sumer shopping Supecrior Services is afim that provides audi

sumer shopping Supecrior Services is afim that provides audit, tax, and advisory services to accoumines in the western United States. It employs thousands of professionals who have obtained accounting, ance, economics, and business degrees, and who focus on providing value and enhancing the operations of their clients. The firm has been in existence for nearly 70 years, and many of its clients are loyal to Superior and look nowhere else for services. Superior does not sell physical products, but it does need to consider how to price its services in order to make a profit. What costs will the company consider when deciding how much to a. charge clients for its services? b. How is accounting for Superior\'s operations different from accounting for Model\'s and Master- ful\'s operations? Are there costs that Superior will incur that the other two will not?

Solution

a) Since Superior is into audit business wherein it would charge its customers on the basis of services provided, it needs to price its services on the basis of experts involved. So, the primary cost to be considered would be remuneration paid to its employees based on the hours of work required from them to accomplish the task. The other costs to be considered (overheads) would be travelling cost (if any), equipment cost (such as laptop, internet etc.), occupancy of the work area by the expert. Once, it determines all the associated costs, Superior would add its mark-up to generate profits.