Strategic Management Accounting

3595 words 15 pages
Show More
TABLE OF CONTENT
Executive Summary …………………………………………………………………...................2 1.0 Introduction …………………………………………………………………………………...3 2.1 Economic Theory ……………………………………………………………………………...3 2.2 Costs …………………………………………………………………………………………...5 2.3 Cost – plus Pricing …………………………………………………………………………….5 2.4 Production Mix Decision …………………………………………………………..................6 2.5 Target Costing …………………………………………………………………………………7
Conclusion …………………………………………………………………………….................8 2.0 The Role of Standard Costing …………………………………………………….................8 3.6 The Role of Variable Analysis ………………………………………………………………...9 3.7 The Values and Limitations of Variance Analysis …………………………………………..10 …show more content…

This sensitivity of demand to changes in price is referred to as Price Elasticity of Demand. Elastic demand is when a small change in price causes a larger change in demand i.e. price elasticity is more than 1 (refer to appendix A). This means that if there is a fall in Manac’s prices, this would increase demand considerably, which would result in an increase in total revenue, but if they were to increase prices, this would cause a substantial decrease in demand and there would be a fall in total revenue. Elastic demand could exist because there maybe substitutes for the products offered by Manac. On the other hand, when there are no substitutes and customers place high value on the product it is said that demand is inelastic. Inelastic demand is when a small change in price causes a smaller change in demand i.e. price elasticity of demand is less than 1 (refer to appendix A). A fall in the prices will increase demand for the products, but not by a sufficient amount to maintain the previous revenue levels and a rise in price will increase total revenue.
If Manac’s price elasticity is high they will have difficulty in situations where cost inflation is higher than price inflation, because setting prices in line with costs will cause a disproportionately large reduction in demand and total revenues will decline. During inflation times it would be best for Manac to increase prices by a small amount each time, as customers do not appear

Related

  • APC 309 Strategic Management Accounting
    3568 words | 15 pages

    Module Title: Strategic Management Accounting Module Code: APC309 Individual assignment SUNDERLAND BUSINESS SCHOOL Date: 16/04/2011 Introduction: As Gowthope (2005, p.148) said that: “A budget is a plan, expressed in financial and/or more general quantitative terms, which extends forward for a period into the future. Budgets are widely used in organisations of all types and sizes.” –Budgeting actually refers to the process that, after the strategic plan of the business has been made, companies….

    Show More
  • MBA detail course outline
    1321 words | 6 pages

    & 14) General Management 1st Quarter Effective : Spring Quarter 2011 Human Resource Management Finance & Accounting Banking & Finance • Organizational Communication • Organizational Communication • Organizational Communication • Organizational Communication • Principles of Management • Principles of Management • Principles of Management • Principles of Management • Research Methods • Research Methods • Research Methods….

    Show More
  • Chapter 1--Introduction to Accounting Information Systems
    7316 words | 30 pages

    Chapter 1--Introduction to Accounting Information SystemsChapter 1--Introduction to Accounting Information Systems Student: ___________________________________________________________________________ 1. The three themes of the text are operating systems, e-business, and internal control. True False 2. In an assurance service the accountant will provide the original information used for decision making. True False 3. Information systems reliability and electronic commerce have….

    Show More
  • Functional Areas of Business
    1100 words | 5 pages

    Analyzing the functional areas of Management Adrean D.Thomas MGT/521 September 3, 2013 Dr. Machen Analyzing the functional areas of Management In all types of businesses (big or small), managers play a key role in the efficiency, profitability, and functionality of how the business meets its goals and successes. The purpose of managers are to oversee and coordinate the work of others. As managers, it is important that ensure that the business’ greatest resource, which are its employees….

    Show More
  • Usefulness of the Balanced Scorecard
    2031 words | 9 pages

    report is to assess the usefulness of the balanced scorecard (BSC) model within a business and strategic management accounting. To acquire such information, the model will be applied to a company and then critiqued giving both the benefits and any practical implications regarding the use of the BSC. The BSC was introduced by Kaplan and Norton (1992) as a new approach to strategic management accounting. ‘The purpose of the balanced scorecard is to guide, control and challenge an entire organisation….

    Show More
  • Role of Managerial Accounting
    10336 words | 42 pages

    Chapter 01 The Changing Role of Managerial Accounting in a Dynamic Business Environment True / False Questions 1. Controlling involves the coordination of daily business functions within an organization. True False 2. Measuring the performance of managers and subunits is not an objective of managerial accounting. True False 3. Middle-level managers would likely be considered internal users of accounting information rather than external users. True False….

    Show More
  • Acct3102
    1082 words | 5 pages

    Accusations against Stephen Richards permitting the backdating of contracts unlawfully were confirmed, giving sanction to the unethical nature of his behaviour. Henderson describes that illegal behaviour will not be deemed unethical when the legal system, accounting profession and society all agree upon the….

    Show More
  • Case Study ：Xero and Mcdonald's
    3370 words | 14 pages

    Introduction Xero and McDonald’s are two objects that will be analyzed in this essay. In terms of Xero, an online accounting software company, the essay will focus on Xero’s business strategy by using Porter’s five forces model and Xero’s sources of competitive advantages by using Porter’s value chain model. Also, the roles and competencies of CIO, CTO and CPO will be discussed in the case of Macdonald’s Australia. Finally, based on Macdonald’s, it will analyze the importance of information system….

    Show More
  • gdhethe
    4889 words | 20 pages

    Understanding Strategic Management UB: Understanding Strategic Management A Strategic Analysis of Pizza Express. Industries: Restaurant/Retail FAO: The Board of Directors. Word Count: 2495 (not including Tables or Executive Summary) Report prepared by UB: Module Leader: 1 Understanding Strategic Management UB: Executive Summary Pizza Express is a key player in the Restaurant Industry. It is one of the biggest chains in the casual….

    Show More
  • Wobbly Wheels Distribution Center - IT Strategic Plan Part 1
    970 words | 4 pages

    Wobbly Wheels Distribution Company NAME TEACHER SCHOOL DATE Part 1 Business IT Strategic Plan According to Wobbly Wheels (WW) Distribution Company, their environment of operation is affected by several other business environment factors like the effects on its personnel and the technological implications of the system. In developing a new IT strategic plan, Wobbly Wheels Distribution Company will have to consider the effects on its personnel. The new plan must be a morale….

    Show More

Popular Essays