ACC501 Accounting for Decision Making Module 2 SLP

Module 2 – SLP

COST–VOLUME–PROFIT ANALYSIS

Second part of the presentation. See background information for the Module 1 SLP.

Required:

Include the following items in your presentation:

What about special pricing for some markets or customers?

Determination of customer profitability.

Show effect on revenues and profitability based on stated assumptions.

Page 1
Module 1 – SLP Accounting
Cost Systems and Cost
Behavior
Name: Roger Waldo
Institutional Affiliation: Trident
University International
Date: 3 Jul 24
Page 2
The idea presentation
 The pet industry has recorded a rising growth (Shan, 2023).
 Many people keep pets for different reasons:
 Leisure.
 Hobbies.
 Most owners are pre-occupied with their professional life.
 This trend increases risks of health complications among pets.
 The project proposes a new pet wellness monitoring kit by ABC Pet Stores.
Page 3
Product description
 This product is focused on:
 Continuous pet monitoring.
 It comprises:
 A wearable device.
 Health sensors.
 GPS tracker.
 Communication mechanisms.
 The device is placed around the collar of the target pet.
 It assesses and communicates health status, including vitals, to the owners
(Chiou et al., 2021).
Page 4
Cost estimates
 The success of the product will be
based on the ability to increase
returns.
 The establishment and
development costs comprise:
 Research and development.
 Production.
 Marketing.
 Branding and shipping.
 It is estimated that the product will
be sold at $200 for the premium
and $80 for the base item (Whistle,
2024).
Item Costs
Preliminary research and
development
60000
Production processes 25/item
Branding and delivery 5/item
Marketing and promotion 15000
Others 8000
Total $83030
Selling price
Base item $80
Premium item $200
Page 5
Selling price determination
 Using the most appropriate pricing strategy guarantees success.
 This product will be sold at a premium approach (Ali & Anwar, 2021).
 The rationale for the use of this model is that:
 It creates an avenue for differentiating the commodity from the
competitors.
 It covers the initial production expenses.
 Creates a competitive advantage.
Page 6
Rationale for the pricing approach
 Pricing strategies define the approaches to earn profits.
 This product will be sold at a premium price (Ali & Anwar, 2021).
 The rationale for this consideration is that:
 It will provide an avenue for creating a competitive advantage.
 The firm will earn higher returns than competitors.
 It is possible to attract a niche segment through this model.
Page 7
Expected growth
 The firm expects to
achieve a 5% growth
rate monthly.
 This trend aligns with
the current patterns
within the pet
industry.
 It is expected that
the firm will boost its
annual sales.
 The company
projects positive
returns concerning
the total profits
earned (Grand View
Research, 2024).
 The summary of the
monthly sales and
profits are shown in
the table below.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Units sold 100 105 110 116 122 128 134 141 148 155 163 171
Price Base product $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00
Price Premium product $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00
Revenue Base $ 8,000.00 $ 8,400.00 $ 8,820.00 $ 9,261.00 $ 9,724.05 $10,210.25 $10,720.77 $11,256.80 $11,819.64 $12,410.63 $13,031.16 $13,682.71
Revenue Premium $20,000.00 $21,000.00 $22,050.00 $23,152.50 $24,310.13 $25,525.63 $26,801.91 $28,142.01 $29,549.11 $31,026.56 $32,577.89 $34,206.79
Total Revenue $28,000.00 $29,400.00 $30,870.00 $32,413.50 $34,034.18 $35,735.88 $37,522.68 $39,398.81 $41,368.75 $43,437.19 $45,609.05 $47,889.50
Projected Sales for the Product
Page 8
References
 Ali, B. J., & Anwar, G. (2021). Marketing Strategy: Pricing strategies and its influence on
consumer purchasing decision. Ali, BJ, & Anwar, G.(2021). Marketing Strategy: Pricing
strategies and its influence on consumer purchasing decision. International journal of Rural
Development, Environment and Health Research, 5(2), 26-39.
 Chiou, S. Y., Lin, K. J., & Dong, Y. X. (2021). A real-time, automatic, and dynamic scheduling
and control system for PET patients based on wearable sensors. Sensors, 21(4), 1104.
 Grand View Research. (2024). Pet Care Market Size, Share & Trends Analysis Report By Pet
Type (Dog, Cat, Fish, Bird), By Type (Product, Food), By Region, And Segment Forecasts,
2022 – 2030. Grand View Research. https://www.grandviewresearch.com/industry￾analysis/pet-care-market
 Shan, X. (2023). Research on the legal Protection of Pet Animals. Academic Journal of
Management and Social Sciences, 2(2), 20-25.
 Whistle. (2024). Whistle™ Go Explore 2.0 Smart Tracker. Whistle.
Whistle Go Explore 2.0 Smart Tracker