Question

For each type of service organisation (professional service firms, service shops and mass service entities): LO 6.5, 6.6 (a) identify the key features (b) identify three business examples (c) describe the type of costing system that would be most appropriate to that type of service

Answer 1

Below is the answer for service organisation

Professional Service Firms
Key Features	Business examples	Costing System
People oriented, making team professional in all possible way or team of professionals to deliver best to customer	Architectural/engineering firms	Job Order cost system
Belives in qualtiy of deliverables and always provide quality work	Accounting firms
Fulfilling the challenges of providing best as per requirement or customised service offer to clients	Wealth management firms
Pricing based on quality
Service Shops
Key Features	Business examples	Costing System
Operation of shops are open oriented, customer is involved throuhout of servies process	Hotel industry	Job Costing
Services can be tangiable or intanible but mostlty they are intangible	Hospitals	Process costing
Time perishable, it would be available on particular time or else its wasted	Banks
Mass Service Entity
Key Features	Business examples	Costing System
Team consist of ordinary or non professionals	Utility providers like electricity	Process costing
Services provides through back end offices	Public Transport
Mostly looking at the delivery of service rather than focusing on quality	Postal services