OFFERS Buy 4 assignments and get 1 absolutely FREE!
25% off

Prices from


Safe & Trusted


The management accounting is the important tools which are used by the company to make their business operation decisions more effectively and its methods are used to measure the company performance. It basically comprises the explanations about the different management accounting systems and their elements for smooth functioning of the business activities which are integrated with the management accounting reporting. This report also involves the various useful planning tools which are used for budgetary control as to measure and monitor the company’s performance appraisal (Amoako, 2013). A comparison is provided to reflect that how the company can use the MA tools and techniques for appropriate implementation and execution. Under this report, Tech (UK) Ltd use the essential tools and techniques of the management accounting to solve out the department managers complained about the deficiency of financial information to better their decision-making. Under this report, the company will also prepare the management accounting reports for making the decisions in an efficient manner.

Task 1


It is the process which is followed by the company for examine the business costs to form internal financial reports, records and helps the management to frame the business decisions effective and efficient for achieve the predetermined objectives and goals. The accounting information which is obtained by doing analysis helps in financial accounting (Management Accounting, 2017). The management accounting assists the company’s management in the formulation of policies, procedures, in the decisions and also helps in daily operations of the business.

  1. Distinguish between management accounting and financial accounting:

The numerous comparisons in between the financial and MA which are explained as under:

  • This accounting used within the organization by the managers and employees whereas external users use the financial accounting for the decision making about the investment in the company’s business (Vinayagamoorthi and et. al., 2012).
  • The management accounting does not apply any rules or standards for the accounting while on the other hand, the financial accounting is worried with a different set of rules and regulations which are relevant to the company.
  • The management accounting uses the financial and non-financial information for making the reports and other useful documents whereas the financial accounting use only and only the financial information for preparing the financial statements.
  • The management accounting use only data which are historical, current, and future- oriented whereas the source of data is historical associated to the previous year performance in the financial accounting.
  1. The importance of management accounting information as a decision-making tool for the department managers which are discussed below:

Management accountants utilized the various tools and techniques for planning which helps in the decision- making process. They also focus on the main criteria of the business operations like revenue growth, productivity growth and efficient and effective utilization of assets.

  1. Cost accounting systems (actual, normal and standard costing):- This system assists the company to determine cost of the product. This system is used by the management of the company for lowering down their working expenses and similarly controls them in an effective manner. This is the type of accounting system which assesses about how an organisation is doing and benefits managers to form decisions which is relied on the costs of doing operational activity (Macinati and Anessi-Pessina, 2014). This system requires five basic parts. These are inventory valuation technique, input measurement basis, accost accumulation method, accost flow assumption, and a capability of recording cost flows at particular intervals.
  2. Inventory management system: This system keeps track the goods via whole supply chain or the portion of the goods used in the business operations. It covers everything from the production to retail, all the movements of inventory, etc. Management of TECH (UK) LTD. can be consolidated with this type of system to attain all the targets by efficient flow of stocks in the business manufacturing operations.
  3. Job Costing systems: This needs to collect direct materials, direct labour and overheads in an effective manner. Here are certain tools which could be implemented by the organisation for gaining sustainability. Tech (UK) Ltd can implement this system at the time when products are identical for tracking of the order expenses.


  1. Diverse kinds of management accounting reports:

Budget Report: - This report lay out the plan to investigate the organization performance at the time of creating evaluation about the department’s performance and also control the costs. For preparing the budget, the actual expenses which incurred in the past years get utilized (Lim, 2011). Forecasting the future budget based on this report which assists the company to consolidate the attempt of various departments towards the company goals and objectives.

Job Cost Report: - The job costs reports are basically concerned with identify the profits, costs, and expenses of each specific job. This report also makes evaluation of the cost at the time of project is work- in- progress henceforth, the waste areas can be engaged in consideration and the project can be completed more profitable to the company. All the efforts of the company are described in this report which helps the manager for future jobs.

Inventory Report:- The Company’s business operations are involved in the manufacturing processes is required to prepare the report so that their inventory and manufacturing processes can be more efficient and effective. This report which is prepared by the company in order to track the inventory level and make them accordingly in order to smooth running of business operations.

Performance report: Cited organisation while having manufacturing processes, form these kinds of report henceforth their inventory processes could become highly convenient and effective. This report have the per unit cost which are related to the labour, overheads and wastages of the costs which are linked to the stock.

  1. Importance of using above accounting reporting systems:

According to the above discussion all the useful method of management accounting reporting are helpful to the company to track all the important financial transaction in their prescribed lay out. By the help of all the reports which are discussed above help the company to analyse their performance level, minimize the wastage of the resources, eliminate the unwanted costs, improves their productivity, etc. These reports also helpful to frame the strategies, goals and objectives for the future (van Helden and Uddin, 2016).


  • Job Costing System: It will assist the company in estimation the all types of cost throughout the production process. Also helps in the determining the quality of the work done by the employees.
  • Cost accounting system: Tech (UK) Ltd could measure their effectiveness in manufacturing procedures and then help in preparing developments with implementing of this system.  It will also assist the manager of the company to fix the price and also in reduction of the price of the particular product.
  • Inventory management system: Tech (UK) Ltd can change and recover the accuracy of the orders along with the help of this system. It will improve the business efficiency and saves the money, time and also the unnecessary wastages.


  • Budgeting reports: The integration in between the organizational procedures related with the Tech (UK) Ltd and budgeting reports make a way for the activities of the business to do proper concentration on the budgeted outcomes.
  • Job cost reports: The business activities of Tech (UK) Ltd must be directed to the fulfilment of the cost objectives and this report make an easier way to the manager to decide the pricing strategies for the company.
  • Inventory reports: The integration in between processes which covered in Tech UK Ltd. and this report gives an effective management of inventory control and also gives estimation that how much required level of inventories are need in the production process.

Task 2


Marginal costing: This is the cost which contains the variable cost while calculating the net profits. This is also known as the net profits as per the contribution per unit. This is also known as the marginal costing approach which can be implemented by the company for assessing objectives in an effective manner (Gates, Nicolas and Walker, 2012). All the fixed costs does not consider while calculating the marginal cost.

Absorption costing: This is the method that can be used by the organisation in order to know about the product costs effectively. Various variable and fixed costs are to adopted while producing per unit costs.

Net profit using marginal costing



Sales value

Less: Variable costs

Stock at the beginning  

Cost of production

Stock at the closing              

Variable sales overheads                                


Less: Fixed costs:

Fixed Production overheads                         

Fixed Selling overheads                                     

Net loss                                                   























 Income statement as per the absorption costing:


Selling Price per unit


Unit costs


Direct materials cost


Direct Labour cost


Variable manufacturing overhead


Total variable production cost                       


Fixed production overhead

Fixed production overhead incurred actually

Fixed selling & distribution expenses

Variable selling & distribution expenses





15% of sales value

2,000 units



Net profit using absorption costing

Amount ï¿¡         

  Amount ï¿¡

Sales value                                                                                                        

Less: Cost of Sales:

Opening stock                                    

Cost of production                                                  

Closing stock      

(Under)/Over absorbed fixed production overhead

Gross Profit              

Less: Selling Expenses

Variable sales expenditure

Fixed selling expenditure






















Net profit/loss




In this case, the company is required to apply the management accounting tools and techniques to increases the profits. This will assist the Tech (UK) Ltd to run their business activities in sufficient and accurate way. The above methods are used by the management accountant for improving the productivity of the business. These tools are useful and important for each and every divisions of the company for making the effective and efficient decisions for the company’s growth and achieve their o