Operational Management Accounting

Running head: OPERATIONAL MANAGEMENT ACCOUNTING
Operational Management Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1OPERATIONAL MANAGEMENT ACCOUNTING
Table of Contents
Introduction:....................................................................................................................................2
Requirement (a):..............................................................................................................................2
Requirement (b):..............................................................................................................................5
Requirement (c):..............................................................................................................................7
Requirement (d):..............................................................................................................................9
Conclusion:....................................................................................................................................10
References:....................................................................................................................................11

2OPERATIONAL MANAGEMENT ACCOUNTING
Introduction:
The current assignment aims to analyse the provided case of General Productions (GP),
which is involved in producing electronic products. For raising its sales and profitability,
different management members have certain views, which are assessed in this paper. After the
identification of the suitable solution, adequate evaluation would be made regarding the benefits
to be received by devising out budget system for the cost management of the firm. In addition,
the significance of activity-based costing (ABC) system is discussed for assuring accurate
product pricing. Finally, the assignment would shed light on detecting the effect of change in the
accounting method of inventory on unfavourable variance in gross income of the firm.
Requirement (a):
It has been identified from the case study that GP is a manufacturer of electronic
products. The electronic components are customised for selling purpose to different customers
including MNCs and SMEs. From the case information, it could be seen that four senior board
members of GP have provided contrasting views for boosting sales and profit and they are
analysed briefly as follows:
Proposal of the Head of Research and Development:
From the perspective of this individual, new features have to be developed in relation to
the new mobile phone lines. The reason is that sound designs would aid in ensuring the success
of these mobile phones. In addition, by including the new features, GP could be able to price its
phones at increased premiums (Abdelmoneim Mohamed & Jones, 2014). On the contrary,
charging higher prices might result in loss of customers, as they would tend to buy similar

3OPERATIONAL MANAGEMENT ACCOUNTING
products sold by the competitors of GP in the market at cheaper prices. Hence, this proposal
would have unfavourable impact on sales and profitability of the organisation.
Proposal of the Chief Marketing Officer:
This individual has emphasised on utilising social media in order to market the new
mobile phones of GP. Along with this, the celebrity bloggers and local celebrities could be used
to attract the customers towards its products. In the provided scenario, it is noteworthy to
mention that there has been increase in number of active users in social media such as Twitter,
Facebook, Pinterest and Instagram. Hence, using one or two of these platforms could assist GP in
increasing its exposure to the users. One added benefit of using social media is that GP does not
have to incur any registration fee and hence, investment would be made in the form of time.
Furthermore, majority of these platforms provide the facility of paid advertising options and by
using the same, the organisation could raise its follower base (Ahmad, 2014). Lastly, two-way
communication could be ensured with the help of social media and therefore, GP could form
sound relationships with the meaningful and potential customers.
However, this proposal has certain limitations having the potential to affect the sales and
profitability of GP adversely. The primary limitation includes negative feedbacks of the
unsatisfied customers and even some disgruntled employees could post such feedbacks in the
platforms as well. Owing to such adverse response, it would be difficult for the organisation in
retaining its current customers and as a result, there would be sharp fall in its revenue and profit
margins in the market (Balakrishnan, Labro & Soderstrom, 2014). In addition, GP has to spend
additional effort and time in order to maintain its presence in social media. The reason is that as