Cost Accounting Methods: Absorption and Marginal

This assignment delves into the concepts of absorption and marginal costing, two fundamental methods used in cost accounting. It requires students to demonstrate their understanding by preparing income statements under both costing conventions. The analysis focuses on the impact of different cost allocation approaches on reported profits and how these methods are applied in various business scenarios.

MANAGEMENT
ACCOUNTING
1

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1) Management accounting and significance of its types..........................................................4
P2) Different methods used for management accounting reporting............................................7
TASK 2..........................................................................................................................................10
P3) Different costing methods and their differences.................................................................10
TASK 3..........................................................................................................................................13
P4) Advantages and limitations of management accounting for budgetary control tool...........13
P5) Significance of management accounting systems to solve out financial problems............16
CONCLUSION..............................................................................................................................19
REFERENCE.................................................................................................................................20
2

ILLUSTRATION INDEX
Illustration 1: Marginal costing to prepare income statement.......................................................10
Illustration 2: Income statement through absorption costing.........................................................11
3

INTRODUCTION
Management accounting is essential for decision making and preparing strategic plans
regarding business operations. In this regard, entire development of organization and effective
business performance can be obtained through utilizing adequate management accounting tools.
The present report is based on understanding different aspects of management accounting
components for Big Swing Company. It is a small sized dance festival organizer of UK that
organizes events of dance and sports in the country. In this report, different types of management
accounting systems and methods used for reporting will be determined. In addition to this,
various costing methods to present income statement and technique to decision making process
for business activities will be highlighted. However, advantages and limitations of budgetary
control as a management accounting tool are presented here. Along with this, significance of
management accounting for decision making and strategies for expansion of small business unit
and increasing its services will be discussed.
TASK 1
P1) Management accounting and significance of its types
Managing Director
Big Swing
Management accounting is the composition of all accounting systems including finance,
cost, corporate and accounting related to business activities. In this process, management
accountant of Big Swing Company recognizes business performance through financial
statements and different recorded information of entity. It leads to generate variety of ideas and
decision making process for further business operations. Therefore, price determination and
better performance of business organization can be obtained by utilizing management
accounting tools. Including this, it is essential for the optimum allocation of resources and fund
efficiently (Dobroszek and Szychta, 2015). In accordance with this, it is determined that
management accounting is helpful for the overall development of business entity and enhancing
service qualities of goods and services provided by company. Therefore, management
accounting is considered as the key component for effective business operations and systematic
management of firm. By analyzing the business performance, management accountant of entity
4

makes decision for achieving organization's effectiveness at the high level by preparing budget
and making decisions regarding business operations of small business entity. Thus, management
accounting is crucial for systematic management of Big Swing. Moreover, planning is obtained
for reducing waste material and also remain helpful for proper production and distribution of
goods produced by the firm (Fayard and et.al., 2014). Apart from this, planning including
forecasting and decision making is obtained for effective growth of firm that is determined
through utilizing management accounting tools. Hence, management accounting plays an
important role in enlargement of small business unit and enhancing its service qualities
adequately.
Kinds of management accounting systems
Management accounting system is liable for financial and inventory management of
firm that put a direct impact on the organizational structure of company. Therefore, different
management accounting systems and their importance can be described as follows:-
Job order costing: - Under this accounting system, costs are assigned for each product
or bulk of goods. It is related to determine the overall expenses of product incurred for
production of goods. In this regard, cost incurred for project accomplishment is obtained that is
usable for ordering and incurring expenses. However, job order costing is related to determine
price for projection and implementing planning procedure for reaching out the set goal of task.
It is useful for price determination regarding purchasing raw material and production process
for supplying goods and services provided by Big Swing (Kreibich and et.al., 2014). In
accordance with this, recording is done for expenditures and implementing project activity.
Therefore, job order costing is relevant for recording of direct materials, labor costs and
overheads. Including this, recording also includes work assigned to each individual for working
in a team. Thus, job order costing is liable for keeping record of project activities. For instance:
if project is related to construction of any building then recording of material used, labor fees
and outstanding expenses is included under job order costing method. Including this, records are
also maintained regarding assigning work to each employee of the organization.
Process costing: - Under this costing method, expenses incurred for production of
products are recorded. Therefore, after manufacturing process, step forwarded to production in
which organization has to incur expenses. It includes cost on inventories, custom equipment
5

cost and price of goods sold. Therefore, records are prepared and maintained regarding
incurred costs for the production process. However, management accounting tool as process
costing is interlinked with production and distribution system of goods and services provided by
company (Osadchy and Akhmetshin, 2015). However, costing recording is obtained for
processing and expenses incurred for production system. In this regard, process costing is
related with price determination of products. Under this process, Big Swing uses different
qualitative products and materials. Therefore, material and qualitative features used in this
process affects the pricing of finished goods. In this regard, it is obtained that process costing is
recording of expenses that incur in the production process of firm.
Throughput costing: - It is the costing of finished goods which is set according to
quality, features and expenses incurred for manufacturing and production process for Big Swing
organization. Thus, according to incurred price for manufacturing and production process,
actual price of goods and services is determined (Shields, 2015). It is interrelated with different
factors such as demand, competition and setting pricing related to different determinants. In this
regard, throughout process is interlinked with market essential to make position and sustain its
value for long term efficiency. Under throughout process, market activities are involved such as
launching and advertising products in the market.
Inventory accounting system: Through this management accounting system, inventories
and liquidity position of entity is analyzed. However, it is useful for optimum utilization of
resources and funds influences further business operations. In addition to this, different ideas
are generated for managing all goods and services. Thus, management accountant of Big Swing
analyses all inventories and products to be produced and supplied affects profitability and
management of entire operations effectively.
Cost accounting system: It is one of the great tool for cost effectiveness and producing
goods and services provided by entity adequately. In this regard, it is suitable for price
determination and creating balance between production and supplement of goods efficiently.
Thus, cost accounting system is essential that is related with entire business activities and
profitability of organisation.
Significance of management accounting systems
6

Different management accounting tools that present the overall business performance
remain significant for operating proper business activities. Under management accounting
systems, various factors are obtained related to transaction of goods and services including
business efficiency. These are essential for the enlargement of small business unit and
improving its service qualities at high level. In this regard, actual economic and different
sectors' performance is gained that is considered as the key element for decision making and
preparing strategy for further business operations. However, management accounting systems
are useful for determining adequate pricing of products and business performance to increase its
efficiency for better services as well as for gaining a strong market position for long term
sustainability (Chiarini and Vagnoni, 2015). Thus, budgeting and preparing accounting reports
are crucial for Big Swing Company limited to increase its product’s value for long term
sustainability in the market.
P2) Different methods used for management accounting reporting
Managing Director
Big Swing
Management accounting reporting is related to entire business organization's effectiveness.
Under this tool, different determinants are involved that presents performance of Big Swing.
For example, financial statements, cost accounting, ratio analysis, budgeting and management
reporting (Fullerton, Kennedy and Widener, 2013). In this regard, there are several tools and
techniques utilized for presenting organizational structure and decision making process
regarding further business operations can express as below:-
Financial statement analysis:- Under this analysis, management accountant recognizes
financial statements such as; income statements, balance sheet, profit and loss account, fund
flow as well cash flow statements. Therefore, actual economic profile of entity is obtained
through this tool. On behalf of which, decisions are made for implementation and increasing
profitability of firm (Nielsen, Mitchell and Nørreklit, 2015). Thus, financial statement analysis
is one of the great tool of management accounting for generating different ideas that impacts on
presenting further business performance. Hence, elements of funding and profitability of small
7

business entity is obtained through different tools. It is valuable for proper funding in relation to
investment and getting sources to enhance monetary profile. Therefore, preparing and
maintaining reports that present financial performance of Big Swing that is related to economic
stability and improving monetary position of organization effectively.
Cost accounting:- Management accountant of Big Swing company determines price for
producing goods and services. Under this process, different techniques are utilized for setting
price as per expenditures incurred for purchasing raw materials and work in process. Therefore,
cost accounting is an essential term for setting price of services according to demand,
competition and different ways such as marginal and absorption costing. In this regard, it is
determined that cost accounting is useful for forecasting and decision making related to market
product quality to sustain its value in market (DRURY, 2013). Under this process, various tools
are determined by comparing market price with predetermined and competitive entities set
prices. Thus, cost accounting is key essential for costing and price determination efficiently. It
is interrelated with presenting incurred expenses and earned income statement that leads to
create several ideas for creating balance between them. However, proper decision-making is
done through this process that is useful to operate further business activities. In this regard,
accounting reports are prepared that are valuable for enhancing quality services of firm at high
level.
Budgetary report:- This report is prepared for proper forecasting and decision making
towards further business operations. It is helpful for best use of resources and fund that affects
productivity and profitability of Big Swing. According to analyzing business performance,
different strategies are prepared for reducing issue occur at workplace as well implementing
service qualities of small business entity (Fayard and et.al., 2014). It is beneficial for controlling
over excess of business operations. However, through budgetary system, proper directions are
obtained for increasing efficiency of Big Swing. Including this, uncertain changes occur in
entity are also get managed through preparing strategies by recognizing issues. In this regard,
decisions are made and planning procedure is obtained for enlargement of Big Swing company
to sustain its market position for long term sustainability. In this process, management
accountant of organization prepares budget through analyzing current business performance.
Therefore, by reporting budget as strategies to be followed are benefited for better quality
8

services and improving entity's effectiveness. It is useful for optimum allocation of resources
and fund efficiently that affects productivity and profitability of firm.
Management accounting report:- It is an approach for transferring information of
business organization from one place or one way to another. Under this system, different tools
and techniques are utilized for exchanging data that emerges varieties of ideas for
implementation and actual business performance is obtained. Therefore, decisions are made
through this system for increasing efficiency of small business unit. It is one the essential
management accounting tool that remains useful for expansion and enhancing service qualities
of firm at high level (Fullerton, Kennedy and Widener, 2013). By preparing accounting reports
related to overall business performance are able to make decisions related to activities as well
remains able to expand entity as well enhancing product services. In this regard, decisions are
made for better quality of organization. However, management of entire business operations is
possible through this report affects organisation's effectiveness and services provided by it.
Including this, overall strategies are prepared as well implemented for managing all activities
and improving them efficiently. Including this, it is helpful for controlling over excess of
production and reducing cost on additional expenditures. Thus, management accounting
reporting is vital for effective production and distribution of goods and improving services
efficiently.
Management reporting:- It includes different tools to present business performance and
organizational structure. Management accountant of Big Swing company prepares accounting
report as per financial profile and management of business operations. Under these tools,
various factors are determined for example; production and distribution of products, economic
structure, profit and loss account and balance sheet (Kaplan and Atkinson, 2015). These
identification are highly useful to management for exercising employees' performance and
several determinants for quality and budgetary control of entity. Therefore, by recognizing
management reports different ideas are generated for enlargement of Big Swing company and
also useful for expanding its service qualities. Thus, planning is proceed to make decision for
further business operations and gaining systematic management of entire business activities.
Management reporting presents economic and other sectors' enhancement for implementing
business operations effectively. In this regard, overall management of entire business operations
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at large scale.
Hence, above mentioned tools and techniques of management accounting reports are
useful for presenting business performance and making decisions for further business
operations. In accordance to this, systematic management of entire business activities is
presented through utilizing all the management accounting tools. Therefore, on the basis of
management accounting tools, effective management of all business activities can be obtained
to gain better performance and enhancing quality services of firm at large scale (Management
Accounting, 2016).
TASK 2
P3) Different costing methods and their differences
Managing Director
Big Swing
Costing is considered as price determination method. Under this process, costs of product
is obtained through different methods. It is useful for effective income statement to present
financial position of small business unit. As per incurred expenses over purchasing raw material
and production process, price is determined for producing goods and services (Lavia and Hiebl,
2014). However, costing in marginal and absorption costing can be explained as below:-
Marginal costing:-
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Illustration 1: Marginal costing to prepare income statement
Interpretation:- Through marginal costing method, management accountant uses simple
and easy method to determine net profit. Under this process, fixed overheads are included for
determining net profit. Therefore, gross profit is obtained by subtracting revenue to expenditure
incurred over business operation that is 13,200. After getting gross profit, net profit is obtained
by differentiating gross profit to total variable expenses. By calculation, total expenditures
incurred on variable overhead is 3900. Thus, net profit is obtained as 9300. It is beneficial for
short term business operations. However, absorption costing believes that only variable cost is
useful is appropriate for obtaining net profit.
Absorption costing:-
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Illustration 2: Income statement through absorption costing
Interpretation:- Absorption costing technique beliefs that total expenses must include overhead
for determining effective net profit. Under this process, after determining gross profit as
111500. Thus, total variable expenses company incurred as 1900. In this regard, overall
expenditure is obtained as 9600 that is addition of variable and fixed overheads. It is useful for
further operations and improving services of entity effectively.
Marginal vs absorption costing:-
Through above mentioned income statement methods, it is determined both marginal
and absorption costing are different from each other for presenting financial position of firm.
There are some differences between both costing methods can express as follows:-
Profitability:- It is determined that marginal costing obtains profit through profit volume
ratio. Under which, gross profit is only deducted by total variable cost and determines net profit.
While, for absorption costing, profitability is affected because of inclusion of fixed cost
(Macinati and et.al., 2014). Under absorption costing method, fixed overheads are added to
variable costs and further determines net profit.
Focuses on:- In comparison to margin costing to absorption, it is obtained that both
income statements concentrate on different factors. Thus, marginal costing is valuable for
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selling and pricing aspects while absorption costing emphasis on production of goods (Miluzzo,
Caceres and Chen, 2015). Thus, there is difference obtained between emphasis of coasting
methods regarding business operations.
Time structure:- It is determined that marginal costing is appropriate for short term
planning procedure while absorption costing is suitable for long term business operations. Thus,
management accountant of firm uses different costing methods for several time scales. In this
regard, marginal costing is presented mostly for overcoming uncertain changes by preparing
strategies. On the other side, absorption costing is suitable for long term efficiency of
organization related to funding for organizational structure (Nielsen, Mitchell and Nørreklit,
2015).
Thus, marginal and absorption costing have differences for implementing planning
procedure regarding business operations. It is obtained that marginal concentrates on selling
effectiveness while, absorption costing focuses on enhancing productivity and profitability of
firm. Therefore, time measuring is also differentiated such as; marginal is appropriate for short
term period while absorption costing is benefited for long term planning procedures. Thus, it is
obtained that marginal and absorption costing are different in several ways to present income
statements to perform business and profitability methods.
TASK 3
P4) Advantages and limitations of management accounting for budgetary control tool
Managing Director
Big Swing
Management accounting tool is considered as key component for decision-making and
implementing strategies for organization's effectiveness and carrying on business activities
effectively. It is considered that budget is key component for forecasting and decision-making
process related to presenting performance of organization (Osadchy and Akhmetshin, 2015). In
this regard, proper fund and resource allocation is obtained regarding business operations to
implement efficiency of firm at high level. However, management accountant of organization
recognizes business performance and organizational structural framework. On behalf of which,
different ideas are generated preparing strategies are implemented for increasing productivity
13

and profitability of firm at large scale. However, it is valuable for handling over excess of
trading and imbalanced demand and supply of goods and services provided by entity. Thus, it is
determined that for small scale organization, it is required to prepare budget and implementing
prepared strategies to gain overall development of organization. In accordance to this, positive
and peaceful environment of entity can be created for long term sustainability of small business
enterprise. In addition to this, uncertain changes occur at workplace can be recovered by
utilizing budgetary control tool. Moreover, advantages and limitations of budgetary control
system can express as follows:-
Characteristics of budgetary control system:- Budgetary control system has several
kinds of advantages can describe as below:-
 Helpful to present actual organization's performance.
 Useful for preparing strategies and implementing them for increasing in quality services
of firm's business activities.
 Enhances business and competitive strategies.
 Creates positive and peaceful environment of organization through developing strategies
for competitive advantages.
 Increases strength for facing competition.
 Helpful to reduce issues occur at workplace that disturbs environment of entity.
 Valuable to encourage employees for better performance and good coordination in team
efficiency.
 Optimum fund and resource allocation can be obtained through budgetary control
system.
 Problems occur in entity can be overcome by utilizing different strategies for
development of firm and its service qualities at large scale.
 Provides systematic processes for stepping towards reaching out set targets.
 Effective control over wastage and excess materials can be determined.
 Budget is considered as key component for improving communication with employees
of the organization.
Hence, budget is considered as great tool for increasing efficiency of organization and
creating positive environment of firm. However, strategic management and proper production
14

for supplementing goods are determined through utilizing these tools (Settanni and et.al., 2014).
It is interrelated with entire organizational activities to be implemented for enhancing planning
procedure and systematic management of business organization can be determined. However,
budgetary control system is one of the essential part for implementing strategies and enhancing
service qualities of organization can be obtained through this process.
Limitations of budgetary control system:- There are some limitations occur for
achieving organization's effectiveness can describe as follows:-
 Wrong analysis of organizational structure.
 Inefficient fund and resources to make strategic plans.
 Lack of coordination among organizational functions.
 Improper strategies
 Inappropriate forecasting and decision-making process.
 Unsystematic time scheduling for strategic plans to be obtained.
 Uncertain changes which remains beyond control.
 Ineffective market research.
 Lack of employees' adequate coordination in team efficiency.
Hence, budgetary control system has several limitations on which manager requires to
be focused on. In this regard, it is essential to prepare strategic plans efficiently to be followed
on and enhancing service qualities provided to customers. However, systematic market research
and getting consumer views over business operations considered as useful for effective
budgetary system. In addition to this, budgetary control system must be implemented
effectively for expansion of entity and enhancing services of firm more effectively. Moreover, it
is required for manager to recognize business performance and overall structure efficiently
therefore forecasting and decision-making can be implemented at large scale (Shields, 2015). It
is determined that budgetary system is beneficial for preparing strategies to overcome issues
occur at workplace and implementing action plans for long term sustainability of entity
regarding competitive advantages. Thus, management accounting tool as budgetary control
system is helpful for decision-making process and increasing quality services of firm at high
level. It is considered as crucial element for improving business and competitive strategies of
15

firm that is useful for long term sustainability in competitive market.
Budgetary control systems are useful for controlling over excess of production and
distribution of goods ans further making decisions for proper management. There are different
kinds of budgetary control systems used such as; fixed budgeting, variable, semi-veriable, zero
base budgeting and so on. In this regard, some budgetary control systems for Big Swing can
describe as below:-
 Fixed budgeting:- In this budgetary control system, all operations and made decisions
remains constant as they do not change according to changes in production and
distribution system of goods provided by entity. Including this, it is advantage of
preparing a clear agenda and structure regarding business operations to achieve its
effectiveness and improving quality services adequately.
Advantages:
 Certain activities are implemented for business operations whether fluctuations in
market and its structure is created.
 Systematic prepared planned are followed in proper decided time affects organisation's
effectiveness and different implementations.
Limitations:
 It remains inappropriate for competitiveness for long time periodicity.
 Due to unexpected changes, business may get loss if organisation does not change its
strategies according to situations.
 Variable budgeting:- According to changes in production and distribution of goods,
made decisions regarding business operations get changed. In accordance to this,
fluctuations in operations as well sustaining power in market enhanced that affect
further business activities.
Advantages:
 Getting adjusted according to flexibility in market to achieve competitive advantages.
 Customers can get satisfied with organisation's services by getting their desired quality
in product services.
 Drawbacks:
 Time to time customers' interest get changed affect production and distribution of
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organisation as well its competitive strategies.
 Difficult to fulfill all customers' requirements belong to different society and cultures.
Zero base budgeting:- It is one the great planning tool in which actual data are analyses as well
forecasting for future operations is created in a systematic manner. Therefore, adequacy in
business activities and planning is identified through this process. Hence, by preparing
strategies according to zero base budgeting system, optimum allocation of fund can be created
for effectiveness of Big Swing.
Advantages:
 Strategies are prepared for effectiveness of Big Swing remains able for effective
management of all goods systematically.
 Proper forecasting for future business operations can be created for improving
profitability and competitiveness at higher level.
Disadvantages:
 Fluctuations in business operations can be obtained due to imbalanced production and
supplement of product services.
 Accurate forecasting for further years' operations is not so possible for future time
period and proper management of all business operations as required.
Characteristics of budgetary control systems: Using budgetary control systems in Big
Swing operations, effective management of its activities can be obtained. In this process,
optimum allocation of resources and fund can achieved. However, different ideas are generated
for controlling over excess of production as well balancing of supplying goods. In addition to
this, management of each operation is possible through this process system as well remains able
to improving services and managing all resources effectively. Moreover, decisions are made
regarding business operations and their management systems that are useful for effective
production and supplement of goods. Thus, budgetary control system is essential for proper
management of business operations and increasing its efficiency systematically.
P5) Significance of management accounting systems to solve out financial problems
Managing Director
Big Swing
Management accounting system is useful for solving out financial problem related to
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management of business operations effectively. In this regard, it is determined that management
accountant of organization prepares strategies for expansion of small business unit and
increasing quality services of firm (Kaplan and Atkinson, 2015). Thus, there are several tools
and techniques are determined for increasing efficiency of entity. In this regard, management
accounting is important for overall development of entity at high level. Moreover, it is valuable
for creating balance of production and distribution of goods. Therefore, management accounting
importance for entire business organization's effectiveness can be determined as below:-
Financial management:- Under this process, management accountant of firm
recognizes financial statements such as income statements, cash flow, fund flow, balance sheet,
profit and loss account of firm (Fayard and et.al., 2014). However, as per these statements
identification, several ideas are generated for enhancing profit earning capacity of firm. It is
interrelated with different business operations for example; production and distribution of
goods as well business performances. Thus, for effective financial management, management
accounting plays crucial role for enlargement of small business entity and enhancing service
qualities of entity at high level. Thus, financial management and proper economic structure of
organization can be obtained through this process.
Cost effectiveness:- Management accountant of Big Swing company limited determines
cost of products efficiently by recognizing purchasing raw material prices and expenditures
incurred for production system. However, cost effectiveness regarding goods and services can
be obtained through this tools. Thus, management accounting is essential for setting adequate
cost of products for making place in competitive market (Miluzzo and et.al., 2015). In this
regard, it is considered that management accounting is crucial for cost effectiveness of goods
and services for competitive advantages and increasing business as well competitive strategies
for long term efficiency.
Inventory management:- It is considered that for management of inventories,
management accounting is essential that impacts on productivity and profitability of
organization. However, under this tool, keeping inventories are focused regarding warehouses
and different entities. Therefore, systematic management of inventories is determined by
preparing strategies. It is interrelated with production and distribution of goods and services
effectively. Thus, inventory management of small business organization can be obtained that is
18

useful for entire company's development efficiently.
Analyzing business performance:- Management accountant of Big Swing company
limited recognizes proper business performance and entire business operations. On the basis of
these identifications, various ideas are generated regarding business activities and enlargement
of firm can be determined (Lavia and Hiebl, 2014). Thus, management accountant process leads
to make decisions and forecasting for further business activities. It is useful for implementing
strategies and enhancing service qualities of firm. Thus, proper business performance is
analyzed that is valuable for presenting effective business performance at high level.
Therefore, management accounting is crucial for entire development of firm that is
helpful for expansion of small business unit and enhancing qualitative services. In accordance
to this, it is determined that all factors of entity including finance, production of goods and
preparing strategies for attracting customers are created. In this regard, management accounting
systems are useful for inventory management, costing and presenting effective business
performance can be obtained. However, cost effectiveness and performance of business is
determined efficiently. In this regard, several tools and techniques of management accounting
system are recognized for increasing efficiency of business organization that influences
development of small business enterprise.
Financial problem occurs at Big Swing because of imbalanced production and
distribution of services. Therefore, different factors get affected like; productivity, profitability,
further business operations and so on. However, these problems can be solved out by using
different tools like; bench-markig, key performance indicators, analysing all business operations
critically etc. Therefore, all of these tools for reducing economic issues can be understood as
follows:- Key performance indicator:- It is key component to recognize performance of Big
Swing as well potential of entity financially to face competition. In accordance to this,
actual performance of organisation is gained by which further decisions are made to
reduce economic problem and improving monetary performance of entity.
 Benchmarking:- It is comparative tool that presents competitive strategies of
organisation with its competitive entity. Therefore, market position of Big Swing is
gained through this process affects economic growth and different tools for making
19

decisions regarding business operations effectively.
By analyzing Big Swing's performance in market, it is obtained that it has good position
in competitive market as well has improved efficiency and services from last years. However,
as a small scale enterprise, it is required to implement strategies for its effectiveness and
sustaining market position for long time period. Therefore, through using different tools and
decision making process, organisation can improve its services and also can attract its
customers at high level.
CONCLUSION
The report is concluded that management accounting is key component for entire
development of entity. It is interrelated with all other factors of organization and remains helpful
for expansion of firm at high level. Different management accounting tools are determined for
decision-making and implementing planning regrading organization's effectiveness. However,
significance of management accounting in enhancing service qualities of firm is obtained.
Interrelation of different organizational functions and getting coordination is considered.
Moreover, management accounting tools for solving out financial problems is presented through
this study. In addition to this, advantages and limitations of budgetary control system is
considered. Moreover, costing methods and differences between techniques are determined
through this report. Thus, various tools and techniques of management accounting and planning
procedures for implementing business and competitive strategies of Big Swing company limited
is determined. In this regard, role of management accountant for preparing planning procedures
and decision-making is obtained.
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