The following quotation is from an address made by an officer of the British Mot
ID: 396772 • Letter: T
Question
The following quotation is from an address made by an officer of the British Motor Company: We can all, I think, take pride in the way cost accounting has kept pace with business development in this country. Tremendous strides have been made during the last quarter of a century, and I’m sure that much more progress will be made in the future. In fact, progress will have to be made if we are to keep the science of management accounting abreast of the times. The whole of industry is now operating on a different level than we have known before— a higher plateau, on which management accounting appears in a new light and becomes more and more significant as a factor in business management.
Required
1. What do you think is meant by the statement that “the whole of industry is now operating on a different level than we have known before— a higher plateau . . .”?
2. (a) What are the advantages of each region, division, and activity having its own accounting functions? Does this pose any ethical challenges?
(b) Are there any areas of responsibility of the CFO described in Chapter 1 that you would not transfer to the local accounting organization?
3. Draw three boxes on an organizational chart, one each for the corporate controller, the plant controller, and the plant manager. Draw appropriate lines between the boxes that would accord with the system described in the quotation. Use a dashed line to denote “staff management” relationship and a solid line to denote “line management” relationship. Describe some major advantages and complications of the new organization arrangements.
4. The plant controller must frequently fulfill two roles simultaneously, as a helper of the plant manager and as a spy for the corporate controller. How can accountants’ duties be organized to cope with these conflicting roles?
Can someone please assist with question 3?
Explanation / Answer
Answer 1:
For the statement “the whole of industry is now operating on a different level than we have known before— a higher plateau . . .” the meaning is as below
The industry is working on higher levels than the level it was working. There is a significant increment in the level of working of the industry. There are significant improvements have been noticed in the working of the industry and there are many changes have been observed. One of the major change is the use of accounting management in industry is very useful and effective. Earlier the level of industry was not high as compared to now. So a person who have seen the industry before and now can easily figure out that there is large difference in the working of the industry and the current level of working is high as compared to the level the industry was working earlier. The focus from British Motor Company is that the cost accounting is significant for the business and it’s development is aligned with the business development. Tremendous progress has been observed in recent past in the cost accounting area and we are expecting further improvements in this area such that it will reach on a good level of standards.
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