Jackson's Dog Food Ltd manufacturers an extensive range of high-quality food for dogs. The company is managed by Jason Jackson and employs 15 people. It has annual sales averaging approximately $10 million. Although it has been consistently profitable, Jackson's Dog Food Ltd has experienced increasing pressure from competitors in recent years. The company uses a cost-plus approach to pricing but is having to reduce its mark-up constantly to maintain market share. Jason's background is in engineering. The business has never employed an accountant. Instead, a bookkeeper calculates monthly profit as sales revenue minus expenses. Prices are based on rough estimates of the cost of direct material and direct labour inputs plus a 50% mark- up. With the decline in profit and constant pressure on prices, Jason began to feel uneasy about the way costs and profits were calculated. The results for the month ending 29 February 2024 were: Jackson's Dog Food Ltd Profit for the month ending February 2024 Sales Less Expenses: Materials purchased Factory wages - production line Production line supervisor's salary Premises Council rates Sales and admin staff salaries Advertising Equipment depreciation (incl. the Truck) Electricity Manager's Salary (Jason) Truck lease Net profit 980,000 $$ 300,000 250,000 35,000