Choi Fung Hong Company Limited

Topics: Costs, Cost, Management accounting Pages: 4 (1324 words) Published: December 11, 2014
Choi Fung Hong Company Limited with Activity Based Techniques

1. Background of chosen Hong Kong Company
Choi Fung Hong Company Limited (Choi Fung Hong) incorporated as private limited company since 1995. The main business Choi Fung Hong is wholesale or retail of their skincare products. At 1995, the company has invested on manufacturing factory and start the business from the telephone order only. As a well-known skincare brand in Hong Kong, Choi Fung Hong was successes to expand their business and there are twelve stores in Hong Kong and Macau within ten years. According the internet was well developed, Choi Fung Hong also perfectly to using online shopping concept. The product types were sold on Choi Fung Hong are variety such as the face skin treatments, beauty products, men's skin care products, SPA products, cosmetics, bath and personal care products. And there are a lot of products was the “must have items” for the Hong Kong female. Those products were distributed to overseas like Singapore and Vietnam. Choi Fung Hong is intending to development with innovation, to meet customers' different needs.

2. The characteristics of company make Activity Based Techniques useful There are few characteristics were making use on Activity Based Techniques: First, Choi Fung Hong intends to have reasonable price of all their products since they want to provide the most valuable products to customer. The price would like to control within the reasonable level, it should be properly allocate the cost of each products. Activity Based Costing may help to measure the ‘real’ cost of product and the further price making which is more nearly to the reasonable price. Second, there are wider ranges of products. Choi Fung Hong was developing and produces a lot of types of product and those products may classify to different product lines such as H2O Hydrating product. It may helpful on the comparing the real cost of different product line, or each product item after allocate...

References: 1. The Choi Fung Hong Company Limited. http://www.choi-fung.com/chinese/profile.php.
2. Andrew L Friedman and Stephen R Lyne. Activity-Based Techniques: The Real Life Consequences. London: The Chartered Institute of Management Accountants, 1995
3. Gary Cokins. Activity-Based Cost Management An Executive’s Guide. Canada: John Wiley & Sons, Inc., 2001
4. Colin Drury. Management and Cost Accounting Eight Edition. United Kingdom: Cengage Learning EMEA, 2012
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