Managerial Decision Case
Bill Lewis, manager of the Thomas Electronics Division, called a meeting with his controller, Brindon Peterson, CMA, and his marketing manager, Patty Fritz. The following is a transcript of the conversation that took place during the meeting.
“Brindon, the variable-costing system that you developed has proved to be a big plus for our division. Our success in winning bids has increased, and as a result, our revenues have increased by 25 percent, However , if we intend to meet this year’s profit targets, we are going to need something extra-am I right, Patty?”
Patty: “Absolutely. While we have been able to win more bids, we still are losing too many, particularly to our major competitor, Kilborn Electronics. If I knew more about their bidding strategy, I think we could be more successful in competing with them.”
Bill: Would knowing their variable costs help?”