Lygon Food Distributors (LFD) hired a consultant to update its system for reporting the cost of customers.
Question:
Lygon Food Distributors (LFD) hired a consultant to update its system for reporting the cost of customers. The consultant showed Anjana Malik, the owner of LFD, an analysis that indicates that customer support costs are significantly higher for customers who order on weekends than for those who order during the week.
Required
a. What pricing decisions might LFD make based on the consultant’s information?
b. Would these be ethical? Why or why not?
c. The consultant comes back to Anjana’s office and explains that he made a mistake in the analysis. The relation is actually between cost of customer support and the customer’s gender. Does this affect your answers to requirements (a) and (b)?
Step by Step Answer:
Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher