Q1
Why might an advertising agency use job costing for an advertising campaign by Pepsi, whereas a bank might use process costing to determine the cost of checking account deposits? How are these approaches similar? What importance to these results make to managers?
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Q2
The controller of a retail company has just had a $50,000 request to implement an ABC system quickly turned down. A senior VP, in rejecting the request, noted, “Given a choice, I will always prefer a $50,000 investment in improving things a customer sees or experiences, such as our shelves or store layout. How does a customer benefit by our spending $50,000 on a supposedly better accounting system?”
How would you respond to the VP? What value does ABC provide to customers, if any? What are “selling” point that should be noted about the benefits of ABC?
*** one page three references
Q3
A customer-profitability profile highlights those customers a company should drop to improve profitability.” Do you agree? Explain. Are all customers important? What other options does the organization have instead of “dropping” the customer?
*** one page three references
