The management in Unilever plant in Ontario is preparing for a change. The company plans to improve energy efficiency to help manage rising and unpredictable energy prices. The plant produces margarine and other vegetable oil products. The cost of energy represents 15% of all production costs. The company expects that the cost will increase further in the coming years, as the energy price are expected to increase further. To meet an aggressive goal of reducing energy consumption by at least 6% per year, the plant’s energy team has implemented, and carefully documented, 120 projects since 1999, saving more than OMR 4.2 million in costs (based on 2012 prices), and avoiding about 23,000 tons of greenhouse gases. One of the solutions was to invest in new technology – a Reverse Osmosis (RO) system that would enable significant, measurable improvements in the efficiency of the steam plant operations. In the first year of operation, Unilever calculated that the project would lead to net savings of RO 378,166 (based on 2012 prices), even after accounting for the full cost of operating and maintaining the RO system. It is expected that the technology will pay for itself in less than 16 months. Based on the above case, answer the following questions. Question: - Briefly explain the role of management accountant in the above case. (The answer should explain the functions of management accountant). Do financial accountant and cost accountant have a role to support management in the above case? Explain.
The management in Unilever plant in Ontario is preparing for a change. The company plans to improve energy efficiency to help manage rising and unpredictable energy prices. The plant produces margarine and other vegetable oil products. The cost of energy represents 15% of all production costs. The company expects that the cost will increase further in the coming years, as the energy price are expected to increase further. To meet an aggressive goal of reducing energy consumption by at least 6% per year, the plant’s energy team has implemented, and carefully documented, 120 projects since 1999, saving more than OMR 4.2 million in costs (based on 2012 prices), and avoiding about 23,000 tons of greenhouse gases.
One of the solutions was to invest in new technology – a Reverse Osmosis (RO) system that would enable significant, measurable improvements in the efficiency of the steam plant operations. In the first year of operation, Unilever calculated that the project would lead to net savings of RO 378,166 (based on 2012 prices), even after accounting for the full cost of operating and maintaining the RO system. It is expected that the technology will pay for itself in less than 16 months.
Based on the above case, answer the following questions.
Question: -
- Briefly explain the role of management accountant in the above case. (The answer should explain the functions of management accountant).
- Do financial accountant and cost accountant have a role to support management in the above case? Explain.
Question: -
- What type of information is required for the junior level, middle level and top-level management in the above case, for decision making?
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