You are an account manager at Owens & Minor. You have two customers on a stockless program.
Question:
You are an account manager at Owens & Minor. You have two customers on a stockless program. Below are each customer's activity levels, activity rates, and customer level costs. See Alpha HospitalCustomer Profitability Statement (Exhibit 4 of the case). Draft a customer profitability statement for Beta Hospital using the format shown in Exhibit 4.
2. It is one year later. Both your customers switched to activity-based pricing nine months ago. You charge each customer what it costs you to provide service, making margin only on distributor discounts. Draft new customer profitability statements for both Alpha Hospital and Beta Hospital using the new activity drivers shown below. What is the cost-plus equivalent of the activity fee each customer is charged? Explain why each customer responded differently to activity-based pricing.
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston