Management Accounting

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
Role and significance of Management Accounting System:.......................................................1
LO2..................................................................................................................................................3
Various reports to management accounting.................................................................................3
Application and Benefits of Managerial accounting System:.....................................................5
Critically evaluation of management accounting system and accounting reporting...................6
LO2..................................................................................................................................................7
Calculation of cost by using appropriate technique.....................................................................7
M2 Application of range of management accounting..................................................................8
Interpretation of data and range of activities .............................................................................9
LO3..................................................................................................................................................9
About planning tools that controls budgets.................................................................................9
Uses of different types of planning tools..................................................................................12
LO4................................................................................................................................................12
Organisation are adopting management accounting system to respond towards problem.......12
Respond to financial problems...................................................................................................15
Planning tools for responding financial problems.....................................................................16
CONCLUSON...............................................................................................................................16
REFERENCE.................................................................................................................................17

INTRODUCTION
Today's dynamic market is very competitive and create a new issue for the organizations
everyday. Most of these issues are related to the core operations and functions of the companies.
Financial accounting is just for the use of external stakeholders and able to provide any solid
solutions for internal core issues (Weetman, 2019). Therefore, a new accounting system has been
developed to provide the filtered data and adequate information to the internal management
system that is known as management accounting. An enhanced study of management accounting
can help in solving internal as well as external problems.
Rolls Royce Motor Car Limited is a British automotive establishment that has been
chosen for preparing this report. The organization was founded with its name in 1998 as a
subsidiary company of BMW and deals in manufacturing and distribution of luxury cars in
international market. This report is able to provide the information about the role of management
accounting, system that is developed by this framework, several reports which are created in this
system, assorted costing techniques, budget and budgetary control, financial problems and
techniques that can be utilised to solve those financial issues (Booth, 2018).
LO1
Role and significance of Management Accounting System:
Management Accounting - At the starting of 19th century, it has been felt by the big
manufacturing establishments that they need a system that can help them to handle internal
matters. Hence, an accounting system was created that collect, classify, filter, record, manage,
report and control all the financial and non-financial content in such a manner that administration
of the establishment can consider them as evidences for preparing plans, creating strategies and
making decisions regarding achievement of organizational goals. This framework has been
specially evolved for the internal stakeholders so that they can manage regular functioning.
Difference between management accounting and financial accounting
Basis Management accounting Financial accounting
Meaning This means to identify and classify
the information. An d also control
the business activities.
To identify the financial
information which are related only
money.

Aim The main aim is to provide
information to internal users
To provide information to external
users.
Needed In this reports and statement are
prepared on the basis of requirement.
Reports are statement are prepared
for a definite period such as
quarterly, monthly, half yearly and
annually.
Concentration It mainly concentrates on relevancy
and flexibility of data.
It mainly concentrates on
generating data accurately and
timely.
Managerial accounting is a crucial part of the organization as it plays significant role in
management. Some of its roles in Rolls Royce Limited are described below:
Monitor expenses - With the help of various techniques, statics and budgets, managers
are able to determine the actual cost centres and allocate the expenses. This helps in monitor and
control the expenses and utilize the valuable funds optimistically.
Maintain profitability - Management accounting provide various tools such as break-
even analysis, sales-volume ratio, etc. that helps the administration in evaluating the sales,
desired profit and other factors that assist it in maintaining the profitability of the firm.
Financial planning - This accounting system is also plays an important role in planning
financial strategies of the company by providing significant data and information to the financial
department of the organization so that it can make decisions regarding huge investments
(BARARI, BANIMAHD and YAGHOUBNEJAD, 2018).
Explain consequences - With the help of their knowledge, experience and skills,
managerial accountant may also explain the effects of any financial decision on the funds and
operations of the company. They identify the consequences of any activity on the budget.
Management Accounting System - The framework of managerial accounting divided
the process into different parts and developed systems for managing the assorted departments
and activities. The system that has been developed for managing the operations and deriving data
from them, is known as managerial accounting system. This system helps in preparing reports for

the management to make decisions. Some of the managerial accounting systems that are utilised
by the Rolls Royce Limited, are given below:
Inventory Management System - Inventory management system can be defined as the
combination of effective procedures and utilization of technology that monitor, maintain and
control the products or stock of the company. It track the stock from the process of purchasing
raw material to sold goods. An effective inventor management system requires information of
suppliers and distributors, integration with online marketing platform, order fulfilment and
management data, warehouse reports and automated inventory tracking software system that may
help in evaluating inventory with LIFO, FIFO or WAC method.
LIFO (Last In First Out) - This method suggests that the product that has been
manufactured first must be sold first so that retailing can be reflected accurately.
FIFO (First In First Out) - It assumes that the product which has entered into the
inventory last must be sold first (Murthy and Rooney, 2018).
WAC (Weighted Average Cost) - This method suggests that inventory must be evaluated
on an average cost of production.
Cost Accounting System - A cost accounting system is the most crucial and significant
part of managerial accounting process. This is the framework that is used by the business heads
to estimate and evaluate the costs and expenses, analyse the profitability of the company, stock
management and controlling the various costs. The costing system uses various costing methods
to evaluate the costs of assorted production lines. The system requires frequent and accurate raw
data, factory layout, production procedures, information of various cost centres, etc. to provide
and manage effectiveness to the production process.
Price Optimization System - Price optimization system is a statistical framework that
evaluate the variance in demand of the any product in relation to the fluctuation in the price
level. This system is utilized within the company to tailoring the prices according to the different
segments of the consumers. This system requires historical data, product volume, market
conditions, competitors' prices, seasonal conditions, product availability, etc. to make the
decisions regarding optimum prices.

LO2
Various reports to management accounting
Management accounting reports are written document which are prepared by
management in order to maintain proper records of transactions and data. It helps to know that
what is going on within business organisation. It is like summary report that gives explanation
about every transaction and performance of business industry. There are different types of
management report which are used by Rolls Royce Motor Cars Limited by collecting data that
helps to give valuable information regarding operations. In other words, the operation of
organisation may be smooth and controllable by preparing different types of accounting reports.
In context to Rolls Royce Motor Cars Limited, different types of management report are
prepared by management such as:
Budget report - Budget estimation is required at every stage within all organisation that
gives estimation about cost of activities and states how it can be control. It is important to
understand how much amount need to invest in organisational activities in order to run a
business. It is prepared by manager who have knowledge about expenses of organisation and can
be control to overcome by performing business performance. For instance, Rolls Royce Motor
Cars Ltd 's managers get the estimation of their expenses of each department that helps to
prepare a budget report. By using this budget report they can reduce the cost of organisation
which leads to profitability.
Account receivable Aging report - Credit purchase and sale of goods is the main
function of any business that helps to stable the enterprise in business market. It is important for
any business to offer a credit to its customers so, they be connected with organisation for long
period of time. This report covers date, time, amount and other information which is provided by
customers for paying credit amounts. In context to Rolls Royce Motor Cars Ltd, this report is
prepared by management in order to keep records of all credit transaction and data that helps to
receive the payment on specified time. Credit period involves 30, 60 and 90 days late to pay the
amount. This report is associated with different credit policies and legislation that aids to get
payment on time as customer has promise to pay (Burritt and Christ, 2017).
Cost accounting report - Cost structure is required in all businesses that covers cost the
business organisation during performing business activities. This report is highly connected with
cost of products and services that helps to evaluate the efficiency of organisation. Organisation

are running their businesses as have idea that states where money is being spent and how it can
be make better for future. Rolls Royce Motor Cars Ltd. Is using this report to know the actual
and estimated cost of business firm. For instance, Rolls Royce Motor Cars Ltd is going to
restructuring that prepare cost accounting report in order to know the actual cost of its activities
on which it is spending money. Therefore, this report is beneficial for Rolls Royce Motors to
reduce the actual cost by controlling and increase profitability.
Inventory management report - Inventory refers as raw material, finished goods and
working capital which is important to maintain by manufacturing organisation. This report is
mainly prepared by manufacturing industry in order to maintain records of all stoked goods. It is
required because some time it become more difficult to know which material is out of stock and
which one in high quantity. Therefore, this report is used to maintain all information towards
inventory of organisation. In context to Rolls Royce Motor Cars Ltd, variety of raw material and
finished goods are stored by organisation in their warehouse that helps to maintain by using
inventory report. With the help of this report organisation can get proper records of under stock
and out of stock material (Mufid, 2019).
Performance report - This report mainly focus on organisational performance which is
important to take right decisions. It is prepared by management who analysis the organisational
performance and presented to shareholders. It is valuable for shareholder as they make
investment decisions by evaluating the organisational performance. This report is baseline of
investors who seek the performance of business industry and take the corrective actions. In
context to Rolls Royce Motor Cars Ltd, performance report is prepared by management in order
to get concise, clear and true picture of business organisation which helps to recommended
appropriate suggestions and actions.
Therefore, all management accounting reports are prepared by Rolls Royce Motor Cars
Ltd that in order to operate and restructuring their business successfully. Information are
provided by managers should be accurate, relevant and timely that helps to maintain the business
activities effectively and make right decisions in order to accomplishment of goals. If
information are not presented timely then decision be de delay that can effect negatively Rolls
Royce Motor Cars Ltd's performance.
Application and Benefits of Managerial accounting System:
Management Applications Benefits

Accounting
System
Inventory
Management
System
Rolls Royce Limited applied this
system for tracking the movement of
its stock and use advance software to
maintain the accuracy and evaluate the
inventory on FIFO basis.
 This management system helps
the administration in reducing
the risk of overselling.
 This also ensure the avoidance
of excess stock or shortage of
inventory.
Cost
Accounting
System
The application of this system in
selected organization allows the
allocation of costs in actual and
normal costing system.
 Cost accounting system is
helpful in classification and
subdivision of various costs.
 The system is also helpful in
increasing the quality of
products and efficiency of
workers.
Price
Optimization
System
The company applies analytical and
yield management price optimization
techniques for making its pricing
strategies.
 It helps in understanding the
buying patterns or market
trends.
 The respective system
minimize the manual work and
encourage the automation in
the company.
Critically evaluation of management accounting system and accounting reporting
Management accounting system and reports are integrated with organisational process as
system contributes to the continuous improvement in company and reports provide a information
regarding particular thing that helps to improve profitability. System and reports are integrated
with Rolls Royce Motor Cars Ltd process as system are used to get information and take
corrective actions which is possible through prepared accounting reports. For instance,
management of Rolls Royce are using inventory management system and prepare inventory

report in order to track inventory properly and run business process accurately. Moreover, by
using cost accounting system and price optimisation system a cost accounting report has been
prepared that is used to know how can such organisation can reduce irrelevant cost and increase
profits. Therefore, it has defined that management accounting system and reports are integrated
with company process that helps to run a business effectively.
LO2
Calculation of cost by using appropriate technique
Cost – It refers as organisational expenses or cost which are incurred in company in the
form of performing business activities. It also include legal and promotional fees which create
cost for business organisation. Business organisation should focus on expenditure that need to
maintain in order to earn profitability. It covers two types of costing technique which are as
explained:
Absorption costing – This refers as absorption of all cost which incurs within
organisation at the time of running a business. It covers fixed and variable cost that are used to
run business activities.
Marginal costing – This costing technique covers only variable cost as product cost
which ignores fixed cost. Fixed cost in this method consider as unit cost that are not involves in
order to prepare income statement.
(Calculation are in Appendix )
M2 Application of range of management accounting
Different types of costing technique are used by Rolls Royce Motor Cars Ltd such as
marginal costing and absorption costing that states different profits. By using both technique
organisation get information that which technique is appropriate to make high profits and how it
can get higher profits. Moreover, it provides an appropriate financial reporting document that
helps to control over cost (Piontek, Malinowska and Cyplik, 2018). From the above discussion it
has understood that Rolls Royce Motors has used management accounting system and techniques
to produce the income statement. System such as inventory management, cost accounting and

price optimisation system are used by Rolls company in order to prepare income statement. For
producing this, it used marginal and absorption technique that helped to get profits.
Interpretation of data and range of activities
Financial reports are useful for organisation that helps to get the information about range
of activities and states profitability. For instance, Rolls Royce Motor Cars Ltd has used both
technique to prepare the financial report which helps to attain business objectives by performing
all business activities efficiently (Laing and Perrin, 2018). To produce the income statement MA
techniques such as marginal and absorption are used by management that helped to know
profitability and effective method to make profits further.
LO3
About planning tools that controls budgets
Planning tools - It refers as instrument which is used by all business concerns to control
the budget of organisation and increase productivity as well as profitability. Planning tools are
used by all organisation that guides how company is related to program, intervention and
implementation of initiative in order to make profits. In other words, planning tools are consider
as financial planning or best tool that is used to achieve the business objectives. For instance,
Rolls Royce Motor Cars Ltd is using different types of planning tools that states where
organisation should spent their money in order to maximize profitability (Mohr, Raudla and
Douglas, 2018).
Budgetary control is a process that helps managers to set the financial and performance
goals by comparing with past performance. It gives a true and fair view of accounting transaction
that are used to increase the productivity. Rolls Royce Motor Cars Ltd is focusing on budgetary
control that helps to increase the business performance by comparing with actual and budgeted
activities. Different types of budgets are acts are planning tool that are as defined:
Zero base budget - Whenever organisation is going to start a business from new period
then zero base budget is using by such industry. This budget is not basis on past budget or
information that only start with fresh transactions. This mainly advantageous for start up
organisation in which there is not need to cover any past data and budget. In context to Rolls
Royce Motor Cars Ltd, management can prepare zero base budget in starting of new year that
helps to maintain the business performance (Ogundele, 2018).

Advantages - This is flexible budget that focused on operation, low cost and high
disciplined execution of business activities. This budget helps to justify the all operating
expenses of Rolls Royce Motor Cars Ltd that generate high revenues. Moreover, it helps to
allocate the resources in proper format resulting achievement of organisational goals. This helps
to get the actual profit and loss which incurred in financial year. By using this budget
organisation can set its short term goals which helps to get the profits.
Disadvantages - The major shortcoming of zero base budget is that it can reward short
term thinking through shifting available resources in different area of company that generate
revenues for next budgeting or calender year. Moreover, this budget can be manipulated by
managers of Rolls Royce Motor Cars Ltd as they have all information and resources that ca lead
to change culture. This shows only current year profits and loss because it does not involves any
past information.
Cash budget – This budget is important for organisation that helps to manage the cash
within organisation. This budget allows an enterprise to establish the credit amount that can be
extend to clients without having problems and liquidity. It is crucial for all organisation that are
used to avoid shortcoming of cash in financial year and increase the profitability. In other words,
cash budget is an estimation of cash flows that helps to maintain the records of expenses and
incomes. For instance, Rolls Royce Motor Cars Ltd is preparing cash budget that helps to
identify the availability of cash and revenues to meet with future requirements which helps to
make higher profits.
Advantages – By using cash budget management of Rolls Royce Motor Cars Ltd can
avoid the debt as it helps to find the shortcoming and adjust according from excess funds. This
helps to track the all cash habits and allocate the funds according in order to operate business
efficaciously. Moreover, it increases the efficiencies and financial resources of organisation
which increases profitability. It enhance the financial position of company. By using this
organisation can avoid the debt by preparing cash budget and it helps to make correct budget. It
also require attention to detail, tracking specific habits by managing cash in organisation.
Disadvantages – It can create danger or theft for organisation in case of not tracking the
cash flows properly. Tracking of cash is difficult for organisation that can be threat for Rolls
Royce Motor Cars Ltd to arrange the cash resources properly. Moreover, it can limits the

spending power of business industry resulting low productivity (Smith, 2015). It can reduce the
cash within organisation in case of improper records.
Master budget – This is the covering of all lower budget which is produced by business
organisation in to various functional areas. It covers financial statements, financial plan and cash
forecast in order to set organisational goals. This budget is presented on the basis of monthly,
quarterly and yearly which covers Rolls Royce Motor Cars Ltd's entire fiscal year. In other
words, it is a planning tool which is used by management team to direct the business activities
and judge the business performance at various responsibility centres. This is a superior budgets
which is prepared by involving all small budgets.
Advantages – Through master budget management of Rolls Royce Motor Cars Ltd can
identified the goals and objectives. It involves all financial and non financial information that
helps to take right action. This helps managers to get information regarding earning and
expenditure which leads to achievement of goals and objectives. By applying this budget
respective company can arrange the funds if they are going excess beyond budget and adjust
with other one where is needed which helps to make profits.
Disadvantages – Master budget is difficult to read for manager because it covers whole
information which is related to organisation. So, Rolls Royce Motor Cars Ltd can not make right
decision on specified time due to involving many transaction and informations. Moreover, it also
difficult to update periodically (Phang, Siti-Nabiha and Jalaludin, 2019).
Operating budget – A financial plan is consider as operating budget which is prepared
by all organisation in order to meet with company's debt and operating business successfully.
This budget covers all daily basis transaction that sustain the growth over specified time period.
By creating this Rolls Royce Motor Cars Ltd can allows management to know where company is
spending money and at what areas it needs cash most. By using this budget management of
respective company operate its business on daily basis that helps to increase the profitability.
Advantages – It helps Rolls Royce Motor Cars Ltd to allocate money in short term and
long term as well as for future activities that helps to attain the business goals efficaciously. It
also helps to keep records of tax complications by determining the operations and accurate
informations. This budget states the problems and plan in order to operate business and earning
profits. Moreover, operational activities are perform effectively which helps to maintain the
organisational productivity.

Disadvantages – It is time consuming budget that take high amount of time in order to
operate business successfully. It can be difficult for managers to focus on small thing so
operation of organisation can be effect in negative manner (Meidell and Kaarbøe, 2017). By
using this managers face problem to read and understand because it covers various information.
Uses of different types of planning tools
From the above information it has been analysed by Rolls Royce Motor Cars Ltd
management that organisation should use different types of planning tools such as operating
budget, master budget, cash budget and zero base budget that helps to maintain the productivity
as well as profitability. By applying such tools Rolls Royce Motor Cars Ltd can prepare and
forecast the budget for future period in order to attain business goals.
LO4
Organisation are adopting management accounting system to respond towards problem
Finance is basic need of business industry that is used to run all activities whether it is
related to business, market and other. To operate a business finance is important that helps to
make decision regarding business activities and maintain the profitability. Businesses are facing
different types of financial problems that can affects business performance of organisation. Rolls
Royce Motor Cars Ltd is manufacturing of cars that deals in different types of financial activities
in order to make higher profits. Due to running a business and selling the products it faces
different types of financial problems that are as explained:
Unmatch cash flow – All organisation prepares cash flow statement that is important to
know the financial position of company. To run a business and getting higher profits there is
need to match all activities which are covers in cash flow statement such as operating activity,
investing activity and financial activity. If all activities are not matching that means there is gap
between activities due to which organisation is facing financial problem. Rolls Royce Motor
Cars Ltd is facing such type of financial problems because its all activities are not showing equal
balance. There is a gap between financial and operating activities, results financial problem.
High spending and low income – Organisation is focusing on different types of
activities that is important to make profits. It is important that management should know where is
need to invest money and where is not. If company is spending money on unnecessary items and
earning low than spending that means it is facing financial problem. Rolls Royce Motor Cars

Ltd is facing financial problem as it invest money on unnecessary things and earning less income
that reduces organisational productivity and profitability (Napitupulu, 2018).
Different type of techniques which are used by Rolls Royce Motor Cars Ltd to identify the
financial problem
Balance scorecard - This is a management technique which is used identify the
problems, facing by organisation. In this technique managers communicate with all and get
information what they are doing to accomplish the goals. By using this technique manager has
identified high spending low income financial problem as company is spending money on
buying parts of cars at higher cost and infrastructure that is creating higher cost for organisation.
Moreover, it helps to achieve the strategic targets of business organisation by using balance
scorecard technique.
Activity based costing - This is another technique that is used by business organisation to
know the financial problems. It is based on activities of business industry which are performed
by manager in order to accomplish business objectives. Rolls Royce Motor Cars Ltd facing
financial problem which is identified by managers of organisation. The management of Rolls
Royce Motor Cars Ltd has identified the unmatch cash flow problem which is facing by
organisation. By this technique manager get inform why there is a gap between financial and
operating activity and how it can be overcome. This mainly used by Rolls Royce company to
allocate the overheads in to smaller group so, operation can be perform effectively. This brings
accuracy and reliability in product cost and maintain good relationship. By using this respective
company can get correct and reliable product cost when diversity of products are generating low
volume products, high volume products etc.
KPI – This refers as Key performance indicator which is used by business organisation to
make the profits by evaluating the business performance. This covers financial and non financial
indicator which states the performance. Rolls Royce Motors car's is using this indicator in which
financial and non financial performance are evaluated by managers which helps to make the
profits.
 Financial KPI covers income statement, balance sheet and cash flow statement which
helps to measure financial activities. For example, Rolls Royce uses financial KPI to
prepare the income statement, balance sheet etc. in order to know the sales growth of
organisation and maintain the profits effectively.

 On the other side, Non financial KPI is used to assess the activities which is performing
by managers or others within organisation that helps to attain the organisational
objectives. For instance, Rolls Royce is using non financial indicator to measure the
activities that company sees as important to the achievement of its strategic objectives.
This is related to customer relationships, operations, quality, cycle time, quality and the
organisation's supply chain which helps to improve the business effectively.
Benchmarking – This is the practice which is used by organisation to compare the
business process and performance metrics in order to make profits. This helps to measure the
company's products, services and process against another business in same field that helps to
make better plans in order to attain the organisational goals. Rolls Royce is using this tool to
measure the performance and process while making products and cars which helps to attain the
goals and objectives effectively. It identify internal opportunities for improving the
performance.
Financial Governance - It is a type of guidance which is provided by government to
companies in order to solve their financial problems. This states principle agent relationship that
helps to incur relevant cost by monitoring the activities. For instance, Rolls Royce is following
governance principles which helps to get the actual cost of their working activities which helps
to maintain profits by monitoring the business activities effectively. It is the way to collecting,
managing, monitoring and controlling the financial information as per government policies. It is
important for business organisation to manage their business activities by following the
government policies and solve the financial problems. Rolls Royce Motor Cars Ltd management
solving their financial problem such as high spending and low income by getting guidance on
which activity they should give priority. Next problem is unmatch cash flow which is solved by
managers by focusing on each activity, transaction and controlling the data.
Comparison between Rolls Royce Motor Cars Ltd and Bentley motors
Basis Rolls Royce Motors Cars Bentley Motors
Problem Such organisation is facing financial
problems that is unmatch cash flows
due to having gap between operational
and financial activity.
This is facing financial problem as
high spending and low income which
is reducing the productivity and
profitability.

Problem
identified
Activity based costing helped to
identify the financial problem which is
obstacle for organisational profits.
Balance scorecard helped Bentley
management to identify the financial
problem of organisation.
System used To solve the financial problem
managers should use inventory
management and price optimisation
system that can help to set the price of
cars and also helps to maintain the
records of all inventory which is
creating gap among activities.
To solve the financial problem
managers should use cost accounting
system and inventory management
system that helps to keep records of all
stocked material as well as suggest
where organisation should invest their
funds.
Managers of Rolls Royce generally uses inventory methods and price optimisation
systems to solve financial problems. To solve problem of high spending and low income, price
optimisation method is used in which company sets budget that describes and guides for making
spendings in productive manner. With this, various unproductive costs are reduced that further
leads in increasing higher incomes. At same time, inventory method is also used in which
information related to all inventories are recorded and accordingly decisions are made for flow of
cash in distinct aspects.
Respond to financial problems
Financial problem is facing by all business organisation that impacts negative on business
performance. It is important for business organisation to use proper management system and
reporting in order to solve the financial problems. Such as Rolls Royce Motor Cars Ltd is using
inventory management system, price optimisation system and cost accounting system for the
purpose of solving financial problems effectively. By using price optimisation system it can
decide the price of cars, by using inventory system it keep records of inventory and by using cost
accounting system it reduce the cost of business industry that solve the financial problem and
leads to sustainable success.
Planning tools for responding financial problems
Planning tools are the good strategy for organisation that helps to respond towards
financial problems which is facing by organisation. Different types of problems such as high

spending and unmatch cash flow are facing by Rolls Royce Motor Cars Ltd, that is reducing the
profitability of organisation. If organisation uses this tool properly then it can solve the problems
successfully that leads to sustainable organisational success (O’Grady, Morlidge and Rouse,
2016). For instance, Rolls Royce is facing low profitability due to high spending and high prices
of cars due to which customer are moving towards other brand. For overcoming this problem
cost accounting and price optimisation system is suitable system that helps to eliminate the
problems. By using price strategy it will be able to set reasonable prices of cars that will help to
limit customers for switching other brand. And by using cost accounting system it be able to
manage income and expenses that will suggest where is need to spend money. Therefore,
accounting system are used to respond financial problems properly.
CONCLUSON
From the above mentioned report it can be terminated that accounting information should
be management within all organisation that helps to attain business objectives. Different system
such as inventory, price optimisation and cost accounting system are integrated with accounting
reports that helps to prepare inventory report, costing report, budget report etc. Moreover,
planning tools are helpful to control the budget and maintain the profitability. In order to run a
business it is important that organisation should used appropriate system that helps to perform all
activities and increased the productivity.

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APPENDIX

Calculation of Marginal costing

Calculation of Absorption costing