Review Exhibit 4-5 and the preceding discussion. a. Does the cost-driver rate for activity 1.1 have the

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Review Exhibit 4-5 and the preceding discussion.

a. Does the cost-driver rate for activity 1.1 have the same meaning as the one for activity 2.1? Explain.

b. Suppose that you are PMI’s CEO and decide to stop providing warehousing services for customers. Would PMI really save the $2,000 per month for activity 4.22 Why or why not?

c. What other factors would you consider in deciding whether to stop providing warehousing services?

(Solutions begin on page 166.)

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Cost Management Strategies For Business Decisions

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Authors: Ronald Hilton, Michael Maher, Frank Selto

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Review Exhibit 4-5 and the preceding discussion. a. Does the cost-driver rate for activity 1.1 have the

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Cost Management Strategies For Business Decisions

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