Question

Accounting 2.

Assignment: You have to interview a manufacturing company on consumer products, and construction products (flooring).

After interviewing them on topics such as their budgeting process, pricing process, and differential analysis.

What are a few recommendations one can provide on how these companies could improve what they’re doing in using those three topics?

Please be detailed and provide 2-3 recommendations for each company using each topic provided. Thank you!

Answer 1

Company on Consumer Products

Budgeting Process:

1. Zero-Based Budgeting - A budgeting process that allocates funding based on program efficiency and necessity rather than the budget history.

Includes setting guidelines, incenting the right behavior, communicating to retailers and monitoring performance.

2. Consumer goods companies to gain from government’s spending plans which is aimed at rural development.

3.Because consumers in all regions are increasingly interested in health issues and local governments are reacting by crafting stricter food and drink regulations, global Consumer Product Companies are altering the fundamental formulas of some of their products.

Pricing Process:

Differential Analysis:

1. Analyzing different cost analysis option can help consumer products manufacturing companies to make the best decisions for its bottom line.

2. Differential revenue analysis, focuses on alternatives based on their potential to bring in increased business.

3. Differential analysis may indicate that the start-up costs associated with a new manufacturing facility could be a long-term asset if that capacity leads to greater revenue opportunities compared with staying the course and not breaking ground. Comparing the cost differential and revenue differential between alternatives shows you where you can realize the most profit.

Company on Construction Projects (Flooring)

1. To determine the price, the marketer needs to understand the customer’s perception of benefits as well as his or her perception of the costs other than price. The marketer also needs to remember that his or her cost is unimportant in determining the customer’s perceptions. The customer cares about the marketer’s price, not cost.
2. If you’re planning to set the price above the price of your competitor, then you’d need to bring in new features and improvements in your product that would justify the increased price.
3. To develop a consistent, commercially justifiable list of pricing and trading terms.

Budgeting Process:

Pricing Process:

1. At some point during the building process, you are sure to encounter several surprise costs. Minimizing these costs up front can lead to increased efficiency and a greater likelihood of meeting the completion deadline. Contingency allowances are a way for such unforeseen costs.
2. Site preparation costs may include labour costs, machinery costs as well as erosion control.
3. Safety Protection and site cleanliness costs associated with housekeeping ensuring the project team safe and separating construction activities from public.
4. It is crucial to prepare for cost overruns when determining a new home construction cost.
5. Be proactive to avoid cost overruns.