Management Accounting: Costing and Budgeting

Table of Contents
1.

Introduction..............................................................................................................2

2.

Different types of cost uncured in Foxwood Company with an appooriate cos

classification( 1a)............................................................................................................................3
3.
given. (1b)

The need for and operation of, different costing methods on the information
5

4.

The costs using appropriate technique for the production bandsaw blades. (1c). .8

5.

The analysis with histogram and routine cost reports. (1d+2a)........................11

6.

The indicators of productivity, efficiency and effectiveness. (2b)......................14

7.

The principles of quality and value and identify potential improvements. (2c)
17

8.

Conclusion..............................................................................................................22

9.

References...............................................................................................................22

Management Accounting: Costing and Budgeting

1. Introduction

Foxwood Company is a metal- and woodcutting manufacturer, selling products to the

home construction market. Foxwood founded in 1996, is situated in the Dong Nai Province, a
few km from HCMC. It is operating in the metal-working sector, and is specializing in
production of hacksaw frames in different forms and sizes for metal cutting and wood cutting.
Foxwood uses its high-technology equipment it is producing millions of pieces annually. Among
their clients are the world's leading tools manufacturers located in South East Asia. In addition to
the high quality of products that are made from first-class materials and meet environmental
standards. Foxwood offer their clients guarantees and expertise.
(Source: scenario)

Management Accounting: Costing and Budgeting

2. Different types of cost uncured in Foxwood Company with an appooriate cos
classification( 1a)
In manufacturing, there are many expenses to carry out production. So, we understand
costs and classify them in a clear otherwise it will lose control. And here is the classification of
the company cost Foxwood.
-

Direct cost
Direct manufacturing labor
Direct material inventory Jan. 1, 2010
Direct material inventory Dec. 31,2010
Work-in-process inventory Jan. 1,2010
Work-in-process inventory Dec.

31,2010
Direct material purchased

Indirect cost
Sandpaper
Material handling costs
Lubricants and coolants
Miscellaneous indirect manufacturing

labor
Plan leasing costs
Depreciation plant equipment
Property taxes on plant equipment
Fire insurance on plant equipment
Marketing promotions
Marketing salaries
Distribution costs
Customers service costs

Fixed cost
Plant-leasing costs
Depreciationplant equipment
Property taxes on plant equipment
Fire insurance on plant equipment
Marketing promotions
Marketing salaries
Distribution costs
Customer-service costs

Variable cost
Sandpaper
Materials-handling costs
Lubricants and coolants
Miscellaneous indirect manufacturing labor
Direct manufacturing labor
Direct materials inventory Jan. 1, 2010
Direct materials inventory Dec. 31, 2010
Work-in-process inventory Jan. 1, 2010
Work-in-process inventory Dec. 31, 2010
Direct materials purchased

Here are the types of cost for Foxwood

Cost classification for stock valuation and profit measurement
Direct cost: A direct cost is a cost that can be traced in full to the production,
service or department that is being costed.
The direct costs include three types:
3

Management Accounting: Costing and Budgeting

o Direct materials costs are the costs of materials that are known to have
been used in making and selling a product or providing a service. These
costs are used to purchase the raw materials for manufacture products .
o Direct labour costs are the specific costs of the workforce used to make
a production or provide a service. Direct labour costs are established by
measuring the time taken for a job, or the time taken in direct
production work. This is the cost of direct labour resources for
manufacture products Foxwood. At Foxwood, this cost is used by paying
wages to workers. And the cost of direct labour cost is used by
measuring the time taken for a job, or the time taken in direct production
for Foxwood.
o Other direct expenses are those expense that have been incurred in full
as a direct consequence of making a product, or providing a service, or
running a department. At Foxwood this cost is used as the cost of

procurement of equipment and machinery for production.

Indirect cost/overhead is a cost that is incurred in the course of making a
product, providing service or running a department, but which cannot be traced

directly and in full to the product, service or department.

Cost classification for decision making: These costs are classified into two
categories: fixed costs and variable costs.
A fixed costs is a costs which is incurred for a particular period of time and
which, within certain activity levels, is unaffected by changes in the level of

activity. Fixed costs at Foxwood is a cost to pay wages to officers.

A variable cost is a cost which tends tends to vary with the level of activity. And
variable costs at Foxwood is the raw material costs because raw materials can be

changed depending on the production of Foxwood.

Cost classification for control: The purpose of cost accounting is to provide control
information for managers in Fixwood. And management wants to know whether a
specific item costs under control or not, it includes two types:
A controllable cost is a cost which can be influenced by management decisions
and actions. These costs is affected by the decision of this is spending on
advertising of products and salary for workers,etc.
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Management Accounting: Costing and Budgeting

A uncontrollable cost is any cost that cannot be affected by management within a

given time spam. And here, the kind that Foxwood suffered costs are the costs
related to the environment, taxes to the government and some costs incurred for

the renting of machinery of products for a number of products in Foxwood.

3. The need for and operation of, different costing methods on the information given.
(1b)
Foxwood companies use accounting methods consistent with the type of goods produced
or services provided. So, Foxwood has all 4 cost of the system to easily manage and execute it
help Foxwood save time and cost of implementation: job costing, contract costing, batch costing,
and service costing. With 4 of this cost, each cost functions and have different tasks depending
on the circumstances and characteristics suitable for application.
Job costing: This is a method applied in the cost of work done and it was asked by
a customer in order and done in a short time.
Contract costing: This is a method of job costing in which the cost of it is done
with much greater extent that contracts made by the requirements between
suppliers and customers through the orders in the long run . In addition, it applies
to work performed by the special requirements through each order.
Batch costing: is a unit cost includes the cost of each separate group and easily
identify by the unit to identify the separate in the process of producing goods. It is
considered one of the manufacture products process.
Service costing: The cost of this service is the cost accounting for services or
functions through such as canteens, protection, etc. It usually applies to the
operating companies to provide services.
Through 4 above and cost based on the situation of the Foxwood, Foxwood should use
methods 'job costing'. Because the production process of Foxwood manufacture products in
small groups and each group can be considered a work from which it helps to Foxwod can
control its costs.

Management Accounting: Costing and Budgeting

Income Statement
For the year Ended December 31, 2010
Revenue
$
1,360,000

Revenue
Cost of good sold
Begging finished good inventory jan 1 2010
Cost of good manufactory
Good availabe manufactory
Ending finishaed good inventory Dec 1
2010

$
100,000
$
960,000
$
1,060,000
$
150,000
$
910,000
$
450,000

Toatal cost of good sold

Gross profit
Operating expenses
Marketing promotion
Marketing salaries
Distribution cost
Customer service cost

$
60,000
$
100,000
$
70,000
$
100,000
$
330,000
$
120,000
$
$
120,000
$
$
120,000

Toatal operating expense

Income Before Interest & Taxes
Interest (0%)
Income Before Taxex
Interest Tax (0%)
Next Income

Management Accounting: Costing and Budgeting

The table Income statement above was calculated as follow

Cost of good sold = Beginning finished goods inventory Jan 1, 2010 + Cost of goods
manufactured Deduct ending finished goods inventory Dec 31,2001 = $100,000 +

$960,000 $150,000 = $910,000

Gross margin = Revenue Cost of good sold = $1,360,000 $910,000 = $450,000
Operation costs = Marketing promotions + Marketing salaries + Distribution costs +

Customers-service costs = $60,000 + $100,000 + $70,000 + $100,000 = $330,000.

Operating income = Gross margin Operation costs = $450,000 $330,000 = $120,000
Schedule of cost of goods manufactured
For the year ended Dec 31, 2010

Direct materials
Beginning inventory, Jan 1, 2010
Purchases of direct materials
Cost of direct materials available for
use
Ending inventory, Dec 31, 2010
Direct materials used
Direct manufacturing labor
Indirect manufacturing costs
Sandpaper
Materials-handling costs
Lubricants and coolants
Miscellaneous indirect manufacturing
labor
Plant-leasing costs
Depreciation-plant equipment
Property taxes on plant equipment
Fire insurance on plant equipment

$ 40,000
$ 460,000
$ 500,000
$ 50,000
$ 450,000
$ 300,000
$
$
$

2,000
70,000
5,000

(V)
(V)
(V)

$
$
$
$
$

40,000
54,000
36,000
4,000
3,000

(V)
(F)
(F)
(F)
(F)

$ 214,000

Manufacturing costs incurred during 2010

Beginning work-in process inventory, Jan
1,2010
Total manufacturing costs to account for
Ending work-in process inventory, Dec
31, 2010

$ 964,000

Cost of goods manufactured

$ 960,000

$ 10,000
$ 974,000
$

14,000

(V)
(V)

Management Accounting: Costing and Budgeting

The table Schedule of cost of goods manufactured above was calculated as follow:

Cost of direct materials available for use = Beginning inventory, Jan 1, 2010 + Purchase

of direct material= $40,000 + $460,000 = $500,000.

Direct materials use = Cost of direct materials available for use - Ending inventory, Dec

31, 2010= $500,000 $50,000 = $450,000.

Indirect manufacturing costs = Sandpaper + Materials-handling costs + Lubricants and
coolants + Miscellaneous indirect manufacturing labor + Plant-leasing costs +
Depreciation-plant equipment + Property taxes on plant equipment + Fire insurance on
plant equipment = $2,000 + $70,000 + $5,000 + $40,000 + $54,000 + $36,000 + $4,000+

$3,000 = $214,000.
Manufacturing costs incurred during 2010 = Direct material used + Direct manufacturing

labor + Indirect manufacturing costs = $450,000 + $300,000 + $214,000 = $964,000.

Total manufacturing costs to account for = Manufacturing costs incurred during 2010 +

Beginning work-in process inventory, Jan 1,2010 = $964,000 + $10,000 = $974,000.

Cost of goods manufactured = Total manufacturing costs to account for - Ending work-in

process inventory, Dec 31, 2010 = $974,000 $14,000 = $960,000.

Direct material unit cost = Direct material used / Units produced = $450,000 / $900, 000
units = $0.50 per units.
Plan-leasing unit cost = Plant-leasing costs / Units produced
= $54,000 / $900,000
units = $0.06 per unit.
The direct material costs are variable. Therefore, the total would increase from $450,000

to $500,000
In addition, The unit cost would be unaffected: $500,000: 1,000,000 units = $0.50 per
unit.
In contrast, the plant-leasing costs are fixed of $54,000, so the total would not increase.
However, the plant-leasing cost per unit would decrease from $0.060 to $0.054 = $54,000:
1,000,000 units.
4. The costs using appropriate technique for the production bandsaw blades. (1c)

Management Accounting: Costing and Budgeting

There are many ways to calculate the total cost analysis. But we applied two methods is
the cost Marginal Costing and Absorption Costing for the production.
Marginal costing:
In marginal costing:
a. Closing stock are valued at marginal production cost.
b. Fixed costs are charge in full against the profit of the period in which they are
incurred.
(Source: text book p.71)

Opening
stock
Closing
stock

June
$
$
1,200

July
$
1,200
$
400

A marginal costing system will value all units at the variable production cost of $25
($18+$4+$3) per unit.
Profit statement for marginal costing
June
july
$
Sales revenue
640,000
$
$
Opening stock
30,000
Variable production
$
$
cost
350,000
255,000
$
$
350,000
285,000
Less value of closing
$
$
stock
30,000
10,000
$
Variable cost of sale
320,000
$
Contribution
320,000
$
Overhead
203,000
$
Profit/(loss)
117,000
$
Profit/(loss) per unit
9.14

$
550,000

$
275,000
$
275,000
$
194,000
$
81,000
$
7.4

Management Accounting: Costing and Budgeting

Contribution per unit

$
25

$
25

Absorption costing:
In absorption costing (some times referred to as full costing)
a. Closing stocks are valued at full production cost, and include a share of fixed
production costs.
b. This means that the cost of sales in a period will include some fixed overhead
incurred in a previous period (in opening stock values) and will exclude some fixed
overhead incurred in the current period but carried forward in closing stock values
as a charge to a subsequent accounting period.
Budgerd
99000

Absorption rate = production cots

=
=9
Budgeted output 11000

Actual fix production overhead=99000.

Aborted fixed production overhead= Production Absorption rate.
Over/under absorption of overhead = Actual fix production overhead - Aborted
fixed production overhead.

Absorbed fixed production overhead

Over/under absorption of over head

Direct material
Direct wages
Variable production overhead

June
$
126,000
$
27,000

July
$
91,800
$
(7,200)

$
18
$
4
$
3
$
25
$
9
$
34

Variable cost
Production overhead
Full cost

10

Management Accounting: Costing and Budgeting

june
$
14,000
$
26,000
$
64,000
$
104,000

fixed selling expense

Fixed administration expense
Variable selling expense

July
$
14,000
$
26,000
$
55,000
$
95,000

Full production cost= Full cost Production Unit

Profit Statement for Absorption Costing

June
$
Sales revenue
640,000
$
Opening stock
$
Full production cost
476,000
$
Closing stock
(40,800)
$
Production cost of sales
435,200
Adjustment for over -aborted
$
overhead
(27,000)
$
Total production cost
408,200
$
Gross profit
231,800
$
Non production cost
104,000
$
Net profit
127,800

Marginal
costing
Absorption
costing

June
$
117,000
$
127,800
$
10,800

July
$
550,000
$
40,800
$
346,800
$
(13,600)
$
374,000
$
7,200
$
381,200
$
168,800
$
95,000
$
73,800

Reconcilation
July
$ 81,000
$ 73,800
$ 7,200

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Management Accounting: Costing and Budgeting

Over the two tables above might cost shows the cost differences between the two
marginal cost and absorption cost.
We can easily see the fixed overhead are made in stock rather than need to be
written off against revenue in the period. Here, then stocks it reduces marginal
costing profits lower and increased costs upon profits at absorption costing profits
higher.
In addition, fixed overhead will be performed in the issued stocks will be paid for
the sales period. And it reduces the lead stocks returns then absorption costing
profits will be lower than the marginal costing profits .
5. The analysis with histogram and routine cost reports. (1d+2a)
Histogram

Sales
revenue
Gross profit
Net Profit

June

July

$
640,000
$
204,800
$
127,800

$
550,000
$
176,000
$
73,800

$700,000
$600,000

$640,000
$550,000

$500,000
$400,000
$300,000

$204,800
$176,000

$200,000

June
$127,800
$73,800

July

$100,000
$-

Sales revenue

Gross profit

Net Profit

Historgram of company's operation

According to the histogram, we can see that there was a noticeable change of Foxwood
revenue and profit between June and July. For June to July, the company revenue increased from
12

Management Accounting: Costing and Budgeting

$640,000 to $50,000 while the profit decreased from $117,000 to $81,000. From there, make
profits of Foxwood down from $ 127.800 Foxwood down to $ 73.800.
Cost report: Here is the detailed report and clear the different costs of the total
cost of the product. It provides the classification and the cost of the finished
product. Thereby, the management and use this data to make decisions consistent
with Foxwood.

Statement showing total cost on 31 June 2010 (output 14000 units)

Cost per
Details
Amount
Amount
unit
Revenue(1280 units)

640,000.00

50.00

Direct Material

252,000.0
0

18.00

Direct wages

56,000.00

4.00

Variable production overhead

42,000.00

3.00

Prime cost

350,000.0
0

Fixed production overhead at 9$ per

unit (1400 units )
Add: openning stock

126,000.0
0

9.00

13

Management Accounting: Costing and Budgeting

Full production cost (1400units)
Less: closing stock of finished
good(1200units)
Full production cost of sale(12800
units)

476,000.0
0
40,800.00
435,200.00

Gross profit
Less selling and administration
expense

204,800.00

16.00

Fixed administration expense

26,000.00

2.03

Fixed selling expenses

14,000.00

1.09

Variable selling expense

64,000.00

5.00
104,000.00

Add: over/(under) absorbed fixed

Net profit
Cost of good sold (Revenue-Net
profit)

100,800.00

7.88

27,000.00

2.11

127,800.00

9.99

512,200.00

40.02

14

Management Accounting: Costing and Budgeting

Statement showing total cost on 31 June 2010 (output 10200 units)
Cost per
Details
Amount
Amount
unit
Revenue(1280 units)

550,000.00

50.00

Direct Material

183,600.0
0

18.00

Direct wages

40,800.00

4.00

Variable production overhead

30,600.00

3.00

Prime cost
Fixed production overhead at 34$ per
unit (10200 units )
Add: openning stock at $34 per
units(1200)
Full production cost (11400units)
Less: closing stock of finished
good(400units)
Full production cost of sale(11000
units)

255,000.
00
91,800.00

9.00

40,800.00
387,600.
00
13,600.00
374,000.00

Gross profit
Less selling and administration
expense

176,000.00

16.00

Fixed administration expense

26,000.00

2.36

Fixed selling expenses

14,000.00

1.27

Variable selling expense

64,000.00

5.00
95,000.00

Add: over/(under) absorbed fixed

Net profit
Cost of good sold (Revenue-Net
profit)

81,000.00

7.36

(7,200.00)

(0.65)

73,800.00

6.71

476,200.00

43.29

15

Management Accounting: Costing and Budgeting

6. The indicators of productivity, efficiency and effectiveness. (2b)

The calculation and evaluation of productivity and effectiveness before implementing a
quality management program (QMP). Since then, we will rely on that information to determine
the numbers after making QMP.
a. Productivity: First we need to calculate and evaluate the productivity of the process,
thereby determining the factors affecting productivity. Thereby, we can calculate the
total product to produce the orders.
Company gets order of 5000 units.
According estimate that there will have 5% of total products will have
mistake during delivering to customer (so they have to replace it without
addition money). After implementing QMP, it reduced to 2,5 %.
Before QPM: 5% of 5000 units = 250 units
After QPM: 2,5% of 5000 units = 125 units
Before QPM
- Equirements: 5000 units
- Pecification failure: 250 units
- Total: 5250 units

After QPM
- Equirements: 5000 units
- Pecification failure: 125 units
- Total: 5125 units

During final inspection stage, Foxwood will lose 12,5 % of total finished
product.But after the application of QPM, it cut down to 2.5%
Before QPM:
12,5
Downgrading= 5250 (100 12,5 ) = 750 units
After QPM:
Downgrading=5250

7,5
=416units
( 100 7,5 )

The totals product Foxwood need to produce follow the table below:
Productivity

Before QPM
Units

After QPM
Units

Total sales requirement

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Management Accounting: Costing and Budgeting

Specification failure (5%;2,5%)

Downgrading for inspection

5,000

5,000

250

125

5,250

5,125

750

416

6,000

5,541

b. Efficiency: Here it will be calculated and evaluated on the purchase of basic materials
and processing, product loss and scrapped.
Before and After QPM, Foxwood produce 6000 units and 5541 units

respectively at 8sp. Meter.

Before QPM: 6000 8 = 48000 sp. meter
After QPM: 5541 8 = 44328 sp. Meter
During processing we waste 4% of material A, but after QPM decrease
2,5%. So waster of material A in processing is:

Before QPM:

After QPM:

48000

44328

4
=2000 sp . meter
(100 4 )

2,5
=1137 sp . meter
(100 2,5)

Before QPM
-

After QPM

(sq. meter)
(sq. meter)
Urchasing of material: 48000
- Equirements: 44328
Rocessing waste: 2000
- Reocessing waste: 1137
Total: 50000
- Total: 45465
Upon receipt of materials from suppliers, the Foxwood also removed with
5% of raw materials received from suppliers. But after the application of
QPM, it dropped to 3%.
Before QPM
Scrapped =50000
After QPM
Scrapped =45465

5
=2631
(100 5 )
3
=1406
( 100 3 )

17

Management Accounting: Costing and Budgeting

Total Material:
Efficiency

Before QPM
Square
metter

After QPM
Square
metter

Purchasing of material

48,000

44,328

Processing loss

2,000

1,137

50,000

45,465

2,632

1,406

52,632

46,871

Scrapped

c. Effectiveness: we can depend on gross machine hours and idle time to calculate the
effectiveness.
Gross machine hour: When producing a product unit, Foxwood need to
take 0.6 hours to run the machine. With the application of QPM, Foxwood

only 0.5 hours of run the machine.

Before QPM: 0,6 6000 = 3600 hours
After QPM: 0,5 5541 = 2770,5 hours
Idle time: it is need 20% of Gross machine hour used. But when applied
QPM, it dropped to 12.5%.
Before QPM:
20
Scrapped =3600
=900 hours
( 100 20 )
After QPM:
Scrapped =2770,5

Efficiency

Gross machine hours

12,5
=395,79 hours
( 100 12,5 )

Before QPM
Hours

3,600

After QPM
Hours

2,771

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Management Accounting: Costing and Budgeting

Idle time

900

396

4,500

3,167

7. The principles of quality and value and identify potential improvements. (2c)
After conducting the application process Foxwood QPM should be made to Profit and
Loss account to calculate and evaluate the profit or loss for Foxwood. Since then, The
efficiencies of the process after making QPM .

Profit and Loss account

Sales revenue

Sales down
graded
Total sales
revenue

Before
QPM

After
QPM

$
5,000,00
0
$
525,000
$
5,525,00
0

$
5,000,00
0
$
291,200
$
5,291,20
0

$
2,105,28
0
$
52,632
$
250,000
$
150,000
$
600,000
$
200,000
$

$
1,874,84
0
$
46,871
$
150,000
$
50,000
$
540,000
$
600,000
$

(1)

Cost and
Expenses
Total material Purchasing costs
Inspection & stor age of Material
A costs
Inspection & other
costs
Liabilities
Administration & distribution
expenses
Prevention programme
costs
Machine costs

(2)
(3)
(4)
(5)
(6)
(7)

19

Management Accounting: Costing and Budgeting

Net profit

1,800,00
0
$
5,157,91
2

1,266,80
0
$
4,528,51
1

$
367,088

$
762,689

(8)

(1): Foxwood have to 750 units of downgrade. It is sale to 70% of selling

price:
Downgrade= Units of downgrade 70% of selling price
Before QPM:
Downgrade= 750 units 0,7% $1000= $525000
After QPM
Downgrade= 416 units 0,7% $1000 = $291200
(2): Costs of material purchasing= totals purchase of material A (sq. meter)

$40 per square meter.

Before QPM
Total material purchasing cost= 52632(sp meter) $40 = $ 2105280
After QPM
Total material purchasing cost= 46871(sp meter) $40 = $1874840
(3) the inspection and storage of material A cost is charged $1 per sq meter
purchased
In speciation and storage of material A cost = total purchase of material A
(sq. meter) $1 per sq meter.
Before QPM
In speciation and storage of material A cost = 52632(sq meter) $1 =
$52632
After QPM
In speciation and storage of material A cost = 46871(sq meter) $1 =

$46871
(4): Foxwood collect them in scenario
Before QPM
Inspection and other costs= $250000
After QPM
Inspection and other costs= reduction of 40% of the existing cost= (100%40%) $250000 = $150000
20

Management Accounting: Costing and Budgeting

(5): the liabilities are estimated at 3% of revenue. However, it decreased to 1%

after QPM
Before QPM
Liabilities = $5000000 3% = $150000
After QPM
Liabilities = $5000000 1%= $50000
(6): Foxwood collect them in scenario
Before QPM:
Administration and distribution expense = $600000
After QPM:
Administration and distribution expense= reduction of 10% of the existing
cost = (100%-10%) $600000= $ 540000
(7): Foxwood collect them in scenario
Before QPM:
Prevention program cost= $200000
After QPM:
Prevention program cost= $600000
(8): The machine cost is calculated by total hours Foxwood need for

producing 5000 units machine cost per gross hours.

Before QPM:
Machine cost = 4500 (hours) $400 = $ 1800000
After QPM:
Machine cost = 3167 (hours) $400 = $ 1266800
Identify improvement:
Quality:
Foxwood is the manufacturer of high technology products, so the quality is the very
important with Foxwood. Thereby, the quality of the product will determine the customer's
satisfaction. The customers make more requests, so it Foxwood need to respond quickly. In
addition, their clients always want to use high quality products, so Foxwood always improve the
quality of their products.
Improving the quality of Foxwood have adopted some form of improved quality.
Foxwood has applied ISO 9003:2008 quality standards, which help stabilize the company in
terms of product quality upon delivery to customers and will ensure the quality of the company
has made.

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Management Accounting: Costing and Budgeting

And Foxwoods should add degree to which a product or service is fit for its purpose will
depend on the product or service in question:

Cost: Customer expect some product to be cheap because of their short

life. Currently Foxwood, is providing a hacksaw many sizes and different

models, so customers can select products suitable for their and good price.
Life: Other products are expected to last for longer and to be reliable and
hence are more expensive. Foxwood's products are manufactured by metal
durable good, so the product life of Foxwood is long and the customer

does not need to pay attention to the product life.

Manner of production: with some products, customers expect the use of
highly skilled labour and/or expensive raw materials. Because customers
are always interested in quality products, so that raw materials for
products of Foxwood is a high quality and expensive, besides Foxwood

also uses skilled labor to produce best products for customers.

Esteem. If a customer is looking for esteem or status from a product, the
product is likely to have a high price, a designer label and/or expensive
package. So therefore, Foxwood keep their products with a high and
reasonable rates, expensive package and designer label with the aim of
giving customers seeking esteem from the products of Foxwood.

In addition, Foxwood should adopt TQM. TQM is a management philosophy that seeks
to integrate all organizational functions (marketing, finance, design, engineering, production,
customer service etc) to focus on meeting customer needs and organizational objectives.
And TQM have three principles following:

Satisfy the customer: Foxwood will provide customers with products of high
quality to bring satisfaction to customers. In addition, the service will provide
more and better quality to customers . Since then, increasing customer
satisfaction and make customers feel important and valued.

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Satisfy suppliers: First, Foxwood need to meet the standards of providers by

providing guidelines and specific requirements and clear. This requires Foxwood
pay on time to get the truth.
Continuous improvement: Foxwood need to review their business processes to

improve their business processes because their opponents are always improving.
So, Foxwood need to capture the market to improve appropriate to develop and
maintain markets. Besides, Foxwood need to know to encourage and motivate
their employees to participate actively to bring improved highly effective for

Foxwood.
Value.

Besides, the Foxwood should have set the appropriate plan to maintain and develop their
values.

Expanding the domestic market and abroad, the new provincial

Diversification of products to meet customer needs
Open multiple promotions to attract customers.
Increase advertising products on TV, internet and magazine.

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8. Conclusion
This report will provide special-purpose information and assisting management with dayto-day problems and planning for the future
9.

References

BPP Professional Education Finance Specialist Units 9-12 Supporting Foundation

Degrees Course book

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