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Unit 5 Management Accounting


Unit 5: Management Accounting HND Business Management

Aim of Unit 5 Management Accounting

The main aim of the module is to introduce the basics of “management accounting” and the techniques that can be followed by the company to execute all the operations correctly. There are various operations that come under management accounting such as “decision-making planning, monitoring and controlling the financial budget”.

Learning Outcomes

LO1 Demonstrate an understanding of management accounting systems

“Management accounting” can be described as the process of calculating all finance-related operations. Apart from that, there are many other operations that are interlinked with “management accounting” is to prepare a financial analysis program. It is essential as it helps to convey data regarding the overall “health and well-being” of a firm to the outer parties. The entire process of financial accounting was introduced within the span of the “Roman Empire” the state had comprehensive records of their money.

LO2 Apply a range of management accounting techniques.

In this context, the cost can be described as the monetary calculation. There are various components if the cost analysis “effort”, “material”, “resources”, “time and utilities consumed”, “risks incurred”, and “opportunity regarding the production and delivery of a good or service”. In the case of “fixed cost”, the overall production and operation cost is the same throughout the entire process whereas in the case of “variable cost”, the initial costing and end cost are completely different from one another. In this context, another essential part is “inventory management”, “Valuation methods”, “Cost variances” and “Overhead costs” calculation.

LO3 Explain the use of planning tools used in management accounting

The term “estimation” can be described as the process of estimation of money. Budget in “management accounting” can be classified into four different parts such as “incremental”, “activity-based”, “value proposition”, and “zero-based”. Moreover, two main components of the budget are “capital” and “operating budget”.

Even pricing strategy implementation is also an essential component of budget planning. Competitors basically set the price of the product after a thorough market research. This technique also helps the company to improve its sales and intensify the overall business performances.

Furthermore, the “accounting technique” is also divided into three parts “Actual costing”, “Normal costing” and “Standard costing systems”. Cost activities in “management accounting” is divided into four parts and the application of all the parts are different from each other. Parts are “job costing”, “process costing”, “batch costing” and “contract costing”. Moreover, to understand the operations and the pricing strategy of the company PEST, SWOT and PORTER’s analysis is performed.

LO4 Compare ways in which organisations could use management accounting to respond to financial problems

The term “financial governance” can be described as the path that the company follows to gather, control, analyse, and regulates all the information that is related to finance of the company. The basic characteristics of an efficient administration accountant include “verifiability”, “objectivity”, “timeliness”, “comparability”, “reliability”, “understandability” and “relevance”. This technique helps the company to secure and evaluate financial data that are interlinked with the budget.

Learning Outcomes and Assessment Criteria

Pass Merit Distinction
LO1 Demonstrate an understanding of management accounting systems  
P1 Explain management accounting and give the essential requirements of different types of management accounting systems. M1 Evaluate the benefits of management accounting systems and their application within an organisational context. D1 Critically evaluate how management accounting systems and management accounting reporting is integrated within organisational processes.
P2 Explain different methods used for management accounting reporting.    
LO2 Apply a range of management accounting  
P3 Calculate costs using M2 Accurately apply a D2 Produce financial
appropriate techniques of range of management reports that accurately
cost analysis to prepare accounting techniques and apply and interpret data
an income statement produce appropriate for a range of business
using marginal and financial reporting activities.
absorption costs. documents.  
LO3 Explain the use of planning tools used in management accounting  
P4 Explain the advantages and disadvantages of different types of planning tools used for budgetary control. M3 Analyse the use of different planning tools and their application for preparing and forecasting budgets. LO3 & 4 D3 Evaluate how planning tools for accounting respond appropriately to solving financial problems to lead organisations to sustainable success.
LO4 Compare ways in which organisations could use management accounting to respond to financial problems  
P5 Compare how organisations are adapting management accounting systems to respond to financial problems. M4 Analyse how, in responding to financial problems, management accounting can lead organisations to sustainable success.  

This unit links to the following related units:

Unit 2 Computer Systems
Unit 1 Business Skills for e-Commerce
Unit 46 Social Media Practice
Unit 45 E-Commerce & Strategy
Unit 44 Pitching and Negotiation Skills
Unit 43 Tapping into new international markets
Unit 42 Planning for growth
Unit 41 Brand management Assignment HND
Unit 40 International marketing
Unit 37 Consumer behavior and insight
Unit 38 Customer value management
Unit 39 Sales management
Unit 47 Business Intelligence
Unit 34 Business Systems
Unit 35 Developing Individuals, Teams and Organisations
Unit 33 Business Information Technology Systems
Unit 32 Business Strategy
Unit 31 Statistics for Management
Unit 30 Taxation
Unit 10 Financial Accounting
Unit 9 Entrepreneurship and Small Business Management
Unit 8 Innovation and Commercialization
Unit 7 Business Law
Unit 36 Human Resources
Unit 12 Organizational Behavior
Unit 11 Research Project

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