IJ. new New techniques are often described as contributing to cost reduction, but when cost reduction is necessary it is not obvious that such new approaches are used in preference to more estab- lished approaches. Three examples are: established technique compared approach with (a) benchmarking interfirm comparison (b) activity based budgeting zero base budgeting (c) target costing continuous cost improvement You are required, for two of the three newer techniques mentioned above: to explain its objectives to explain its workings . to differentiate it from the related approach identified to explain how it would contribute to a cost reduction programme. (20 marks) 15.3 Kaplan ("Relevance Regained', Management Accounting, September 1988) states the view that the time-honoured traditions of cost accounting' are irrelevant, misleading and wrong. Variance analysis, product costing and operational control are cited as examples of areas where information provided by management accountants along tradi- tional lines could well fail to meet today's needs of management in industry. You are required to (a) state what you consider to be the main requirements for effective operational control and product costing in modern industry; (10 marks) (b) identify which traditional cost accounting' methods in the areas quoted in (a) may be considered to be failing to supply the appro- priate information to management, and explain why; (9 marks) (c) recommend changes to the traditional cost accounting methods and information which would serve to meet the problems identified in (b). (6 marks) (Total 25 marks)