Management Accounting Pathways To Progress -Myassignmenthelp.Com

Question: Discuss About The Management Accounting Pathways To Progress? Answer: Intoduction From the above budgeting processes, various areas have been identified where improvements can be made to increase the profitability of Exhibition Furniture. The firm can use machine intensive methods for the production process in place of using manual labour services. The use of machine will not only help the company in reducing the total labour cost but it can also help the firm by enhancing its productivity. The labour force of the company may also require certain training or overtime premium if they stretch their working load. However, if machinery are employed in the management of desk, these costs could be prevented. Also the firm can enhance its profitability by increasing the selling price per unit of the desk to an acceptable extent. The firm can also increase the sale of desks by offering some attractive discounts to the potential buyers. The number of personal sales visits can be reduced so as to incur less marketing costs rather the firm must adopt other methods of marketi ng its products such as issuing various kinds of advertisement to reach more people who are willing to buy the furniture manufactured by the firm. Also, the change in the method of inventory valuation can also result in higher profitability (Horngren et al., 2002). The most appropriate method of inventory valuation is weighted average as in the case of Exhibition Furniture as the inventory of the firm is turning over rapidly. Hence, use of First in First out method of valuation of inventory is irrelevant in this case. The firm must also evaluate the option of producing the raw materials required to manufacture the desks such as Oak Top and Oak Legs so as to avoid the cost involved in the purchase of direct materials. The method of determining the cost of the desks manufactured by the firm, the technique of activity based costing must be used instead of using the traditional costing methods for setting the prices of the products. The best strategy to increase the sales of the firm is to adopt the attractive and cost-effective method of advertisements to reach the wide range of customers. Also, the firm must implement just in time method of inventory maintenance so that the cost of carrying the excessive inventory could be avoided such as warehou sing costs and interests costs on the funds blocked in purchase of unnecessary costs. Therefore, the firm must determine the economic order quantity of inventory to be purchased so that it can fulfil the demands of the customers within the reasonable time (Bromwich Bhimani, 2005). The use of above strategies and techniques of management accounting will definitely increase the sales and profitability of the firm. References: Bromwich, M., Bhimani, A. (2005). Management accounting: Pathways to progress. Cima publishing. Horngren, C. T., Sundem, G. L., Stratton, W. O., Burgstahler, D., Schatzberg, J. (2002).Introduction to Management Accounting: Chapters 1-17. Prentice Hall.