Management Accounting Tata Motors 

Executive summary

This report has highlighted the key facts of relevance of managerial accounting pertaining to the improvement of financial health of Tata Motors. The different types of managerial reports needed for accounting have been thoroughly discussed. This will help the company in reducing the negative customer feedback on company’s financial statements. The report will help the managers of Tata Motors. In improving the decision making process. Production of an income statement and the relevance of it in deciding the future growth of the company are done in this report.

LO1 Demonstrate an understanding of management accounting systems 

Management accounting system (P1)

The management accounting system is also termed as managerial or cost accounting that analyses the business operations and costs to prepare records, internal financial reports and also account to aid the managerial people's decision making process to achieve business goals. In these terms, it can be defined as the act of making sense of costing and financial data and translate it into useful information for the use of management and organization.

Andre et al. (2016, p.150) has defined accounting management as the presentation of accounting the available information, that in terms assist the management to create policies for day to day operation in an organization. The associated cost accounting and financial accounting phenomenon help the organization to formulate the policies, control, planning and decision-making process in the organization.

Major functions of management accounting 

There is four basic functions of management accounting system are listed below.

1 Planning:

Though this function, formulation of long term and short term plans and proper actions in this regard will be taken. In the budget, the financial planning has been done showing that the resources are used and acquired over a specified period of time interval (Anelli and Puglisi, 2015, p. 409). Management accounting is helpful in this case for planning activity as it provides information to the decision making process. This technique also helps in estimating alternative actions to be taken for achieving the desired financial goals.

2. Organising:

Organising is a process of assigning responsibility to the worker and establishing the organizational framework in the organization. This in term helps in achieving the business objectives and goals (Avenali et al. 2017, p. 130). Management accounting system helps the managerial people to organize necessary information by providing reports.

3. Controlling:

Control is a process of evaluating, measuring, monitoring and correcting the actual results of business plans. Management accounting system helps in producing control reports and performance reports and this highlights the variance between the actual performance and expected performance.    

4. Decision making:

Management accounting system contains valuable information of various courses of actions and predicts the results required to achieve business goals. 

Application of management accounting systems within an organisational context (M1)

This technique helps the Tata Motors to formally structure the decision problems and to place alternative consequences. Management accounting system also provides production report, sales report by the managers of Tata Motors through taking suitable actions about the production position (Cooper et al. 2017, p.995). Using this technique the managers of Tata motors will be able to decide whether to eliminate or add the product line and the production report. In Tata Motors the accounting management system helps the managers to identify more profitable products as well developed data for it (jaguar.in, 2018). Accounting management system helps to prepare budgeted financial statements.

Critically evaluation of integration of management accounting report and management accounting system within organizational process (D1)

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