You are the owner of a small coffee shop called “BeanBuzz,” and you’re facing a critical decision regarding the pricing strategy: Cost And Management Accounting Assignment, MSU, Malaysia
University | Management & Science University (MSU) |
Subject | Cost And Management Accounting Assignment |
ANSWER ALL QUESTIONS.
You are the owner of a small coffee shop called “BeanBuzz,” and you’re facing a critical decision regarding the pricing strategy for your coffee products. The shop offers a variety of coffee options, including regular coffee, lattes, cappuccinos, and specialty drinks. You’ve noticed that your profit margins have been fluctuating recently, and you’re unsure of the best pricing approach to maximize profitability in the short term.
Here’s the current situation:
- Your coffee shop has fixed costs such as rent, salaries, and equipment maintenance, totaling $3,000 per month. The variable costs per cup of coffee (coffee beans, milk, cups, etc.) are $1.50.
- You currently charge $3.50 for a regular coffee, $4.50 for a latte, $5.00 for a cappuccino, and $6.50 for specialty drinks. These prices have been in place for a while.
- Your monthly sales volume has been inconsistent, but on average, you sell 2,000 cups of regular coffee, 800 lattes, 500 cappuccinos, and 300 specialty drinks.
- Recently, a new coffee shop opened nearby, offering lower prices, which has started affecting your sales.
Are You Searching Answer of this Question? Request Malaysian Writers to Write a plagiarism Free Copy for You.
REQUIRED:
(a) Assess whether your profits are sensitive to changes in sales volume and pricing. What are the implications of this sensitivity?
(You may prefer to show some calculations to justify your explanation, if applicable)
(b) Assess whether you should consider adjusting your coffee prices to compete with the new coffee shop while maintaining or increasing profitability.
(You may prefer to show some calculations to justify your explanation, if applicable)
(c) Discuss the importance of decision makers in the company knowing the different types of cost behaviors in producing the companies’ products.
(d) Discuss the limitations and weaknesses of CVP analysis in this scenario. What other factors or qualitative considerations should be considered when making this decision?
Stuck in Completing this Assignment and feeling stressed ? Take our Private Writing Services.
Get Help By Expert
Facing a crucial decision for your "BeanBuzz" coffee shop in your Cost And Management Accounting assignment at MSU? Get specialized online assignment help and Online Exam Help in Malaysia from our experts. Tailored for MSU students, our services assist with individual assignments, ensuring academic success. Trust us to guide you through complexities and ace your coursework.
Recent Solved Questions
- FIN20014 Using Excel Spreadsheet, prepare a full analysis to be presented to the CFO of MAJESTIC CORP in evaluating: Financial Management Individual Assignment 2, AUTI, Malaysia
- You are required to develop OPMS which will be used by “OCEAN Sdn Bhd” a Malaysian leading company: Python Programming For Beginners Assignment, MU, Malaysia
- TSE307/05: Describes Logical Reasoning which includes Critical Thinking in a formal and daily task performance: computational Assignment, OUM, Malaysia
- There is an urgency for us to implement energy saving in buildings because of the high energy consumption and CO2 emission: Wind Engineering Thesis, UTM, Malaysia
- Discuss what is a competitive advantage. Why is so important that competitive advantage needs: strategic management Assignment, ATC, Malaysia
- BBF305/03: Merry Karthik is a bank executive who has just inherited a large sum of money Having spent several years in the bank’s investments department: Investment and Portfolio Management Assignment, WOU, Malaysia
- MGT510: Swipe 50 limited manufactures a specialized screen protector for laptop computers: Managerial Accounting Course Work, EIU, Malaysia
- BLC201: Intermodals are the use of two or more carriers of different modes in the thorough movement of a shipment: Introduction To Logistics And Supply Chain Management Assignment, WOU, Malaysia
- MPU3242: A mission statement provides an ideal vision for the company’s future and directs its growth: INNOVATION MANAGEMENT Assignment, UniKL, Malaysia
- The analysis of impact of B2B E-Commerce on trading cost: Logistics Operations Management Assignment, WMC, Malaysia