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Management accounting presentation handout

Gary Yang cc1301635

Management accounting presentation handout

Gary Yang cc1301635

The Cool Ltd is a surf and beach wear company. In addition, they also want to into the ski market. This company's target market is 18 to 30 years old people. For this group of people, called generation Y, they “are maybe the tech-savviest generation.” (Lamb, Hair and McDaniel 2013). On the topic 8, the company needs to provide a special offer for the potential retailer. In addition, they also need to face the product price issue. The issue is about the legal restricting on the special price for the potential retailer.

For the first issue, they need to face how to reduce the price. It has two ways to reduce the price, one is to reduce the cost, and another one has reduced the wing. For the first method, they need to focus on how to reduce the cost. For example, they can reduce the staff salary to decline the office cost, which reduces the direct-labor costs. Direct-labor cost means “the cost of salaries, wages, and fringe benefits for personal who work directly on the manufactured products.” (Hilton and Platt 2014) Future more they also can rent money form less interest bank, so they can pay less money for the bank. Through this financial way, the company can reduce the debit pressure, thus decline the cost. Furthermore, for the non-accounting area, the Cool Company also can develop the relations with the supplier.

For the second issue, the legal restriction which has two examples to explain it. First instance is the “RPM”. The RPM called resale price maintenance. The minimum resale price maintenance “is a vertical price restriction imposed by an upstream manufacturer on downstream distributors, dealers, or retailers.” (Gift 2009) The minimum RPM can increase the vicious competition and its “harm to consumers resulting from the rule-of-reason treatment of minimum RPM seems to outweigh the benefits.” (MacKay and Smith 2013)...