Managerial Accounting

Retailers like Dairy Farm International Holdings Limited (Dairy Farm) which operates supermarkets, hypermarkets and convenience stores under brands such as Cold Storage, 7-Eleven and Giant are facing immense pressure due to expansion of e-commerce. In the 2018 annual report of Dairy Farm, Mr. Ben Keswick, the Chairman, reported a continual deterioration of the supermarket and hypermarket business due to increasing market competition brought about by on-line shopping platform. According to him, this has provided the customers with more choice, competitive prices, and greater location convenience. To make matters worse, escalating costs in rental and wages has put further pressure on the Groups already thin profit margin. These changes have impacted the business significantly and at an increasing rate. To meet these challenges, he emphasised that transformation must be made to realign the businesses to meet the changing customer preferences. Source: Dairy Farm International Holdings Limited, Annual Report 2018

Required:

(a) Define management accounting and identify its key components. (25 marks)

(b) Explain the ways in which these key components of management accounting can help Dairy Farm meet the challenges highlighted above. (30 marks)

(c) In their respective websites, Giant states that its mission is to bring quality products in volume at the lowest prices to our consumers while Cold Storage aim to always inspire our consumers with the freshest quality range from around the world. Describe the types of management accounting information that might assist management of Giant and Cold Storage? (15 marks)