Question

4. Explain how an organisation’s management accounting system (MAS) can contribute towards the development of a cost leadership strategy. (190 words)

Answer 1

The Management Accounting system is a well-established process that verifies each and every functionality of the target. in this there is two-part a) motivational and b) design choice. under motivational again there is two more sub-parts i) goal congruence and ii) management effort. this describes the setting of inputs. under design choice two sub-parts are there i) responsibility center ii) information transmission mechanism, which will provide performance evaluation and all the best and optimal strategy will be rewarded.

Describing cost leadership strategy, where a company is a most competitively priced product on the market, meaning it is the cheapest. for example, McDonald's.  in this cost leadership it is difficult for many small businesses to compete with conglomerates on cost leadership, there are examples you find at a local level.