Case Study: Herbaline Facial Spa

Introduction

HerbaLine Facial Spa is a beauty house that never discontinues to make innovations and growth from year 1994. (Refer to figure 1) This company was founded in the capital of Malaysia which is Kuala Lumpur. It was set up in 1994 and was initially operated by a couple who are Mr. and Mrs. Low. (HerbaLine, 2016)

In the beginning, Low couple started their business from a mini beauty salon just with the measuring of 200 squares feet. (Refer to figure 2) However, through their hard work and persistent efforts, this mini beauty salon was started to expand within a year. (HerbaLine, 2016)

After a few years, HerbaLine Facial Spa began to solicit other beauty centers to join them. HerbaLine beauty products were officially born in 2000

The estimated hourly work rate is RM 8.60 per hour. For instance, labor cost employees of HerbaLine taken 4 hours in weekdays and taken 3 hours in weekend respectively to provide the treatment. The estimated cost allocation will be RM 301.
In addition, the estimated square feet of HerbaLine company is 3000 square feet. The total rental expenses are RM10,000 per month. The cost of per square feet is RM 3.33. We assumed HerbaLine company take 1000 square feet to carry out the butterfly threading treatment. So, the estimated cost allocation of 1000 square feet is RM 111.11 per day.
Moreover, the estimated useful life time for the spa bed and facial chair is 10 years while the total book value is RM 27,000. Total each year of depreciation is Rm2,700 and each month is RM 225. For instance, the furniture hour used by HerbaLine during the weekdays will be 4 hours out of 10 hours per day will be RM 90 while during the weekend will be 3 hours out of 9 hours per day will be RM75. The estimated total cost allocation is RM

In manufacturing industry, normally they produce homogenous products and the cost can be defined easily. The price of the homogenous products is fixed and sell it in standard price to the customer. HerbaLine also selling the facial products to the customers, the price of the products is reasonably and affordable by customer. So, the cost unit to measure the product is standardize and define accurately. While for the service industry, it is very hard to define the cost unit as the same service is provided to customer but different cost unit is occurred. The price of the service is same to every customer but it changes depends on the different situation. For instance, HerbaLine provide the butterfly threading treatment and the cost is fixed but it changes differently due to the condition of the customer. If the face of the customer consists many acne, employees of HerbaLine may take a longer time to carry out the