Management Accounting Module: Detailed Analysis of Perceived Costs

This assignment delves into the concept of perceived cost within the realm of management accounting. It defines perceived cost as the value a customer attributes to a product or service, often influenced by emotional factors and the perceived benefits rather than the actual production costs. The document explores the challenges associated with measuring this subjective value, including difficulties in quantifying value, customer segmentation complexities, and the challenge of understanding diverse customer perceptions. The assignment also highlights issues such as scalability, the time and resources required for implementation, and the potential impact of competition. Various references support the analysis, providing a comprehensive understanding of the topic. The assignment underscores the importance of thorough research and strategic adaptation for businesses aiming to implement value-based pricing models effectively in the contemporary market.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
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Perceived cost is the benefits a client attributes to an item or administration of the
same. Usually, clients are unconscious of the factors that are engaged with valuing an item or
service for example, the real or evaluated expenses of creation. Clients depend on the
passionate interest of the item or benefit and their assessment of the advantages they trust
they will get. It is the degree to which an individual trusts that utilizing a technology
will cost money (Such, et al., 2016). A person's perception of cost. This is an optional trait as
it is the way the shopper considers value in respect to his or her disposable income that is
essential
The idea of perceived cost as utilized as a part of transport economics is described is
depicted. Three reasons for mistakenly apparent cost are examined in the light of customary
financial hypothesis. The idea of customers' overheads is acquainted with clarify how
expenses might be efficiently misperceived, and is consolidated into an adjusted hypothesis
of buyer conduct.
The inconvenience of apparent expenses are as per the following:
1) Problem in measuring the value: If the product is in high demand, there must be an
consideration that the pricing is made on the basis of the value it provides (Côté, et al., 2015).
Even though the measurement procedure “value” is hard. As there exists no metric or set of
rules for the measurement of the value. Creation of the systems and skill for the measurement
of the value irrespective of the time spent is a primary factor that affects the brands and
clients alike.
2). Customer segmentation: This is one of the genuine elenent influencing perceived based
costing, in light of the fact that even with a similar client the value may change dependent
upon the place and time of utilization (Weatherburn and Schnepel 2015). In order to

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overcome this the brands should direct thorough research on their clients consistently, and
fragment them accordingly.
3) It is difficult to know customer’s perception: Various clients have diverse impression of
the item/benefit. This influences estimating an item/to benefit in view of "value" troublesome
on the grounds that it must not be received in view of presumptions
4) It is not scalable: As the organization develops it may turn out to be extremely hard scale
the services as it is problematic to put value-based pricing in bigger organisations where the
employee levels of skill may not be very high.
5) It takes time and resources: The strategy is basic, however as there exists no
measurements that cannot be simply pull out and regulate the cost fastly. It requires
additional investment for to do the exploration (Franciosi 2016). Involuntarily, most of the
brands shy away from it, though it is been identified be the most appropriate pricing model in
the recent competitive market.
6) Competition: The organisations that accept the perceived costing model might be losing a
lot of their market shares by giving opportunities to the competitors to offer prices that are
lower.

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References
Côté, J., Cossette, S., Ramirez-Garcia, P., Pokomandy, A., Worthington, C., Gagnon, M.P.,
Auger, P., Boudreau, F., Miranda, J., Guéhéneuc, Y.G. and Tremblay, C., 2015. Evaluation
of a Web-based tailored intervention (TAVIE en santé) to support people living with HIV in
the adoption of health promoting behaviours: an online randomized controlled trial
protocol. BMC public health, 15(1), p.1042.
Franciosi, S.J., 2016. Simulation Game Impacts on Perceptions of Nuclear Energy.
In Intersections in Simulation and Gaming (pp. 331-341). Springer, Cham.
Such, J.M., Gouglidis, A., Knowles, W., Misra, G. and Rashid, A., 2016. Information
assurance techniques: Perceived cost effectiveness. Computers & Security, 60, pp.117-133.
Weatherburn, D. and Schnepel, K.T., 2015. Economic adversity and crime: old theories and
new evidence. Australian Journal of Social Issues, 50(1), pp.89-106.