Due to the fact that the strategic costing technique firmly implies long-term future oriented attributes, it can facilitate the organisations to reduce different types of accounting uncertainties (Cadez & Guilding, 2008). Critical Review of Literature With respect to the significance of the strategic costing, Cadez (2008) has mentioned that the notion of strategic costing has become a widely used technique for the organisations in case of proactively performing their range of accounting practices. In relation to the present fiercely competitive scenario of the global business environment, the organisations seek to integrate well-built Strategic Management Accounting (SMA) techniques in order to efficiently attain their strategic goals (Cadez, 2008). Contextually, it has also been found from the study in Qucosa (2006) that the concept of strategic costing constitutes a broad focus beyond the notion of controlling or reducing organisational costs associated with its range of business operations. Moreover, the nature of strategic costing also encompasses cost information which is significantly recognised as one of the major attributes of making exceptional organisational decisions. In this regard, the study of Qucosa (2006) has further depicted a conceptual framework with respect to the major characteristics of strategic costing. Fig: Concept Strategic Cost Management (Qucosa, 2006) Philosophy: The philosophy of strategic costing can be considered as one of the major attributes which ensures to improve revenue as well as cost of the organisations. The concept of strategic costing significantly emphasises upon enhancing organisational productivity, capitalising in terms of profit enhancement along with augmenting customer satisfaction (Qucosa, 2006). Attitude: The concept of strategic costing constitutes a proactive attitude which ensures to encompass all the costs associated with the organisational processes that result from the management decisions. In this regard, the attitude of strategic costing involves six important elements such as holistic nature, market orientation, anticipatory approach, continuousness, participative and cross-functional attributes (Qucosa, 2006). Techniques: Techniques can be recognised as the major attribute that exists within the concept of strategic costing. The concept of strategic costing firmly involves reliable techniques that are implemented by the organisations in order to accomplish their desired goals or obtain overall needs (Qucosa, 2006). The notion of strategic costing can also be considered as an effectual curriculum for the organisations. In accordance with the viewpoints of Banerjee (2006), it has been revealed that an effective practice of strategic costing tends to facilitate the firms to frequently analyse and recognise their major cost drivers, thus helping them to minimise costs and increase the overall value of the firms. Such types of management accounting programme plays a vital role for the organisations in terms of preparing budget parameter as well as it also facilitates
MSc Strategic Accounting Table of Contents Part A 3 Strategic Cost Management (Strategic Costing) 3 A Brief Overview of Strategic Costing 3 Critical Review of Literature 3 Part B 12 (a)Identification of the Key Factors 12 (b)Development of a Balanced Set of Performance Measures for Bradtech 13 (c)Consideration of Other Important Issues 14 References 16 Part A Strategic Cost Management (Strategic Costing) A Brief Overview of Strategic Costing Strategic Cost Management (Strategic Costing) can be regarded as one of the effective and strategic oriented management accounting methods…
Management accounting is considered to be useful when it properly displays an external image and a futuristic picture for an organisation. Strategic Management Accounting on the other hand can be distinguished from other management accounting activities through its extensive external orientation; this extensive external orientation includes focus towards customers, competitors, suppliers and all other stakeholders that get affected by the organisation’s normal course of business.
Performance measures can be considered as metrics for monitoring the success of an activity and competence of the workforce in utilizing the available resources. Competence can be attained by maximising the output with the minimum number of resources. Improvement in competence can be achieved by providing fewer inputs that can be used to produce a particular amount of output.
The project report then looks at the aims and objectives of establishing a management accounting system and the characteristics of information flow at the strategic level. It also analyse the effectiveness of SMA system in the provision of information to assist the senior management team in the achievement of the corporate objectives at Highline.
A fusing connection among the variety of visions is involve in captivating a strategic direction, explanation and study of management accounting information, and rival's performances proposes the basic extent in favour of contrast.
Management accountants are perfectly trained and they have this ability potential and expertise to contribute along with the strategies and with the evaluating process to over those decision-making problems that they have in the market.
This necessitates the managers to have a thorough understanding and appreciation of the costs involved in different phases of the life cycle of a product in order to maximise the earnings of the firm. Stiff competition in the international markets, adoption of innovative technological changes and improved production systems have necessitated radical changes in the management accounting systems being followed by different manufacturing companies to remain globally competitive.
This point of view is well supported with both early (Solomons, 1952) and contemporary researches (Boyns and Edwards, 1997a). Needless to say, standard costing has come a long way before it became generally accepted.
Originally, cost accounting systems were mainly concerned with variable costs, such as labour and raw materials expenditures.
ds of 25 sizeable British firms serve as evidences for the statement that British entrepreneurs used standard costing methods even in pre-industrial period 1760-1850 (Fleischman and Parker, 1991), it is still considered that cost accounting began to attract wide interest of
Formulation of strategies necessitates a proper collaboration with all department like operation, marketing, HR, R&D, finance & accounting etc. These departments are the treasure house of potential information about the current
trategic management accounting which leads to evaluate an organization’s interaction between its product market and capital market, analyze the internal architecture of the company and its cost considerations so that it can be evaluated whether it is required to bring any
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