looking for help with this paper in powerpoint format
madgrunt
acc501_slp1.pptxAccounting Cost Systems and Cost Behavior
Air Filter for Ventilation Systems
Air Filter for Ventilation Systems
I would like to present my idea of producing air filters for ventilation systems.
Over years, the number of ventilation systems installed in homes and office location has increased significantly.
This provides huge business opportunity to improve the markets for the air filters.
The air filters are aimed at purifying air including taking out dust, pollen grains, and viruses from the air.
This will assist in improving the overall air quality and purity.
The company should invest a considerable capital in the development of air filters.
In summary, I will provide a cost behavior analysis on the cost elements of the air filters as well as pricing strategy and approach.
Cost Estimates and Pricing
The cost estimates of producing the air filters includes following
Table 1:
Cost Estimates of Air Filters
| Cost element | Estimates(Cost per Unit, S$) |
| Labor Cost | 7.0 |
| Parts cost | 3.0 |
| Fixed Cost | 2.0 |
| Overhead cost | 5.5 |
| Total cost per unit | 17.5 |
Pricing Suggestions
It would be recommendable to price the air filters at close to $25 and $30.
Such prices would be useful in covering the overall costs involved in the production of the air filters in the company.
It is important to use the cost plus costing approach to determine the selling price of the air filters.
This will help in ensuring that the company makes a considerable amount of profits form the new product.
The cost plus pricing approach is based on the need to assist the company with the overall production costs which stands at $17.5 per unit.
Therefore, the selling price of $25 per cent or $30 per cent is appropriate to ensure that all the costs involved are covered by the consumers.
Conclusion
With continued production, it is expected that the parts cost per unit might lower to $1.5 per unit and the overhead costs to $3.0.
This would lower the overall costs per unit to $12.5 due to the economies of scale.
The reduction in the overall costs per unit would offer opportunity to grow the production of the products as well as improving the potential profit.
