As the Management Accountant for a large group of companies, you are asked to review and report on the operations of the company with a view to improving its profitability. The review was to be focused on the following areas:

1) Budgeting and standard Costing principles

2) Production processes and costs.

3) Profitability

4) Cash Managemen

t. A ) As a prelude to the review, you were asked to explain the following

1) The theory of constraints. 5 Marks

2) The non-financial issues that management should consider before making a decision. 5 Marks