Report on Management Accounting in Organization
8 Pages1514 Words123 Views
Added on 2020-04-21
Report on Management Accounting in Organization
Added on 2020-04-21
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MANAGEMENTACCOUNTING
TABLE OF CONTENTSWhat are the services rendered by the distributor to manufacturers and hospitals?..............1How has the nature of distribution changed over time?.........................................................1What is the value-added by O&M?........................................................................................1Evaluate the impact cost-plus pricing has on distributors, customers and suppliers..............2What effect will ABP have on customer behaviour?.............................................................2Explain Exhibit 5. How does the pricing matrix work?.........................................................2How do the costs in Exhibit 5 correspond to the costs shown in the customer profitability statement in Exhibit 4?...........................................................................................................3Why doesn’t the matrix comprise all the costs shown in Exhibit 4?......................................3What are the obstacles to successful implementation of ABP at Ideal? How would you address these obstacles?.........................................................................................................3What type of customer will adopt ABP first?........................................................................3How difficult or easy is it for O&M’s rivals to adopt ABP?..................................................3What are the risks associated with ABP for Owens & Minor?..............................................3Work through the Owens and Minor numerical example posted on Blackboard by filling in the template provided.............................................................................................................4REFERENCES...........................................................................................................................5
What are the services rendered by the distributor to manufacturers and hospitals?There are various services offered by distributors to both the parties such asmanufacturers and hospitals to retain these parties in growing their business. There are twohospitals in the current case are Alpha and beta hospital to which the distributor will provideall the services to steal the attention of all the external users. Different services offer by thedistributor includes procurement services which come under the logistics segment of anentity. Logistic and supply department of the business concern plays a significant role in anentity to deliver all the quality oriented services to retain most of the customers with the firmfor long span of time. Procurement service provided by the distributor includes warehousingfor storing all the products sold by the distributor to the firm. Procurement costs incurred byan entity can get reduces by using just in time method in which distributor can deliver theproduct directly to the customers without storing in the warehouses which, in turn, saves themoney of an entity.Another services offered by the distributor to the manufacturer and hospital is label alltheir medical products to reflect the hospital name and pharmaceutical firm’s names on theproducts. With the help of labels on the products, an individual can use the medicine ormedical equipment by following the instructions mention on the label along with the expirydate of the product. How has the nature of distribution changed over time?Both the hospital Alpha and beta hospital has similar business operation as theychanged their performance evaluation method from customer profitability statement toactivity based pricing approach. Basic difference among both these technique is that marginhas decided in customer profitability on the basis of total costs but in activity based, marginhas decided on the distributor discounts.1What is the value-added by O&M?ParticularsAlphaBetaNew AlphaNew betaNet income$-4,222-$17608.575-$16773.2-$21669.33Sales150000150000150000300000Value added-2.81%-11.73%-11.18%-7.22%1Gao, J. H. and et.al., 2017.1
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