Question

An organisation's value chain provides a framework for considering a range of management accounting issues such as L. Reinforcing initiatives such as activity based costing IL Breaking down traditional representations of organisational activity. Reflecting value chain relationships in terms of cost 1. Encourages a broader organisational view Oat, and IV Ob.land Olandi d. I and I Moving to another question will save this response.

Answer 1

Answer- a. I, II, III and IV

Explanation- True. An organization’s value chain provides a framework for considering a range of management accounting issues such as –

I. Reinforcing initiatives such as activity based costing- Value chain framework provides the basis for activity-based-costing. Service and product costing is the basis of activity-based-costing. Value chain framework considers these additional activities such as strategic cost management which helps in reducing product/service cost and improves the positioning in the market.

II. Breaking down traditional representations of organizational activity- A value chain framework encourages communication across different departments which means that they do not adhere to just the traditional functional departments.

III. Reflecting value chain relationship in terms of cost- The end result of the value-chain activities is the cost or profit per unit. Thus, the whole value chain relationship is measured in terms of cost units.

IV. Encourages a broader organizational view- Management accounting team change the perception to have a broader perception when using value chain framework because they make critical decisions that adds to the efficiency of the value chain activities.

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