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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Customer Value, Strategic Positioning

Adriana Alvarado has decided to purchase a personal computer. She has narrowed the choices to two: Drantex and Confiar. Both brands have the same processing speed, 6.4 gigabytes of hard-disk capacity, two USB ports, and a DVDRW drive, and each comes with the same basic software support package. Both come from mail-order companies with good reputations. The selling price for each is identical. After some review, Adriana discovers that the cost of operating and maintaining Drantex over a 3-year period is estimated to be $300. For Confiar, the operating and maintenance cost is $600. The sales agent for Drantex emphasized the lower operating and maintenance costs. The agent for Confiar, however, emphasized the service reputation of the product and the faster delivery time (Confiar can be purchased and delivered 1 week sooner than Drantex). Based on all the information, Adriana has decided to buy Confiar.

Required:

  1. 1. What is the total product purchased by Adriana?
  2. 2. CONCEPTUAL CONNECTION How does the strategic positioning differ for the two companies?
  3. 3. CONCEPTUAL CONNECTION When asked why she decided to buy Confiar, Adriana responded, “I think that Confiar offers more value than Drantex.” What are the possible sources of this greater value ? What implications does this have for the managerial accounting information system?
  4. 4. CONCEPTUAL CONNECTION Suppose that Adriana’s decision was prompted mostly by the desire to receive the computer quickly. Informed that it was losing sales because of the longer time to produce and deliver its products, the management of the company producing Drantex decided to improve delivery performance by improving its internal processes. These improvements decreased the number of defective units and the time required to produce its product. Consequently, delivery time and costs both decreased, and the company was able to lower its prices on Drantex. Explain how these actions translate into strengthening the competitive position of the Drantex PC relative to the Confiar PC. Also discuss the implications for the managerial accounting information system.

1.

To determine

Identify the total product purchased by AD.

Explanation

Customer Value:

Customer value is the ratio between the supposed benefits of customer and the resources which is used to obtain these benefits. Customer value includes the tangible benefits as well as intangible benefits...

2.

To determine

State the difference between the strategic positioning of two companies.

3.

To determine

Explain the possible sources of the greater value that are offered by Company CO and also implication of this greater value on managerial accounting.

4.

To determine

Explain the actions that translate into strengthening the competitive position of the Company DR as compared to the Company CO. Also, explain the implications on the managerial accounting information.

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