Management Accounting Control

You are an advisor to a manufacturing firm called Active Sports Life which produces female sportswear. Recently there has been a reduction in the sales revenue of this firm as a result the Operations Manager has issued the following statement: ‘The standard costing principles within the firm are at odds with modern business needs such as continual improvement and responding to individual customer needs. Although the “McDonaldisation” of the firms operations has led to reduced costs due to standardizing services, it has also resulted in reduced customer service and individuality which ultimately resulted in reduced sales revenues over the period 1 March 2014 – 28 Feb 2015.’ In response the Operation Managers statement, the CFO of Active Sport Life has asked you to critically evaluate the implications (limitations and benefits) of retaining the standard costing system and make appropriate recommendations.

Required: Make these recommendations in the form of a report of 1000 words.

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