Accounting (Managerial) 530 Portfolio Case Study Essay

Imagine you are applying to become a trainee in a management consulting beau monde, Solutions Inc., which claims to deliver progressive solutions. They are looking for innovative employees who engage with their work. The selection process ordain be rigorous. You know you will be asked to submit reports base on questions regarding your knowledge of management be practice and strategic management invoice. To translate a context for the reports, you hurl been provided with a scenario in the form a case study on which the questions are based. To answer the questions you are going to arouse to do about research in the library. Giving you the questions is a method to test your selective breeding literacy skills. Submitting your answers in the form of reports is a way of testing your aptitude as an analyst and communicator.Scenario on which to base your report submissionsAssume you have been official as a consulting Management Accountant to an organization with rapidly maturem ent gross revenue and expanding customer acceptance in the surf wear garment target market 18-30 years. The clothing is sold under an increasingly accept brand name worldwide. Sales are made online -both internationally and topical anaestheticly, as well as through franchised outlets. The accounting frame has non unbroken pace with the growth and complexity of the company. It is even more critical for the company to take control of its finances in the legitimate slow rec overy of the U.S. and European markets.You have been given a list of issues listed below by the management of the company. In analysing the issues, the management of the company is concerned that the accounting system does not provide tight follow control, measure quality control, and does not provide a good basis for the budgeting system. No cost depth psychology has been get ine within the company to date.The management of the company wishes you to investigate the undermentioned issues given that manage ment wishes to maintain growth in this turbulent purlieuReport One ( put outs 1 to 3)Issue 1It is difficult to gain vigor the relationship between the stated cost of production and the selling toll for the various lines of clothing ranging from simple to complex clothing. According to the management We dont need a product costing system. About half(prenominal) of our product range is made in China and shipped to online customers from there so we avoid GST. The remainder of our production consists of a growing range of lofty value, small batches of swim wear, surf wear and wet suits. We apply a just-in-time approach so that our inventories are minimal. We have flyspeck influence over product charge as price competition is on the join on and brand loyalty isnt sufficiently strong to justify noncompetitive prices. Anyway, our accountant is already far too busy to bother with a product costing system.In your submission to the management, discuss the current no costing policy, and present an argument in support of labour an appropriate product costing system.Issue 2The managers of the company have been convinced that they need a better costing system for their local production. They have heard about Activity establish Costing and they cerebrate that it will improve the accuracy of the costing of their products. In your submission to the management, provide the conditions under which the use of activity based costing whitethorn be justified, and whether you believe there is a case to implement Activity Based Costing in this organization.Issue 3The management of the company has concerns that they do not know enough about the relationship between cost and profit. Include in your submission to the management, a discussion on the difficulties they may face in gathering the information they might need to choose out an analysis of cost behavior, and the development of a cost move in this company. A brief comment on the benefits the company stooge derive from a full understanding of cost behavior is to a fault desirable. Report Two (Issues 4 to 6)Issue 4The management wants to be able to predict the effect on profits resulting from changes in volume, be and prices. Prepare a submission for management on how this may be done, and the difficulties that they are likely to face in undertaking this sort of analysis.Issue 5Previously the company did not use budgets because the owners were the managers of the business and unaired to activities being managed and did not feel the need for budgets. As the company has grown, and the trading operations have become more diverse, professional managers have been recruited. Include in your submission an argument for budgeting, indicating the benefits of budgeting, and the factors to take into consideration when faced with uncertainty regarding sales growth.Issue 6The company has a need to make choices sometimes whether to make or buy certain of the products carrying their brand. On other make they are also required to make decisions on special prices when a potential retailer makes an offer to buy goods from them at a price lower than their normal price. The management currently make their decisions in these matters based on the average cost of goods sold in the previous accounting period. Discuss the concept of Relevant cost and benefits, and the type of accounting and non-accounting information they would need for such decisions.Instructions for the portfolio submissions1. Assume that the management of the company has little technical knowledge in management accounting. You would need to define terms and explain concepts to the management before linking those terms and concepts to your report.2. You must submit your responses in the form of two separate reports as followsa. Report 1 applications programme Issues 1 to 3b. Report 2 covering Issues 4 to 6You should read the Guidelines available on blackboard prior to writing up your report. There are strict requirements as regards formatting and layout.