Group Project

The purpose of this Group Project is to test your understanding of the core concepts of
Management Accounting that have been introduced in the course and their application in real life
situations.

Organizations use Management Accounting information for planning, controlling and decision
making. Management Accounting principles are also used to quantify the strategy and drive it down
the organizational hierarchy. The need for this information varies according to the nature of the
industry, the strategy adopted by a firm within the industry, the hierarchy of the person within the
firm and of course, the purpose for which information is needed; viz. planning, controlling and / or
decision making.

You are required to identify these disparate information needs within a firm and assess their
appropriateness given the firm’s strategy. You may do this through networking your contacts,
supported by observation and research. More specifically, at the very least you must do the
following:

a) Identify the firm’s chosen strategy and give reasons in support.

b) Understand the cost structure, basis for product costing (especially how Indirect Costs are
allocated), level of operating leverage

c) Is there sufficient Margin of Safety? Sensitivity of firms profitability to changes in sales

volumes; your views on capacity utilization and its impact

d) What system of cost control is adopted by the firm

e) You may wish to comment upon what the firm could do differently.

Before you visit the firm, you may wish to do a financial statement analysis of the firm chosen or
one in a similar business for at least 2 years. During your visit try to find out what kind of
management accounting information is used by the firm and how does it help them in decision
making

You will be graded on your ability to identify the information needs and juxtapose these with the
firm’s strategy justifying whether these are appropriate or not and comment on their adequacy. You
may also wish to provide suggestions on what the firm could do differently.

You need to submit your projects in a written report (60%), not exceeding 10 double spaced pages
excluding appendices by 12 noon on 17th August, 2018. You will also be required to make a
presentation (40%) not exceeding 10 minutes, on the project on 18 th August, 2018. You must
submit a full set of slides of your presentation before the beginning of the first presentation.