Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 1 - The Manager and Management Accounting - Assignment Material - Problems - Page 25: 1-29(2)

Answer

a. The restaurant will have cost benefit over its competitors as it will reduce its cost by not hiring experienced chefs and will be able to fulfill its workforce by hiring untrained staff but this may affect the efficiency of the business. b. The office supply will have competitive advantage as it would provide better services for the similar product to its customers by adding a delivery system but it may lead to increase in the cost for the business. c. The airline will be able to cut its cost by reducing the number of employees but may have to expend on software development and technology required to replace desk clerks. d. The florist is trying to provide its customers and potential customers with better services as he wants to hire a horticulture specialist which can provide him advantage in market for the similar product .

Work Step by Step

a. * Cost which might be incurred for training new cooks. * Productivity and efficiency benefit in comparison to competitors. b. * Cost which might be incurred due to delivery services. * Premium price that customer would be willing to pay for the service. c. * Cost which might be incurred for the development of new software for check in services. * Sensitivity of target customers to change in services. d. * Cost which might be incurred to hire horticulture specialist. * Premium price that customers would be willing to pay for expert advice.
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