Thomas Sheridan, writing in Management Accounting in February 1989, pointed out that Japanese companies have a different

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Thomas Sheridan, writing in Management Accounting in February 1989, pointed out that Japanese companies have a different approach to cost information with 'the emphasis - based on physical measures', and 'the use of non-financial indices, particularly at shop floor level'. He argues that their approach is much more relevant to modern conditions than traditional cost and management accounting practices. You are required

(a) to explain what is meant by 'physical measures' and 'non-financial indices'; (3 marks)

(b) to give three examples of non-financial indices that might be prepared, with a brief note of what information each index would provide. (5 marks)

(c) What existing cost and management account- ing practices do you consider inappropriate in modern conditions? (9 marks) (Total 17 marks)

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