Five-Star company manufactures a line of electric fans. It has experienced sales growth over the last 7 years. The company has implemented several automated systems in its assembly plan and employs a sales, technical specialist, cost, production and engineering managers. However, during early 2020 Five-Star experienced a major dislocation of its operation due to Covid-19 pandemics across the globe. Throughout the Covid-19 lockdown period the company suffered major issues such as production disruption, decline in sales and profit margins.

Required:

1. As a Management Accountant what would be your advice for managing its operation during the Covid-19 period. Please specify some of the measures needed as a ‘survival strategy’ during the lockdown period along with cost implications.
2. Has the lock down during the Covid-19 period affected the company’s need for management accounting information?
3. You are also asked to advice company management on a ‘recovery strategy’ after the pandemic is over.

Answer rating: 100% (QA)

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