Posted: December 3rd, 2022

Case Presentations: A Votre Sante : Midwest Office Product Based on the intervie

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Case Presentations: A Votre Sante : Midwest Office Product
Based on the interviews and data in the case, you may estimate:
The cost of processing cartons through the facility
The cost of entering electronic and manual customer orders
The cost of shipping cartons on commercial carriers
The cost per hour for desktop deliveries
Using this cost driver information, calculate the Cost and Profitability of the 5 orders in Exhibit 2. You may compare these costs and profitability to those calculated by Midwest’s existing costing system, what does it tell you?
Try to explain the difference in profitability of the 5 orders calculated by ABC and by the existing cost system.
Based on the above analysis, what actions should Someone take, in your opinion, to improve Midwest’s profitability?
The last I can think of to stimulate your thinking might be what issues, barriers, concerns arise in your organization (if any of you has had the experience) for building an ABC model that calculates the cost and profitability of services/products?

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