HOW WOULD DO I GO ABOUT PROVIDING THIS INFORMATION NEEDED FOR MY ECONOMIC & MANAGMENT ACCOUNTING...

Question:

HOW WOULD DO I GO ABOUT PROVIDING THIS INFORMATION NEEDED FOR MY ECONOMIC & MANAGMENT ACCOUNTING PLAN? THIS HAS BEEN REQUESTED BY INSTRUCTOR-Your specific task is to produce a report discussing the following key aspects of this expansion project:

- A microeconomic analysis of the current state of the soft drink market in the U.S. and how any recent developing trends may affect the demand for this product.

- A macroeconomic analysis of the state of the U.S. economy and the impact this may have on the demand for this new product.

- A list of key management accounting practices that the company must put in place to support their planned expansion.

Management accounting plan:

Management accounting plan is a tool that provides information used in the process of decision making. It helps in creating a road map used for business processes such as planning, directing, and controlling.

Answer and Explanation:

Due to the awareness of proper diet and a healthy lifestyle, the market of carbonated drinks in the United States has substantially decreased. The US government has increased the taxes imposed in the carbonated beverages significantly, making it hard for the company to reach its full potential. There are recent trends which have affected the carbonated soft drink immensely. For instance, the introduction of diet Pepsi has blown a significant blow on Coca-Cola as most consumers prefer them.

With the start of the year, there was stability in the growth of the GDP. For instance, in January, consumer confidence was significantly high, and both sales growth and the labor market were becoming stable. However, with the outbreak of the COVID-19, there has been a significant decrease in the supply of goods and reduced growth in key businesses. With the provision of the diet Pepsi and Coca-Cola with no sugar, the government might decrease its taxes to initiate a hefty purchase of the commodity. The substantial purchase would translate to more profits hence increasing the government earnings.

For Coca-Cola to support the expansion, it must use various management accounting principles. For instance, they should establish an internal audit, perform a risk assessment, and price discount decisions to capture more markets around the globe.


Learn more about this topic:

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Role of Financial Accounting in Management & Decision Making

from Accounting 201: Intermediate Accounting I

Chapter 12 / Lesson 1
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