Assume you work for a consultancy firm specialized in the provision of management accounting related services. You have been appointed to work on a new project that involves recommending pricing strategies for Nature Candle'ssenior management team.

Around 750 total words are required.

It should be designed to recommend pricing strategies for Nature Candle's products, in consideration of its market position and external environment.

The following text is part of the case studyrelevant to this question.

After the case study, some work has been down in the previous project of assignment is listed, which might be helpful to the new project.

The Case of Nature Candle Limited

Nature Candle Limited is a medium-sized Australian- owned manufacturer of candles based in Richmond, Victoria. It specialises in the production of quality candles for the wholesale and retail markets. Following the "eco-friendly" value, Nature Candle Limited only produces candles made of natural ingredients, such as soy wax and beeswax, with cotton or linen wicks. Their customers range from household candle lovers to a broad range of corporate and boutique companies that are proud to put their labels on the customised candles.

The market of candles is traditionally dominated by paraffin candles made of paraffin wax - a petroleum by-product refined from crude oil that is also commonly used in beauty products. However, increasing research in recent years show that paraffin candles, particularly those with artificial scents and dyes, are potentially hazardous to users, causing damage to the brain, lung and central nerve system. Hence, more and more candle manufacturers turn their eyes to the eco-friendly candle segment. With its long-standing expertise in the design and production of high-quality soy wax and beeswax candles, unique ability to meet customer's individual needs and flexibility with specific requirements of different demanding markets, Nature Candle is able to compete with larger local manufacturers in the segment.

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The CEO is keen to resolve these issues due to certain realities in Nature Candle's external environment. In addition to the increasing competition with larger Australian candle manufacturers, the signing of free trade agreements, such as Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), has also opened the gate for candles, lower in price, manufactured in South East Asia. While Nature Candle traditionally does not compete with other players on price, the pressure of lower-priced imports on the eco-friendly candle market is being felt by the company.

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To obtain some concrete numbers to show the CEO, Bright decided to apply the proposed approach to three MCT activities: 1) the production of BW-18 beeswax candles (MCT's best- selling product); 2) production of spare candles for inventory, and 3) work done by MCT for other Nature Candle divisions. Exhibit 3 summarises the hourly requirements of these activities by department. Bright then costed these three activities using both the October plant-wide rate and the pro forma October departmental rates.

Exhibits:

Exhibit 1: Calculation of Plantwide Wand Overhead Hourly Rate for October? 9 {Mm1 Dollars? Honrs+ Wick making? $40,133? 2,52% Wax melting? 23360? 2,1381 Moldmg? 143,899? "1,6784 Custom work? 61,13??? 3,1124 Packing? 213 633? we Total W? 493,301? 31,4121 Overhead? 324 492? '3 Total Wand overhead? 1,312,?99? '3 Hourly Rate = 31311799131312 = $41.95 perhnur(= $15510 labour + $26.25 overhead)? 1.: Exhibit 2: Proposed Departmental Wand Overhead Hourly Rates? (J W Overhead Total Cost Department? per Hour? per Hour? 1121' Hour? Wick making? $20.10? $123.53? $43.63? Wax melting? 18.50? 22.61? 41.11? Molding? 19.315? 46.89? 66.64? Custom work? 23.10? 311.3 6? 53.46? Packing? 1 S .00? 15-39? 311.89? Exhibit 1 shows Conversion Cost Summary.~ Conversion Cost 100 unit BW-18 Months Spare Work for Other Summary Beeswax Candles Candle Production Division Present costing $ 2.097.50 $ 28.358.20 ~ $ 56,590.55 - Method 1st Proposed $ 2,519.77 - $ 39.484.18 ~ $ 78.170.18 - Costing Method Revised Proposed $ 1,434.45 + $ 18,559.74 ~ $ 37,509.25 - Costing Methode Table 3-1 Conversion Cost SummaryExhibit 3: Direct WHOM Distribution for Three MCT's Activities? "J BW-ls Beeswax Spare Candles Work for (4 Candles (per Batch for Inventory Gther Divisions Department? of 100)? (per Month]? (per Month)? Wick making? 3 hours? 122 hours? 270 hours? Wax melting? 5 hours? 108 hours? 21-5 hours? Molding? 23 hours? 446 hours? 863 hours? Custom work Packing 14 hours ? Total 50 hours 67'6 hours 1,349 hours? Exhibit 4: Deparhnerrtal Overhead Rates Based on NormalVolume? u (" Normal Volume Normal Overhead Grerhead Department? (DIE)? Goof\"? (per DLH)': Wick making? 2,500? $59,100? $23.64? Wax melting? 2,400? 51,?50? 21.56? Molding? 3,000? 369,000? 415.13? Custom work? 3,600? 110,865? 30.30? Packing? E30? 264 333? E? Total? 34,000? 855,053? 25.15? * Estimated overhead cost if each deparhnent operates at its normal volume