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Every case has a problem, issue or opportunity to be identified. What is it for this case and who needs to make it? Cortland Manufacturing

Every case has a problem, issue or opportunity to be identified. What is it for this case and who needs to make it?

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Cortland Manufacturing Company We constantly seem to be pricing ourselves out of some markets and not charging enough in others. Our pricing policy is pretty simple: we mark up our full costs by 50%, so, for example. a computer that costs us $2,000 to make would sell for $3,000. Until today, I thought this was a workable approach, but now I'm not so sure. The speaker was Steve Works, CEO of Cortland Manufacturing, Inc. (CMI), who had just been told by his accountant that, with revised overhead allocations, his computers might be priced inappropriately. He continued: When I was at LBS [Leland Business School]. I focused most of my attention on operations and marketing. I was convinced that they were the keys to a successful career. Cost accounting was always a drag, but now I've got my accountant telling me that I need to think about a different way to assign manufacturing overhead to products, and I don't even know where to start, I never dreamed that some day my career would come to this! BACKGROUND CMI manufactured several different models of computers that it sold directly to hospitals and health systems Fanshawe College until Apr 23, 2022 in all 50 states of the United States. The company prided itself on the user-friendly nature of its computers, and in particular on the ability of computers to facilitate graphical presentations. It was superb graphics that CMI UonejoA 14Budco e claimed distinguished its computers from those of its competitors. Hospitals located the computers at nursing stations, and both nurses and physicians had found them invaluable to obtaining patient-related information on a

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