QUESTION Malvern Sports Ltd (MSL) makes hand-built, high-quality sports cars. They are built around the exact dimensions of the purchaser. MSL cars have an excellent reputation for quality, speed, style, and comfort, and command a high purchase price. At the monthly Board meeting, two essential agenda items are being discussed: New IT System The Board of MSL is discussing their plans to invest in a new Enterprise Resource Planning System an organization-wide system with a typical data warehouse. It will replace most of the current IT systems in the business. It is a significant undertaking that the Board hopes will revolutionize business processes and performance. The IT Director leads the project steering committee. The Head of Finance offers to transfer a qualified accountant as a full-time member of the project team. The IT Director responds: Thats kind, thank you. However, I do not think a full-time member will be necessary. It wont take that long to record what we are spending. The Head of Finance comments: The role would be one of a management accountant, not merely recording financial transactions. The two agree to discuss this matter further separately. Sourcing Key Components: The Procurement Manager presents an idea to change where specific key engine components are sourced. We outsource several key components for specialist manufacture at a very high cost. I propose we source these components from the mass market from car industry volume suppliers. They benefit from economies of scale as all the large manufacturers purchase their parts, so their prices are a fraction of the cost of the current suppliers. Lower cost equals more profit, so its an obvious plan. The Production Director questioned the reliability and performance of the mass-market components. The Chairman noted If we have any problems in that regard, we have a whole department of creative accountants. I am sure we can present any statistics in the best light possible to help preserve our share price. REQUIREMENT: (a) Concerning the IT Project: (i) Explain the difference between management accounting and financial accounting with examples - 6 marks (ii) Discuss TWO possible ways a management accountant can add value to the project team, beyond recording financial transactions - 10 marks (iii) Explain the Quality, Cost and Time triangle in project management. Illustrate how each constraint affects the other two in the context of the discussed IT project - 16 marks (b) With the Procurement Managers suggestion: (i) Identify the generic competitive strategy of the company compared to the Procurement Directors suggestion. Recommend, with justification, whether you think the idea to mass-market source components to reduce cost should be adopted - 14 marks (ii) Discuss the ethical implications of the Chairmans suggestion. Recommend with justification how the Head of Finance should respond 14 marks TOTAL: 60 MARKS