

    3. Managerial reports are summarised ones about financial health of firm.

    4. The financials are prepared usually at the end of accounting period.

    4. There is no specific period to prepare managerial reports. It is formulated as when need arises for the same by management.

    Importance of management accounting information to departmental managers for decision-making

    The management accounting information is quite significant of departmental managers so that they may be able to assess performance of units and take better decisions in order to improve upon the same if deviations exist. On the other hand, there are various departments in Tech (UK) Limited which are integrated with one another and required to perform well to inject overall efficiency (Chenhall and Smith, 2011). Finance, marketing, operations, production and HR are some departments of an organisation. A production unit provides reports in which amount of inventory needed is listed. This is then provided to finance department to evaluate whether resources are available to buy raw materials or not. Thus, all the units are interrelated with each other and performance is measured with much ease and as such, management accounting information assists departmental managers of Tech (UK) Limited to take enhanced

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