Question

discuss the concept of cost transformation and how management accountants can contribute towards the cost transformation of an organisation.

Answer 1

The CGMA cost transformation model is designed to help businesses to achieve and maintain cost-competitiveness. It serves as a practical and logical planning and control framework for transforming and managing a business’s cost-competitiveness.

Cost management is central to the finance and accounting functions
and a key component of a management accountant’s role. In order to
survive, businesses must become globally cost-competitive and carefully
scrutinise their business models.

Management accounting can contribute following:-

1- cost-conscious culture
2 - Understanding cost drivers: Cost accounting systems and processes
3- Managing the risks inherent in driving
4 - cost-competitiveness
5 - Connecting products with profi tability
6 - Generating maximum value through new products