Managerial accounting coursework: petvets ltd

Résumé du document

In the year 2000, a group of veterinary practitioners got together and formed a company called ?Petvets Ltd.' This Company is composed of fifteen separate practices in various locations and is mainly concentrated on the treatment of household pets. Further, this company has also established a central hospital and a small research department. Each practice is operational using the ?one-stop' approach. The meaning of this ?one-stop' approach is that each practice will sell all pet products (food and medicines) and in most scenarios at the same price (avoiding any kind of ambiguity in prices). It is to be noted that product costs are vital and Petvets Ltd is no different from other service companies in ensuring to maintain authenticity with its accounting practices and win the goodwill of its customers. To elaborate on product costs and its advantages, we have laid down some of the main advantages of product costs. Firstly, allocating the manufacturing costs incurred during a period between cost of goods sold and inventories fulfills the financial accounting requirements. Secondly, product costs are important to provide useful information for managerial decision making requirements. A significant point is that decision making product costs are required to help distinguish between profitable and unprofitable products.

Extraits

[...] Finally, target costing approach can be also used by the company. Target costing is driven by external market factors. A target market price is determined by marketing management prior to designing and introducing a new- product (clearly, the invest use to launch the product). This target price is set at a level that will permit the company to achieve a desired market share and sales volume. A desired profit margin is then deducted to determine the target maximum allowable product cost. [...]

[...] For me, a Traditional total cost + mark-up could be more appropriate for this kind of shop. This model means that your product costing is function of your total cost: in fact, you calculate all costs for each product like the product purchase, the employees, the rent, the research cost (return on investment) And, when you know exactly your cost for each product, you just have to add a mark-up (so it can be used on short term when we have our total cost). [...]

[...] Bibliography Managerial Accounting par Joseph G. Louderback et Jay Holmen (Relié - 1 mai 2002) Managerial Accounting: Updated par Ray H. [...]

[...] At the optimum, a firm needs to sale products classified in each phases of the product life cycle (for example, one product in introduction phase, one in growth phase In this situation, the company and for example Petvets have always a renewed of products and can be competitive on different markets steadily. Product D would be disappear Volume Product E would be launched E Introduction growth maturity decline rejuvenation Now, different accounting approaches can be used to determine the product costing/pricing strategy. First, the Economist's model is based on price and demand relationship. It supposes that we know and we can quantify price/demand relationships. At best, an approximation can be ventured. [...]

[...] Managerial accounting coursework: petvets ltd Petvets Ltd was formed by a group of veterinary practitioners in the year 2000. This company is composed by fifteen separate practices in different locations, concentrate on the treatment of household pets. She has also established a central hospital and a small research department. Each practice using the approach, it means that each practice sales all pets products (food and medicines) and, normally, at the same price (we consider it). Product costs are required for two purposes : first, for financial accounting requirements in order to allocate the manufacturing costs incurred during a period between cost of goods sold and inventories; secondly, to provide useful information for managerial decision-making requirements. [...]