Management Accounting & Finance of Nokia and Carphone Warehouse Essay

Management Accounting & Finance of Nokia and Carphone Warehouse - Essay Example In the case of Nokia the expenses incurred in operating the machinery, depreciation of equipment and other assets such as building associated with the production of the company’s products and other overhead costs such as light water and telephone are classified as factory overheads and are therefore included in production costs as part of the companies manufacturing costs. Nokia can determine how much it actually costs to produce a certain level of activity, the types of expenditure involved and their cost in relation to the volume of production. In the case of Carphone Warehouse, the company provides a service which includes selling cell phones and other electronic items and repairing cell phones. The company does not manufacture anything and so the cost of the phones that it sells is the only cost of sales in the company’s income statement. The cost of repairing phones along with the costs of the service it provides are all included as operational expenses. Regular re view of and updating of budgets is essential to the success of these companies. The company should focus on budgets and the competition and seek to add value to its products. Nokia is in an industry where technology is changing rapidly and so it needs to be always focused on external information so that it can make internal changes in the way it does things. This, however, requires the implementation of strategies such as the Balanced Scorecard, which will allow the organization to create value for its many stakeholders including customers.