This chapter presents the following content: What are service organisations? differences between service and manufacturing businesses; value chains in service firms, retailers and wholesalers; service production environments; activity-based costing for services; case study: Service costing at Adelaide Bank; when should firms estimate their service costs? flow of costs in service firms; costing in retail and wholesale businesses. | Chapter 6 Service costing 6- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Outline What are service organisations? Differences between service and manufacturing businesses Value chains in service firms, retailers and wholesalers Service production environments Activity-based costing for services Case study: Service costing at Adelaide Bank When should firms estimate their service costs? Flow of costs in service firms Costing in retail and wholesale businesses 6- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith What are service organisations? Organisations that deliver help, utility or care, providing an experience, information or other intellectual content where the majority of the value is intangible rather than residing in any physical products Service organisations dominate many | Chapter 6 Service costing 6- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Outline What are service organisations? Differences between service and manufacturing businesses Value chains in service firms, retailers and wholesalers Service production environments Activity-based costing for services Case study: Service costing at Adelaide Bank When should firms estimate their service costs? Flow of costs in service firms Costing in retail and wholesale businesses 6- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith What are service organisations? Organisations that deliver help, utility or care, providing an experience, information or other intellectual content where the majority of the value is intangible rather than residing in any physical products Service organisations dominate many economies private sector, public sector, not-for profit sector 6- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Differences between service and manufacturing businesses Most services are intangible Service outputs are often heterogeneous Services are often consumed as they are produced Services are perishable and cannot be stored Some services entail some minor physical or tangible aspects 6- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Other aspects of services Retailers and wholesalers are part of the service sector They have different characteristics to most service firms Provide tangible goods as well as services Services are produced outside the service sector Most manufacturing firms provide a service component to their product Upstream and downstream segments of the value
