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Fletcher Building Advanced Management Accounting Report

   

Added on  2020-04-07

10 Pages3246 Words85 Views
ADVANCEDMANAGEMENTACCOUNTING Fletcher Building Ltd (FBU.NZ)

Fletcher buildingAnswer to 1Mission and vision statement are the most vital ways that assist various companies to enact change. Even companies already pursue their own mission, vision, and strategies, yet many lacksor disregard some serious issues. In relation to this, a new mission, vision, and strategy for Fletcher Building can be ascertained that can allow it to develop more in the future.Fletcher building realizes that the best-performing companies always combine their strategies with their mission and vision statement so that a great culture filled with accompanying values can be created. Therefore, the best mission and vision would be the fulfillment of major six values. Firstly, innovation wherein Fletcher must find new ways to advance and create new opportunities so that it becomes effectively receptive to changes. Secondly, it must value people by developing, identifying, and retaining individuals within their organization. Thirdly, Fletcher must intend to focus on change and proceed by thinking big and starting small. Fourthly, it must combine its skills and experience by operating collectively so that the company resources can be easily leveraged with efficient communication. Fifthly, the company must aim to possess strong beliefs in the entire industry (Fletcher building, 2017). This can be done by being enthusiastic and considerate about its contribution to the overall community. Lastly, the company must possess a transparency of its purpose so that it can easily do the right thing at the right time. Withthe help of this new vision, Fletcher Building can easily cater to the needs of the entire community. Besides, it can build better with the guidance of such new mission and vision statement. Furthermore, the strategy adopted by the company does not allow it change and keep pace with such change. This is very vital in the industry wherein the company operates because itcan not only survive but also develop with the help of a strategy that allows it to align with market fluctuations. For such purpose, Fletcher Building may frame its strategy around four building blocks of enhanced corporate performance. They are commercial transformation, adoption of an asset-light approach, cost leadership, and sustainability respectively. Moreover, it can be seen from the annual report of Fletcher Building that it has mature products that can allowit to thrive in such competitive market. Thus, if the company successfully employs a harvest strategy instead of a build strategy, it can easily attain its objectives of building better and together (Vanderbeck, 2013). The reason behind this can be attributed to the fact that a harvest strategy has more certainty, predictability, and change than a build strategy. Besides, a harvest 2

Fletcher buildingstrategy is beneficial for organizations that possess mature products enjoying an enhanced share of the market in lesser growth industries (Fletcher building, 2017). In addition to this, if Fletcher Building adopts a harvest strategy, it can become more manageable and stagnant to maximize its flow of cash and profitability. Therefore, this is the reason why a harvest strategy would be morebeneficial in the case of Fletcher Buildings.Answer to 2Fletcher Buildings is utilizing the activity-based costing system in order to derive more explained information regarding the cost. Such system are not needed for the purpose of external financial reporting, activity based costing is done apart from the process or job-order costing. In this scenario, the company is using manufacturing, as well as non-manufacturing costs (Fletcher building, 2017). Fletcher Buildings is engaged in the manufacturing and distribution of building materials and might incur costs in the process of ordering, setting up of machinery, packaging and post sale processes of customer services. In the case of Fletcher Buildings the ordering cost is assigned like the ordering system to products. When the ordering gets completed, the costs canbe added to the cost of the product till the time the entire project gets completed (Drury, 2013).Activity-based costing leads to an accurate way of product or service costing thereby providing abetter decision based on pricing. The understanding of the overheads gets enhanced along with the cost drivers and thereby makes costly and non-value activities to be more visible in nature. Hence, it allows managers to lessen them. ABC leads to an effective challenge when it comes to the process of operating costs so that better means can be traced and overheads can be eliminated. It even helps in enhancement of the product and the profitability evaluation of the company manifolds (Marsh, 2009). The performance management notions of the company enhance and continuous improvement can be projected. The system of ABC leads to direct allocation of the indirect costs that are based on the cost driver of the product or the factors that develop the cost (Drury, 2013). When the costs are allocated in terms of the product then the scenario starts to develop in terms of the processes that is performing in a strong manner and the ones that need to be enhanced. ABC can be utilized to trace the non-valued activities and can lead to better allocation of the resources to efficient, as well as activities that are profitable in nature. Further, the utilization of ABC for Fletcher Buildings can lead to the value addition and regular enhancement in the process of the business. The best move for the company is to have 3

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