Paula is evaluating options for her salespeople to connect with physicians working at clinics to promote key
Question:
Paula is evaluating options for her salespeople to connect with physicians working at clinics to promote key pharmaceutical products. In the past, they always went to the clinics and set up displays in a conference room so they could have a few moments of face-to-face time with the physicians. She is considering a less costly approach where the sales reps would videoconference with the physicians instead. Some of the costs she gathered are listed below. Classify each cost as relevant or irrelevant for this decision.
(a) Lunch provided for the physicians (lunch will be provided whether in person or remote).
(b) Travel costs for salespeople to/from clinics.
(c) Cost of salespeople's time (their compensation is a base salary plus commission on sales).
(d) Cost of shipping sample products to the clinics if the salespeople remain remote.
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young