Paper Topic:
ACC501 case 2
UNIT : ACCOUNTING NAME OF STUDENT SCHOOL NAME VALUE COSTING FOR THE TWENTY FIRST CEENTURY ORGANIZATIONS Cost refers to the amount spend in producing a good or even a service This is the money spend in all departments /fields in to provide a commodity /service . This includes a summation of operational , general expenses and overhead expenditure . All direct and indirect costs are summed up to come up with the Price is the money reward in producing a product /service . Price constitutes the sales in an organization 's Income statement . This is
what a commodity retails at . Value is a customer 's worth of the product or service . This is what a customer believes he should pay on acquisition of a commodity or after getting a service
I agree with the notion of value costing in the twenty first century organizations . An example an Electrician 's cost to fix a music system at a client 's residence is 10 for travel 5 for materials and two hours labor at 20 . The value of the service to the client , who has not been able to listen to radio broadcasts , is greater than 35 , the cost Therefore the electrician may settle at charging a price of 100
The price charged should match the value that the customer /client gains from the organization 's product /service . A consideration should also be made on what other organizations in the same industry are charging , due to competition . An organization...
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