Abstract
In the year 2000, a group of veterinary practitioners got together and formed a company called ?Petvets Ltd.' This Company is composed of fifteen separate practices in various locations and is mainly concentrated on the treatment of household pets. Further, this company has also established a central hospital and a small research department. Each practice is operational using the ?one-stop' approach. The meaning of this ?one-stop' approach is that each practice will sell all pet products (food and medicines) and in most scenarios at the same price (avoiding any kind of ambiguity in prices). It is to be noted that product costs are vital and Petvets Ltd is no different from other service companies in ensuring to maintain authenticity with its accounting practices and win the goodwill of its customers. To elaborate on product costs and its advantages, we have laid down some of the main advantages of product costs. Firstly, allocating the manufacturing costs incurred during a period between cost of goods sold and inventories fulfills the financial accounting requirements. Secondly, product costs are important to provide useful information for managerial decision making requirements. A significant point is that decision making product costs are required to help distinguish between profitable and unprofitable products.
