Application of Management Accounting in Company Sustainability

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DOI: https://doi.org/10.30564/jmser.v5i1.4444

Abstract:

This report illustrates how management accounting can be used in helping an organization reach sustainability by applying four main tools in management accounting to a dairy company. These tools are LifeCycle Analysis, Identification of Relevant Costs, Activity-Based Costing (ABC) System and Balancing Score Card, all of which can help qualify and consequently quantify the various costs (including environmental costs) incurred during the operation of a company. Besides that, the above tools can also be utilised in a company’s decision-making processes by the man-agement team. Thus, it is suggested that companies integrate these tools into their reporting system. This report illustrates the definition of a sustainable organization in the beginning, followed by detailed descriptions of the four management accounting tools, together with their applications to a diary company. The report ends with a summary on which type of role each tool plays in the re-porting system.

References:

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