Managerial accounting

Managerial accounting

Question 1

ABC is a reputable flavored juice producing company known for providing fresh, quality, and delicious juices of diversified flavor to its loyal customers. In awe of extensive competition, the company is aiming to launch a new product “Mix fruit milk shake” of four different types with the sole of objective of bringing a refreshing and healthy change in the taste of customer. The company aims to target young children between 5-20 and adult people after 45 years for the sale of its product.

The major reason of targeting young children is that they have the habit of drinking unhealthy juices during lunch intervals in schools, collages, during play times and company is planning to attract customer towards their new products as this product would not only satisfy their need but would also prove to be beneficial for their health. Primary reason of targeting adult generation after 45 years of age is that these people desperately require calcium and fresh drinks to lead a healthy life in this highly polluted environment and “Mix fruit milk shake” contains everything that they need to lead a healthy life. In view of extensive competition in the beverage industry the company has decided to set low but competitive price of $20 for the sale of this product as it believes that this price would be an edge over its competitor that are charging more than $25 to $30 for one juice bottle or packet. Furthermore, in light of company market position and huge customer Network Company is excepting to sale 20000 units in the first year of its operating and after that this quality product would be able to create a niche for its self in the industry. Moreover, in next five years company is expecting 25 percent increase in the sales of ...