Report: Mr. Johnny Miller, Pedaltrain Ltd.
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[Date of Submission]
Introduction:
Pedaltrain Ltd. is a private UK company formed in 2017 by Johnny Miller. The company
manufactures a high-tech stationary exercise cycle that is favoured by high grade athletes and
serious cycling enthusiasts when they can’t get out on a real bike. The company prides itself on
producing an innovative product that is of excellent quality that enjoys a world-wide reputation
with the cycling community. The business manufactures one model of bicycle but the product
can be modified to make the most of online training apps and sessions that are now available on
an on-demand basis. The thing that sets all Pedaltrain cycles apart from the other cycles on the
market is that a small automatically generated electric shock can be delivered to the rider if their
cycling pace slows. This is a truly innovative feature that does not exist on any other cycle in the
market and is highly favored by serious riders.
In 2017, Johnny Miller was founded by Pedaltrain Ltd. They are based in a private UK company.
For those unable to ride a real bike, the pedal train produces an advanced stationary exercise
cycle preferred by high-grade athletes and serious cycling devotees. Pedaltrain takes great
satisfaction in manufacturing an innovative product of unique quality with a global reputation in
the cycling community. The company produces a single model of bicycle then the invention can
be changed to make the most of online training apps and sessions that are now accessible on an
on-demand basis. Petaltrain cycle are unique among cycling products because they automatically
generated electric shock can be delivered to the rider if their cycling pace slows. Petaltrain is an
amazing innovation and does not found any other cycle market.
The break-even point is defined as the level of sales volume or revenue at which a
business covers all its fixed and variable costs. Fixed costs are expenses that do not
change with the number of units produced or sold, such as rent and salaries.
The sales volume or revenue level at which a company covers all its fixed and
variable costs. Rent and salaries are example of fixed costs because they do not
change with the number of unit sold or produced
The margin of safety is an investment principle where the investor buys stocks when the market
price is below their actual value. It is evaluated as the change between the price of a financial
instrument and its basic value. The margin of safety acts as a built-in cushion that allows a few
losses to be incurred but protects against major losses. Investors incorporate both qualitative and
quantitative techniques to determine a safety margin that will discount the price target.
According to Margin of safety investment principle the investor should purchase stocks at a
discount to their actural value. It is estimated as the different between financial instrument price
and its base value . The margin safety guards against a few losses to be acquired but defend
beside major losses.
Pedaltrain Ltd.'s break-even point is roughly 14.016 units. With 41,365 units sold
so far, the company has a £19,120.44 margin of safety. This indicates that the
business is functioning well above its break-even point and is solvent because it
offers a strong safeguard against future swings in sales. However, maintaining this
position necessitates ongoing monitoring of costs, the mix of sales, and market
dynamics.
The analysis indicates that Pedaltrain Ltd. is in a strong financial position and has a
sizeable margin of safety. The company should monitor its spending and sales mix
in addition to seeking to further optimize workflows and lower risks.
Pedaltrain Ltd company break point is £23.310 units .The company has a margin of safety of
£19,120.44 so far the company has sold about 41,365 units. Though, maintaining this
position requires continuing monitoring of costs, the mix of sales, and market
dynamics. The company should monitor its spending and sales mix in addition to
pursuing to further improve work flows and lower risks
Activity-based costing (ABC) is a costing method that assigns overhead and indirect costs to
related products and services. This cost accounting method recognizes the relationship between
costs, overhead activities, and manufactured products, assigning indirect costs to products less
arbitrarily than traditional costing methods. However, some indirect costs—such as management
and office staff salaries—are difficult to assign to a product.
Assigns Overhead and indirect costs to related product and services method of activity based
costing. Activity based costing method knows the affiliation between costs, overhead activities,
and factory-made products, assigning indirect costs to products less randomly than old-style
costing methods. But some indirect cost Such as office staff salaries and management are
problematic to allocate to a product.
Absorption costing is linking all production costs to the cost unit to calculate a full cost per unit
of inventories. This costing method treats all production costs as costs of the product regardless
of fixed cost or variance cost. It is sometimes called the full costing method because it includes
all costs to get a cost unit. Those costs include direct costs, variable overhead costs, and fixed
overhead costs.
All production costs units to calculate a full cost per unit of inventories is linking with absorption
costs. Absorption costing method gives all manufacture costs as costs of the product regardless
of fixed cost or alteration cost. Sometimes called the full costing method because it contains all
costs to get a cost unit. Direct costs, variable overhead costs, and fixed overhead costs include in
absorption costs.
ABC can assist management in making more informed choices regarding pricing, product mix,
and process enhancements by disclosing the actual cost of each product. It can draw attention to
expensive operations that might benefit from increased efficiency. Pedaltrain Ltd. would
possibly be able to make better decisions and control costs if they switched to an ABC system,
which would provide firmer cost information. The business must, however, balance the
advantages against the complexity and implementation costs. By analytic the costs associated
with individual activities, ABC would be able to allocate overheads more precisely . This is
crucial for Pedaltrain Ltd. because different labor-intensive processes (such as welding,
assembly, and painting) and sophisticated features (such as the electric shock mechanism) have
different cost implications.
By providing management with the true cost of each product, ABC can help them make better
decisions about pricing, product mix, and process improvements. It has the potential to highlight
costly processes that could gain from more efficiency. If Pedaltrain Ltd. moved to an ABC
system, which would provide firmer cost information, they might be able to make better
decisions and control costs. But the company needs to weigh the benefits against the complexity
and implementation costs. ABC would be able to more accurately allocate overheads if it could
analyze the costs related to individual activities. For Pedaltrain Ltd., this is critical because
various labor-intensive procedures (like welding, assembly, and painting) and complex features
(like the electric shock mechanism) have varying financial ramifications.
ABC can help them making more informed choices better decisions about product mix, pricing,
and process improvements. It has the possible to highlight costly processes that could gain from
more competence. If Pedeltrain Ltd. Switched to an ABC system, they might be able to make
better decision and control costs. But the company wants to consider the benefits against the
difficulty and implementation costs. ABC would be able to more correctly allocate overheads if
it could evaluate the costs related to individual activities. For Pedaltrain Ltd., this is critical
because several labor-intensive procedures (like welding, assembly, and painting) and complex
features (like the electric shock mechanism) have fluctuating financial complications.
To make goals easier to meet, managers may overestimate costs or underestimate revenues.
Since actual performance might be better than reported, this leeway can result in inefficiencies
and a lack of cost control. Pedaltrain Ltd. currently employs an incremental budgeting process in
which changes are made to the budget for each period based on the previous period's budget to
account for anticipated changes in operations, inflation, and other factors. This approach is
straightforward and easy to use, but it has a number of disadvantages, particularly in a dynamic
setting like Pedaltrain's where efficiency and innovation are essential for preserving a
competitive edge. When cost reductions are enforced without taking the practical ramifications
into account, incremental budgeting has the potential to demotivate workers. Every year budget
cuts made without consulting managers or staff members can cause annoyance and a feeling of
disengagement. There is little reason for departments to innovate or come up with new cost-
saving strategies because the budget is based on data from prior years. This may cause
inefficiencies to persist year after year. Since all costs must be justified, ZBB can eliminate
budgetary slack and encourage efficiency and cost control. Additionally, it can spur managers to
evaluate their processes more closely, which can result in improvements and innovation
Managers may overvalue expenses or underestimate revenues in order to make goals easier to
meet. This margin can lead to disorganizations and a lack of cost control because actual
performance may be better than reported. Pedaltrain Ltd. currently uses an incremental budgeting
process, meaning that adjustments are made to the budget for each period based on the budget
from the previous period to take into thought factors like inflation and expected changes in
operations. While this strategy is simple and easy to implement, it has several drawbacks,
especially in a dynamic environment like Pedaltrain's where maintaining a competitive
advantage depends on efficiency and innovation. Incremental budgeting may demotivate
employees when cost decreases are obligatory without considering the real-world effects. Annual
Budget
Pedaltrain competes in a market dominated by major players like Peloton and NordicTrack, who
provide cutting-edge features at different price points. Although Pedaltrain stands out due to its
exclusive electric shock feature, competitors may compete on price, reputation, or extra features,
which could affect how much a customer thinks Pedaltrain is worth. Presently, Pedaltrain Ltd.
offers two models of its advanced stationary exercise bike for sale: Unmodified Cycle: £1,500 in
price. The cost of the modified cycle (with additional connectivity) is £2,[Link] of its
unique feature of an automatically generated electric shock to maintain cycling pace, which
applications to serious cyclists and athletes who value quality and innovation, Pedaltrain is
positioned as a premium brand in the market by these prices.
Key players like Peloton and NordicTrack, who offer innovative features at various price points,
dominate the market in which Pedaltrain participates. Pedaltrain's unique electric shock feature
makes it stand out from the competition, but competitors may compete on price, reputation, or
additional features, which could inspiration a customer's opinion of Pedaltrain's value. Pedaltrain
Ltd. currently sells two models of its innovative stationary exercise bike: Unmodified Cycle:
Cost £1,500. The updated cycle costs £2,000 in total. Pedaltrain is positioned as a premium
brand in the market by these prices because of its unique feature of an automatically generated
electric shock to maintain cycling pace, which applications to serious cyclists and athletes who
value quality and innovation.
Financial performance metrics, including sales growth, ROI, and profit margins, are often
employed to assess a business's performance. Still, depending just on these measurements can
come with a number of drawbacks. Financial measures frequently prioritize short-term
outcomes, which may cause them to make poor decisions regarding sustainability over the long
run . Financial metrics are considered lagging indicators, meaning they might not accurately
represent past performance or future prospects.
Alternative Non-Financial Measures
Net Promoter Scores (NPS) and reviews can offer valuable information about customer
satisfaction and loyalty, which is important for a high-end brand like Pedaltrain. Monitoring
employee motivation is essential for protective quality and innovation. Frequent surveys and
feedback can help. It is possible to make sure that the cycles live up to the high expectations of
customers by monitoring warranty claims, product returns, and quality control metrics.
Pedaltrain can maintain its competitive edge by keeping an eye on the creation and release of
new features or models.
Padeltrains performance is regularly evaluated using financial performance measures, such as
profit margins, ROI, and sales growth. However, there are a number of disadvantages to depend
on only on these measurements. Financial metrics usually give importance to immediate results,
which could lead to bad long-term sustainability decisions. Meanwhile financial metrics are
cover indicators, it's possible that they won't exactly reflect past performance or potential in the
future.
Other Non-Financial Indicators
Evaluations and Net Promoter Scores (NPS) may provide aware data regarding client loyalty and
satisfaction, which is critical for a luxury brand such as Pedaltrain. For innovation and protective
quality, keeping an eye on worker motivation is vital. Regular feedback and surveys can be
beneficial. It is possible to assurance that the cycles meet the high standards.
