(329177927) Case Analysis(1) (1) - You have just been hired as an accountant by LifeStyle Furniture a manufacturer of specialty hand made furniture

(329177927) Case Analysis(1) (1) - You have just been hired...

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You have just been hired as an accountant by LifeStyle Furniture, a manufacturer of specialty, hand- made furniture based in Tasmania. The furniture produced by Lifestyle is in two ranges, Modern and Classical. The two ranges are different in design, but both are high quality, hand-made furniture and are priced accordingly. The owner of the company, Brendan Pierce, has always believed in pricing a quality product based on how much their larger competitors are pricing theirs. His argument has been that “our product is as good, if not better, than the mass producers of furniture, so we should be charging at least as much, if not more, than what they charge”. When you arrived at work for the first time, you learnt that the though the company has been in existence for the last twelve years, they have never had an accountant. The accounts were typically prepared by the Jodie Watts, secretary of Brendan Pierce and Tom Nicholson, a part-time accountant who came in once or twice a month. Tom has informed Brendan that he could no longer spare the time to come in and has suggested the need for an accountant on a full time basis, which is why you have been hired. Brendan, though, is still not convinced of the need for a full time accountant. “Look, why do I need a full-time accountant? At the end of the day, all I need to do is total up my revenues, total up my expenses and the difference is my profit. Do I really need to understand my product costs? What is the purpose of that? It’s not like I can lower my prices if my product costs are lower. I just follow the big guys like Harvey Norman and A-mart and price my product according to their prices. Why do I need to know what my product costs are?” asked Brendan.
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  • Fall '14
  • ienam
  • ........., Supply chain management terms, Brendan Pierce

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