Page 13 - CIMA MCS Workbook February 2019 - Day 1 Tasks
P. 13
CIMA FEBRUARY 2019 – MANAGEMENT CASE STUDY
From a P2 perspective:
The primary responsibilities for the student are associated with management accounting.
Lack of performance measurement
The company relies heavily on quality and efficiency but it’s not said how these are measured.
The FD is a dentist rather than an accountant, although he does have an experienced financial
manager working for him. There is a danger that not enough attention is being paid to
performance measurement and management.
Lack of breakdown of cost data
The business is profitable but without a detailed understanding of cost data it is unable to
calculate the profitability of individual services and so will not know if these are profitable enough
or where improvements can be made. It is difficult to track many of the actual costs incurred, so
perhaps a system of standard costing would be useful.
Capital asset replacement / financing
The business uses a significant amount of capital assets in its practices. This machinery needs to
be kept up to date to maintain the company’s reputation for high quality and to keep its staff
motivated by opportunities to keep up to date with modern technology. There is no indication of
how this is financed, although the company doesn’t have any long‐term liabilities so it may be
assumed that the assets are bought outright. The company will have potential issues with
financing of these assets and should also consider leasing as opposed to buying.
Reliance on IT systems
The company is very reliant on sophisticated IT systems and should therefore have backup plans
in place for if these fail. They also deal with client data and should ensure that measures have
been taken to ensure confidentiality and security of this data.
Control
The company has been very acquisitive and many of its practices have been acquired and
integrated into the business. There may be issues with the control of these practices, especially
with such a flat organisational structure.
10 KAPLAN PUBLISHING
