Question: You work as a Management Accounting officer in a small and medium organization operating in either a Manufacturing, Retail, Hospitality or Construction sector with not more than fifty (50) employees and an annual net turnover not exceeding £500,000.
Management accounting plays a key role in organizations today and therefore decision makers in the organization must understand how to create and use good management accounting information. In today's business environment, business wants to track performance information that goes beyond just the cost-based information of historic general ledger systems provided by traditional financial accounting information. Good management accounting involves a responsibility to manage a wide variety of critical management accounting information using management accounting system and management accounting techniques such as cost-volume- profit analysis, marginal costing and absorption costing to produce relevant management report for informed decision making.
This was the summary of the speech delivered by a conference speaker about the role of management accounting and management accounting system in an organization. The General Manager of your organization sees management accounting function as very crucial in providing management information well informed decision making within the organization. Knowing that you are studying management accounting at the HND level, the organization sponsored you to attend this conference. After this conference the General management has asked you (Management Accounting Officer) to write a report to him covering management accounting and management accounting system together with different costing techniques and reporting to enable the organization implement them.
Explain management accounting and give the essential requirements of different types of management accounting systems to the chosen scenario giving examples. Explain different methods used for management accounting reporting that can also be used for the chosen scenario. (1000 words).