ACC 613 - Profit Planning and Control
For each of the following, prepare a one-page, single-spaced, 12-point font, 1-inch margin page response. (Two pages total for both A and B)
A. Your manager comes to you and says, "I don't understand why everyone is talking about the total-life-cycle costing approach to product costing. As far as I'm concerned, this new approach is a waste of time and energy. I think we should just stick to what we know, and that is the traditional approach to product costing."
Critique your manager's view by discussing at least three benefits of adapting the total-life-cycle approach.
B. Consider a company that sells prescription drugs. It has salespeople who visit doctors and hospitals to encourage physicians to prescribe its drugs. The company sells to drugstores. Salespeople are paid a salary plus a bonus if actual sales exceed planned sales. To plan operations, this company needs to develop estimates of total sales. Where should it get this information?