Skip to content

ACCA Strategic Professional · Advanced Performance Management · Strategic management accounting

Kestrel Aerospace is deciding whether to enter a new market. The management accountant proposes analysing the competitors' cost structures, estimating their likely response to price cuts, and comparing Kestrel's relative market share over the product life cycle. Which strategic management accounting technique is the proposal MOST closely describing?

The proposal describes competitor accounting and positioning analysis. It examines rivals' cost structures, their probable responses to price changes and relative market share. These external, strategy-focused inputs distinguish strategic management accounting from internal tools like zero-based budgeting, standard costing or absorption costing.

  1. ACompetitor accounting and positioning analysisCorrect
  2. BZero-based budgeting of departmental overheads
  3. CStandard costing of direct materials usage
  4. DAbsorption costing of finished goods inventory

Explanation

Competitor accounting involves assessing rivals' costs, prices, market share and likely reactions, which is what is proposed. Zero-based budgeting, standard costing and absorption costing are internal cost and control tools and do not analyse competitors' behaviour.

Did you get it right without looking?

One question tells you little. A timed set on Strategic management accounting shows your real accuracy, how long you take and where you lose marks.

Practise Strategic management accountingFree diagnostic mock

More Strategic management accounting questions