Page 7 - OCS Workbook - Day 2 Tasks (May 2018)

Chapter 8

MANAGEMENT ACCOUNTING (P1)

PRACTICE TASKS

EXERCISE 1 (BUDGETING)

UPDATE

The Board of Mansako is keen to develop the business within Asia as it is felt that other more
traditional markets are in danger of stagnating

Melanie Zhang (Sales and Marketing Director) has recently returned from the New York fashion
week. During the week Melanie spoke to many experienced people within the industry, all of
whom felt that the next high growth market for affordable luxury products would be China. This
was because of the increasing wealth and buyer power of the Chinese middle class. She also met
with some representatives of a Chinese trade federation who asked whether Mansako would
consider attending, or even sponsoring, a new fashion week to be held in Beijing in August 2018,
comparable in scale to those held in Paris or Milan.
At the next Board meeting Melanie outlined her thoughts to the other Directors and suggested
that the company attend and even co-sponsor the next Beijing Fashion Week. She felt it was
critical to boost the Mansako brand at an event where many prospective customers and buyers
would be looking at the next “new thing” in luxury bags. She further commented that she had
been in contact with the organisers and that there was still time to become a sponsor.
Joseph Carelli (Creative Director) agreed that the fashion week would be an effective way to
increase Mansako’s brand awareness but felt that the company should also consider developing a
new range of bags aimed specifically at Chinese customers.

Anders Bucatti (Managing Director) asked the senior management team to go away and explore
the possible implications of the Beijing Fashion Week proposal and report back at the next Board
meeting.

KAPLAN PUBLISHING 27