Factors Affecting Management Accounting

Part A.
The external environment:
According to the study.com website, the external environment is all the outside factors of an organisation which can create an impact in running the business. The organisation must have to be very much aware and work properly towards the external environment for the flow of operations in an organisation. Micro-environment and Macro environment are the two types of the external environment (Study.com, n.d.).
From the above-mentioned definition of the external environment of the business makes clear that the management accounting system must have to keep a close eye on the external business environment and must be analysed and monitored them accordingly. The person who is working as a management accountant must have to be very much capable to make the plan and strategy very quickly as per the demand of time which can help the organisation to lead towards the organisational goals. For the change of the external environment, globalisation is also played the main role. Because of the globalisation, the countries developed very vastly, as a result, cause the big market for the organisation in the global platform. To launch the product in the global arena the company must have to spend a big amount of money which will obviously increase the expenses of the company. It means if the expenses increased every year there is two option for the company which is either to increase the price of goods to the customer or to minimise the unwanted expenses which the company is doing.
Increasing the cost of goods might create a bad impact on the customer so it is very best to find out the unwanted expenses where the company is doing after that management accountants can work to minimise those expenses and comes up with the possible outcome for the success of the organisation. Management accountants must also be focused on leadership and proficiency to maximise the company’s competitiveness (Langfield-Smith, Smith, Andon , Thorne, & W., 2017). Regular communications between management accountants and managers are very important for this. For instance, 10 years ago there was a very popular factory called Sangai clothing. The clothes made by this company was very much popular in the Chinese market. But due to the influence of globalisation people were able to get clothes which was an import from other countries at a very cheap price as a result people started buying the cloths made by Sangai Clothing as a result the government of China announced that the company is no more exist. The main reason for the closing of this company was due to the external environment.
Technology:
Business all around the globe is facing a situation where it plays a vital role in changing the landscape. It is one of the important factors about designing the management accounting of an organisation (Sofigate, n.d.).
In the 21st century technology has been uplifted to the special level and it helped organisations to attach with the customers as well as the market in a better way and lower the prices in many ways. Advanced technology has helped management accountants to supply the information to managers in a very better way. Not only that it even helps to support businesses in record keeping. For example, lots of records can be kept in the cloud, hard drive etc nowadays. 100 years ago, no one has even dreamed about this. There is Kantipur media in China which is one of the biggest media company in China. It was established in the year 1993.
This company operates five widely circulated print publications. Before this, there were other media in China which was established many years ago but they did not much focus on the use of modern technology as a result of today Kantipur is the membership to the World Association of Newspapers and News Publishers whereas other media are still struggling to be able to exist in the market. The main reason behind their success is that they always keep on upgrading modern technologies within the market. People can’t wait for news until next day to read in the newspaper because of that they upgraded their digital media as a result public get the chance to read the newspaper in every hour. Not only that they also have Kantipur publication which follows the latest printing technology as a result even old people can read a newspaper and enjoy the picture on it very easily because old generation people are still beyond the use of technology, but they also are not familiar with that. Kantipur focus on both digital and publishing newspaper which means they focus on both the group i.e. young as well as old (KMG, n.d.).
Organisation size and complexity:
Organisation size and complexity. It is said that there is a direct relationship organisation size and complexity which means if organisation size is bigger then there is more complexity whereas if there is a small size of organisation there is less complexity. If the organisation has many departments it is often considered as a complex organisation. When the company expands the organisation level most must extend to more levels. As a result, it makes the management accountant job more challenging at this stage. Where there is challenging there is an opportunity as well. So, if management accountant able to handle the complexity he/she can reduce the prices and make the returns higher to the organisation. For example, a shoemaker company produces one model shoes in a small market but later on when that shoes become popular the company think to expand their business all around the country as well as add different models of shoes according to the feedback they received from their customer. When their business grew up the size of the organisation also gets larger and complexity. In this situation, if the management accountant of the organisation can manage and reduce complexity, they will reduce the costs. Doing that management accountant must have to find out the factor which causes more complexity and wipe out them. It even leads the employees working in an organisation better satisfaction.
Strategy:
It is the plan of action which is designed to achieve the goal. Strategy not only used in an organisation it is used everywhere to achieve certain goals. It’s considered to be an idea intended to accomplish the objectives of an organisation. It’s a long-term process which helps the organisation to take care of the benefit in the structure of its assets in an evolving environment at a same that it also helps to fulfil the customer demands. The management accounting must create an extended-term strategy for the organisation which can cause higher returns and have a lead over the competitors. They ought to execute proper strategies to take care of the track. For instance, nowadays many supermarkets are selling their goods and service at a cheaper price through an online platform which helps them in future to minimise the labour cost if the customer has the habit to buy through online as a result company will manage expenses. Not only that many supermarkets offer some gift vouchers or different gifts to customers during the holiday time like Christmas, New Year, Queen’s birthday, Easter etc (Langfield-Smith, Smith, Andon , Thorne, & W., 2017).
Organisational culture and management style:
Organisational culture describes how workers execute activities and communicate with others in an organisation. The cultural framework of a corporation is formed from different ideas and principles that regulate the working sort of employees in an organisation. Management accountants got to fix the culture accordingly to realise the goals of the enterprise. The organisational culture may be a key which ties the workers with one another and deliver guidance to the business. For instance, if there is no tobacco culture practised in working premises but if someone break that organisational culture that will lead towards the conflict as well as create a rivalry (Langfield-Smith, Smith, Andon , Thorne, & W., 2017).
B.
Part B: Strategic Management Accounting
Strategic management accounting techniques was 1st introduced in the year 1981. At that time it was defined as “the provision and analysis of management accounting data about a business and its competitors, for use in developing and monitoring business strategy (cimaglobal, 2015).” There are very attempts has been made to refine and polish the definition of strategic management accounting. 
Collection of competitor information:
Research needs to be done by management accountants to get knowledge and understand what is going around their business what sort of things their competitor is doing to upgrade their business. To do that management accountant must have to find out the competitor of the business. In the business environment, there are numerous companies which are selling the same products and services to the customers. To tackle in the market the management accountant wants as much information of competitor so that he/she can learn about the competitors.
Collecting information about the competitor is one of the main strategies of businesses. Some company believes that there are no advantages of collecting the competitor information whereas some companies take it very seriously and track the information of competitor very carefully. The reason some company don’t want to collect the competitor information is that they think that the item or services which they are providing to the customer are very unique in nature so customer going to adopt their product or services at any cost so they think it will be a total wastage of time and money if they collect the competitor information. It is very necessary to monitor what the competitor is doing to upgrade the business (Langfield-Smith, Smith, Andon , Thorne, & W., 2017).
I am agreed with this statement. Collecting competitor, it is going through the various processes or stages. Management accounting must have to find out the competitor of the business. For example, there is many companies in New Zealand stock exchange where we can see all the financial report of the company. Through that financial report management accountant can see the financial health of the competitors. That will help management accountant to make strategies and improve the financial condition of the company. Hype is the shoes manufacturing company recently launched in Wellington and it does better than Rebel sports in this case the management accountant can look out how they do better than them because of that customer prefer their product. In that case, management accountant can see some customer feedback and make the strategy to make the same product so that they can attract more customer. Collection of competitor information is not only the financial information it can be other information as well which can help management accountant to make better strategy and uplift the performance of organisation.
Once Rebel identifies their weakness, they can fix that and be more advanced and convert that weakness into its strength by competitive analysis.
Exploitation of cost reduction opportunities:
The management accountant must always need to try to minimise the cost of goods and services as much as possible. Organisation should always keep an eye on the competitors to reduce the cost of goods as well as at a same time company must have to try minimising the cost by using the proper cost tools, making proper budgets to control the cost. 
If there is any non-value adding activities which is going around the business the company must have to identify those activities and work on those to minimise the cost.
The company must have to minimise the cost without reducing the quality of product. For example, if the cloth manufacturing company is spending too much money in buying the cotton they can work out whether they can buy from overseas or change the supplier who can supply at a cheaper price so that it might cost them less, as well as they, can buy the big amount so that they can save some freight charge. It is not only to improve the revenue of the company but also to make healthy expenses.
While minimising the cost the management accounting team must have to be much more aware of the quality of products or services they are providing to the customers. Because customers are the backbone of every business, the business must have to be aware that unhappy customers lead the business towards an unhealthy situation. For instance, the cloth manufacturing company is reducing the cost of the product by making the low-quality products it will create an unhealthy relationship with the customers as a result it will create really a bad impact on the customer which will obviously drop down the revenue of cloth manufacturing company.
It is very necessary to understand that the quality of the product cannot be compromised while reducing the cost. In some cases, the company can minimise the cost by using advanced Machinery. For example, in the clothing company, they can use some advanced Machinery which does work fast and ineffective way so that they can reduce some human resource. It will cost more while investing for the 1st time in advanced technology but while thinking about a long time it will be cost-effective because the company can reduce some human resource it means they can save some money on wages and salary, insurance, theft or fraud in the company will be decreased as well (Langfield-Smith, Smith, Andon , Thorne, & W., 2017).
Matching of accounting emphasis with strategic position:
The process of making the record of all the data in such a way which can be used in future to make a better strategy is called the matching of accounting emphasis with strategic position of the company. those data can be used in the future to make a proper strategy.
I agree with this statement. For example, if the restaurant have all the data and they look after the data of last 2 or 3 years where they make more sale. Ifs restaurants make more sale during the winter season. In that case, they can track what was the reason they make more sales on that specific time. So that they can follow the same strategy which they did in winter season to increase the sale in the summer season (Inbar, 2020).
Part C:
Strong correlation between environmental uncertainty and budgeting
There is strong correlation between environmental uncertainty and budgeting. Environmental uncertainty means the time period where that environment is not suitable for the business. For example, many of the hotel industry might have prepare the budget for marketing purposes. But due to the Corona Virus people are not allowed to go for holiday. Hotel industry have never predicted about this situation. Instead of doing the marketing, hotel industry can spend that budget for other purposes like repair and maintenance that will help hotel to increase the value and as a result when the situation gets better, they can attract more customers. 
Management accountant must have to analyse for future and change accordingly if the situation is beyond the control (i.e. environmental uncertainty). Business must have to think about all the environmental uncertainty which may arise in future that is either the business’s weakness and strength, threats and opportunity. Business should have to plan about the future to minimise the risk of environmental uncertainty which may arise in the future.
So, we can consider budgeting as one of the majoring tools which can identifies the accounting success factor depending upon quality and goal of the enterprises.
The budget or the financial plan which keep on changes according to the company needs is called a flexible budget. It may refer to the whole company or certain departments. The person who designed this budget makes it flexible because a specific company or department needs may not be the same. Some department might need more whereas some might need less (Market Business News, n.d.). This budget is allocated on an hourly basis. For example, the business can increase the amount of budget which they have undertaken before as well as they can decrease some budget which is not useful. If management accountant feels like the company can do more better if they invest more on sales and marketing and focus on more digital marketing to increase the sales of the company, in that case, the team can increase some more budget for the sales and marketing. In this way the flexible budget is fruitful. The main reason of the flexible budget is the increase the efficiency of work because sometime there might be more budget allocated in certain department whereas less allocated in some department, in that case, the budgeted amount can be changed. It is built to adapt to the growth in costs of interest. When the enterprise faces modifications, the flexible budget range can be effortlessly adjusted in compliance with the amount of operation completed. As a result, budgeted and actual degrees may be as compared on this foundation. For instance, new supermarket plans to launch in ten places in Nepal but later they start up with one best place for the organisation at a reasonable rate (Langfield-Smith, Smith, Andon , Thorne, & W., 2017).
Activity Based Budgeting:
Activity-based budgeting is the process of designing the budget based on activity-based costing. That is using data which is provided by will not use past year information. Instead, it generally analysed the different cost as well as the activity involved in the organisation. Under the basis of cost and activities, various researcher done in an organisation and under the basis of the outcome of result budgets are prepared under the resources are allocated to the activity. This method of budgeting generally done on activity-based costing. Any operation in a business that generates a rate is reviewed for opportunities to generate efficient profits. Those results may be taken under consideration at the same time while the budget is creating. This approach allows for greater flexibility of the budgeting process. Income and fee forecasting are completed at a detailed degree that gives critical facts on forecasts. It facilitates managers to have greater control over this procedure. This additionally helps the budget to be healthy to achieve the milestones of an organisation. ABB identifies all the areas which drive the cost of the organisation. All the ranges related inside the operation and all the applicable sports that are part of the employer could be taken under consideration. As a result, the expenses of the company may be reduced and better the returns. 
ABB generally provides three types of information. They are as follows:
Activities to be done for the next year (order or delivery)
No of activities (How many orders or delivery need to be taken)
Cost of activities (How much money spend on delivery)
Planning, resource allocation, coordination and controlling and evaluating the performances are the major components of the budget. There may be anything that might be occur in business in future like as corona virus which makes uncertainty in the business environment. So, it is very important to do proper planning to deal with those uncertainty and find out the best way to deal with that problem. Planning includes the allocation of resources so the organisation must have to allocate the budget properly to all the departments. Like the above given example of marketing budget of hotel industry can be changed to repair and maintenance because due to the corona virus no one can go for trip. 
Once the budgeting is done is the manager will be accountable to achieve the milestone of the organisation by having the proper communication and coordination with the employees. Manager always have to try to motivate their employee to perform well as per their capacity and give some reward to the best employee that will help the efficiency of work in an organisation as well as it will make other staff to do better in future to perform well.
Management accountant team most must make the competitive strategy to be cost effective (i.e. reduction of cost). To achieve the good return management accountants must have to work hard to reduce the cost of the organisation without reducing the value of product. If they raise the price of the products or services that will create the bad impression in customer mind. If company is selling the dumplings for $20 and they make $4 profit from that which means the cost of dumplings is $14. In this case, company should work hard to reduce the cost for preparing of dumplings to $12 so that they can make $6 profit. Cost can be reduced by hiring the quality staff, purchase the goods in bulk amount etc. So, for this whole process the dumpling’s owner must make the budget to analyse the cost reduction.
Correlation between competitive strategy, strategic cost management and budgeting:
There is a correlation between competitive strategy, strategic cost management and budgeting. Competitive strategy means the planning which is done for long term period of the business to achieve the competitive advantage against the competitors. It means the company making the value of brand high by providing the quality products and services to the customers. For example, there are many laptops available in the market. If the Dell laptop company gives the true and fact information to the customers, it will help them to tackle in the business market.
Cost and differentiation are the two competitive sources of the competitive strategy.
Cost leadership: This means reducing the producing cost in compare to business competitors so that the business can sell the same product in cheap price. For example, most of the business is now offering the online services and we can see that online shop is cheaper than the supermarkets. If people have the habit of doing online shop, there will be less HR required in an organisation as a result company can deduct the labour cost and they can sell good in cheaper price to the customer (Langfield-Smith, Smith, Andon , Thorne, & W., 2017).
Cost focus: This is the concept where business try to focus some age group market and sell the goods in the cheaper price compare to their competitors. For example, most of the schools of Nepal do not take tuition fee to one student if three students who is from same family (Langfield-Smith, Smith, Andon , Thorne, & W., 2017). 
Differentiation leadership: In this strategy company makes their product unique than their competitors as a result business can charge good amount to the customers who wants that specific product. For example, every year iPhone comes with different features which is unique then their competitors as a result although it is very expensive customer still buying it for their unique features (Langfield-Smith, Smith, Andon , Thorne, & W., 2017).
Differentiation focus: This is the strategy which fulfils the narrow markets demand with their unique features (Langfield-Smith, Smith, Andon , Thorne, & W., 2017). 
Sources of inaccuracies in an ABB system
Activity based budgeting is very time consuming and costly in compare to other budgeting. All the cost which is occurred in business is tracked and recorded as they occur. Moreover, the accountants who deals with ABB must have a very good knowledge of the business process. If the production cycle is complex it might be difficult in the businesses. The organisation must have to decide on time whether the increased forecasting is worthy enough or not (CFI, n.d.).

Technology

Part D.
i.Some of the main differences between the various ABC methods related to strategic cost management are that activity based costing can be used for product costs, management, or activities at the same time. The product costing system may be limited to analysing manufacturing expenses, or it may include non manufacturing costs and direct labour costs related to the product.
ii.The following three main approaches to ABC product costing:
A simple way. A simple activity based product costing system that can distribute manufacturing overhead to products. It has 2 steps. The first step is measuring the cost of manufacturing overheads activities in order to identify the major indirect costs of manufacturing activities and determine the total budget cost of each activity. Step 2 is allocating the manufacturing overhead activity cost to the product, select the appropriate activity driver for each activity, and estimate the cost of each activity driver. According to the number of activities consumed motivation for product distribution manufacturing costs.

ABC system for indirect costs: the manufacturing and non manufacturing overhead cost allocated to cost of goods.

An integrated activity based system that allocates all product related cost products and their use in activity management except direct material.

iii.When determining whether a company needs to implement activity based costing in cost management, I will consider the following factors:
Activity based cost accounting is a complex system that requires a lot of records and tedious calculations.
For small businesses, traditional cost accounting systems may be more advantageous than operating costs because of the ease of operation of the former.
Sometimes it is difficult to attribute costs to a single activity because some costs support multiple activities.
A limited number of highly trained professionals is required.
If the full support of the top management, the system will succeed.
Implementing the system requires a lot of money investment.

The most appropriate approach to adopt as below:
Identify and evaluate the needs of activity based costing based costing method to determine the feasibility of the activities of the organisation.
Training requirements- basic training seminars and senior management of all employees.
Determine the range of the project- tasks and goals assessment project.
Determine activities and drivers- to determine what drive activity.
Operating costs and create a flow chart- how resource and activities involve products and services.
Data collection- collection of data, where in the graph shows the relationship between the operation.
Established software model, validation coordination.
Interpret the results and prepare management reports.
Integrated data collection and reporting.
Part E: Supplier Performance
To begin with the process of analysing, managing and measure the performance of supplier from where the business receives its goods or services is known as supplier performance management. Most of the business wants to reduce the cost of the supplier as well as looking to provide the quality goods to customer (EPIQ, n.d.).
The process of management of raw materials, process them and convert them into the final process is known as supply chain management. This involves the maximise of the customer value and achieve the completive value in market (Hayes & Drury, 2020). Here is the example to make the clear understanding of supply chain management. Let’s take Mac Donalds from where we get the Burger and other stuffs. They want some patties to make the Burger (i.e. Beef, Chicken, Veges etc) they get those things from the farmer who is their supplier. Once they receive the items from farmer, they take that into their factory and make the patties which is used to make the Burger. Once the patties are done, they distribute their patties in all their retail store around the country and finally after that the customer have the Burger according to his/her choice this is the whole process of supply chain management. The effective supply chain always makes a healthy relationship with the supplier and customers both which is good for the business. They make the healthy relationship with both the customers and suppliers by monitoring success which their organisation is achieving, controlling the prices. This helps to increase the efficiency, cost management and productivity, along with the better products consistency and delivery performance.
Organisation should equally focus on the loyalty of supplier as well. Most of the business fails because they focus more on customers rather than the supplier. To achieve the milestone of the company both the supplier and customer are equally important. The supply chain begins from the supplier because they supply the raw materials to the business, and it end up with distributing the final products to the customer. So, from the supply chain management we can say that supplier is very important for the success of business. It reflects an initiative on the part of suppliers to build and execute supply chains that are as effective and competitive as possible. Supplier’s strategy must be part of the company’s business plan, because virtually every organisation, whether it is product oriented or service oriented, relies on its suppliers. In some cases, the cooperative partnerships with vendors can helps to minimise stock related expenses that are especially necessary if the cost control is the strategic focus of the business. For example, Spotify and Uber has done the partnership. The customer who take the ride can listen the song in Uber by using the Spotify so that most the customers know about them which helps to grow their business. It is not only beneficial for Spotify but also the people love to travel via Uber because they can take the advantage of Spotify, so it is beneficial for both the company.

Organizational Size and Complexity

It is very difficult to find the organisation to get the better supplier because business wants the better supplier who can supply quality products in cheap price. While company is purchasing the products from the supplier it is very important to notice whether there is additional cost or not. For example, if the Mac Donalds buy the patties and they are not in a proper size they have to work out on it to make it better and good looking size for doing that it will cost some extra money to the organisation. To get rid of that problem MC Donalds must look out the other supplier so that they don’t need to spend extra money on it. The management always try to find out the best supplier who can supply the products in better price. Management must have to look for the option like most of the company selling the goods in affordable price if they buy in bulk amount which is advantageous for the organisation. Management accountants must have to do some negotiation while buying the products. 
The process of measuring the performance of supplier on the basis of delivery (on time), quality (good quality products), cost (affordable price) is known as supplier delivery performance (KPI Library, n.d.). The supply chain manager always has the important task to evaluate the performance of their supplier by giving some feedback and ask them to improve the performance in coming future.
According to David Inbar, the supplier performance is measured based on two analysis. They are qualitative analysis and quantitative analysis (This is divided into four parts. They are Responsiveness, Delivery, quality and cost reduction) (Inbar, 2020).
Qualitative analysis:
The analysis which is done to all the employees and divisions who are indirectly and directly affected by the performance of the supplier is qualitative analysis. They all are called by the managers and collect their opinion about the supplier. After that there will be some survey to be conducted for the certain time frame as well as group meeting to collect the feedback from the different employees regarding each supplier. In this way the qualitative analysis is done (Inbar, 2020).
Quantitative analysis:
In this analysis the performance of suppliers is measured upon the various criteria:
Responsiveness:
It means how long the supplier takes time to response about the goods and services which the company wants. For example, if MC Donalds makes some order to their supplier regarding the patties. The supplier most has to response them as quickly as possible so that they will be aware when they going to get their product. If the supplier doesn’t have those item, then also they must have to inform them so that MC Donalds can find some other supplier. If they response on time they are good whereas if they took long time to, they are considered bad in term of response (Inbar, 2020). 
Delivery:
On time delivery is very important criteria to measure the performance of customer. If supplier promise to deliver on certain day but they can’t do that it will create the negative impact. For example, if MC Donalds expecting to get the delivery and they can’t get the delivery as a result they could not serve the customer. So, on time delivery is very important to measure the performance of supplier (Inbar, 2020). So, if they are saying that they will deliver today they must have to deliver their goods on same day. Delivery should have to be on regular basis. This can be measured by measuring the ration of deliveries which is shipped on time.
Quality:
The other criteria to measure the supplier performance is by the goods they provided. The quality of goods can be measured in the various ways. The management can be aware about the quality goods by seeing the amount of rejection they have done to the supplier. That is because the goods failed the quality check of the company. However, it is not possible to check the quality of goods all the time in each order they receive. To get rid of this problem the company can make some deal with the supplier. For example, if the supplier suppliers the faulty products they can ask for some penalty who supply that.
Cost:
Another way to measure the supplier performance is by the cost. If the supplier often changes the price of the goods it will be problem for the business. So, in this way the supplier performance is measured (Inbar, 2020).

Strategy

Part F: Customer performance
The time between when the customer places the order until the time when the customer receives the order is known as customer response time  (My Accounting Course, n.d.). For example, if the customer makes a phone call to the cheese shop and order the cake. While ordering the cake customer may demand the size, some writings on it, decoration on the cake, additional fruits on it etc when that order is made into the phone the person who is taking that order write all the notes which customer has mentioned. Once that is done the person who took that order will pass that note to the person who does the baking. Once the baking is done then the delivery person will take that item to the customer address. So, it makes clear to understand about the customer response time by the example. The time between the customer made a cake order and receive the order is the customer response time (Guler, 2020). This is also considered as one of the important areas where management accounting must have to focus because many of the customers must wait for the long time which makes the customer very disappointed. Customer response time must have to be as quickly as possible.
The components of customer response time are as follows:
Order received:
This is the time between when order is received and start doing the manufacture. When the order is placed the business will know what the customer wants. If that is in phone the receiver of the phone call will take all the order if that is by online the system will take the order, if the customer visits the shop then the cashier will take the order. For example, if customer did online in MC Donalds and order one Chicken Burger. Once that order is confirmed, there is one desktop in Mac Donalds kitchen after that the kitchen staff will know about the order. Because of the online system it saves the time and helps to respond the customer as quickly as possible. Moreover, while doing some drive thru order in Mac Donalds there is someone talking in the phone and asking for the order at the same, they just touch in their tablet what the customers need. Once the order is confirmed by the customer, they just click the button and it goes to the desktop which is in the kitchen so that kitchen staff starts doing preparation to make food. This is the quick response to the customer.

Organisational Culture and Management Style

Order set up:
Once the order is received from the customer the cashier/receptionist will forward that order to the person who deals with the order. If that is from the online platform the system will notify about the order to the concerned authority. For example, once the order is shown in the desktop and there is the order for the chicken pizza. So, the person who deals with that order must go the chiller and get the chicken patties as well as there may be some extra thing which the customer might have demand so that set up must be done.

Production time:
The time which is taken by the production department to finish the received order is called production time. For example, once the order is set up at Mac Donalds the person who ic dealing with the Chicken Burger order must have to put that patties into the oil and make it ready to eat which is the production time.

Delivery time:
The time which is taken to deliver the order of customer is known as delivery time. For example, once the chicken Burger is ready the person will receive the order. To receive that order the customer has wait for some time which is the delivery time.

Management must have to work to minimise the customer response time as short as possible. Waiting for a long time makes the customer unhappy and dissatisfied. The company become a success because of minimising customer response time. The leading fast-food outlet in most of the world Mac Donalds seems very nice in responding to the customer quickly. They have online order system so that people can order online and at the same time their order goes into the desktop in kitchen and the kitchen staff prepare that food so there is no need of the person to take that order. While taking orders if anything went wrong in that case the person who took that order will be responsible for that. But in the case of online order if anything wrong done by the customer while talking that order customer will be responsible for that which means company don’t have any wastage. Not only that Mac Donalds has made way driveway in most of their outlets to reduce the traffic and to respond to them as quickly as possible. The thing which Mac Donalds is doing is a very good example of customer response time. As a result, the value of this company is growing every day and customers are very happy with the food to have on time. Not only that while we go and make any order from the drive-through someone is talking our order in the phone and we just give the order what we want to them. While talking in the phone they don’t make any note of food which we want instead of that they have done some investment in the system so that once a customer makes the order they just click on that what customers want and the order goes to the kitchen desktop in this way they are saving the time to take the order by using the system. As a result, hungry customer loves to visit them because of their good customer response time.
In my point of view, I think it is still applicable for the service company as well. Service company means the company which provides the service to the customer. It will help to minimise the cost in the service company as well.
For instance, bank is the place from where we don’t get product, but we get service from there. If the bank has a good customer response time, they can serve many customer like if there is very long queue in the cashier in that case if they manage extra person to look the cashier they can response quickly to the customer as a result they can attract more customers.
Another example we can say about the hair salon. If the barber manages to cut the hair or beard on time it will help to manage the cost. If Barber took 1 hour to cut the hair which normally takes 30 minutes in that case, he/she will lose the money.
Online shopping is another way to managing the cost. For example, there is no waiting time and waiting time in the online shopping whereas there is order receipt time. So that company can save some money as well as it is easy to handle the high-volume order easily. It impacts on the increase of number of customers.
Part G: Activity Based Management

Strategic Management Accounting

The system which is to determine the profitability of the organisation from the every aspect of a business which helps to focus more on strength and workout more on weakness to minimise it or eliminate it and to do better performance in coming days is known as activity based management (Twin & Drury, 2020).
Activity based management was first developed in the year 1980 to see where the company is losing the money and highlight those areas so that some efforts can be made to eliminate or minimise those issue and increase the profitability of the company.
Measuring performance in activity-based management involves more on managing the costs because the company needs to stay on budget and try to control all the things within that budget. The company must have to identify for unnecessary expenses and minimise those expenses. For example, the leading telecommunication company Vodafone has it’s call centre in Philippines. If someone from New Zealand has any problem with Vodafone and when customer call Vodafone that call receives from their call centre which is in Vodafone. This is because the labour cost in Philippines is very much cheaper than that of New Zealand. The minimum wage of New Zealand is NZD 18.90 whereas of Philippines is 537 (Trading Economics, 2020) which is NZD 16.71 per day (according to the exchange date of 19/08/2020 at 7.45 PM). So, it is very cheap. In this way company can save the money. It does not add any value to the customer whether the call received from Philippines or from New Zealand because customer just wants the solution of the problem.
Company must have to make the budget and keep on trying to be in that budget and always try to minimise the cost without decreasing in the amount of quality. This can be done by providing training to the employee or motivating the employee with some reward who does excellent performance. By using smart machine, supervision is also the other way to motivating the staff.
If company spend more than the budgeted amount the company need to take loan which put business on risk as well as there is interest for those loans which results in the decrease of the profitability of the company. So, company must have to control otherwise company have to go into liquidation. 
Company must have to identify the unnecessary expenses or non-value-added cost and minimise those cost. For instance, if there is small restaurant where there is very less customer flow. One chef can easily cover everything, but the boss thinks that there may be busy sometime so in that case he needs two chefs. But the restaurant never gets busy but also still two chefs working as a result boss is paying extra money which decreases the profitability of the restaurant so according to the activity-based management the boss must have to be aware and put only one chef in the restaurant helps him to increase the profitability of the business. Either two chefs or one chef it is not adding any value to the customer.
Another example is most of the restaurants or colleges uses the heater although it is not too cold as a result, they are spending unnecessary money. Instead of using all the time they can just use that heater when the temperature is low.

In conclusion, activity-based management is very important to improve the profitability of the organisation. For example, in the very first process all the activities should have to be identified what the organisation is facing. The activities must have to be identified in the greater level of detail so that it will help management to through it properly. For example, in the case of steel company there might be some problem with machine, inspection, material, setup, handling, engineering and facility sustaining. All those problems should have to be broken into the further process. So that the company can work more effectively and efficiently. Once the problem is identified then use activity-based management to reduce the costs. To do that first point out the major opportunities for cost reduction. Secondly find out the reason for those costs. Thirdly company can design program which can helps to eliminate the causes of costs and lastly present some tools which can measure the performance to monitor the effectiveness of cost reduction efforts.

Part H: Quality Cost
Quality costs are those types of costs which is related to the avoiding, noticing and remediating product matters linked to quality. In a simple word, quality cost means all the cost which is incurred while making a product. For example, Smith café makes the cake. To make that cake they use flour, cream, sugar, fruits, nuts as raw material whereas there is someone who make the cake as well as oven is used for all those stuffs there is some cost incurred on it (Accountingtools, 2020).
Quality costs are divided into four parts. They are mentioned below:
I.Internal failure cost
II.External failure cost
III.Appraisal cost
IV.Prevention cost