Posted: December 28th, 2015

What information might the accounting staff provide to enable this work group to make the necessary decisions and to justify their costs to higher management

CONTROLLING SALES EXPENSES Faced with a need to justify their sales expenses, the sales staff of the western division of Bluefern Auto Accessories met their manager, Pauline Vandeloo, to examine the recent cost reports sent to them by the accounting department. The reports provided general sales expense figures according to geographical territory.   One team member said that there was a variety of customers in each region, including commercial users and local retailers. Another team member commented that the time that had to be spent with customers varied according to the nature of the customer.   Pauline was concerned that the current figures did not fit the needs of the current sales team’s activities. It was not clear what the current figures meant for the division’s future decisions. There was no scope to determine who were the key customers – the 20% or so of customers who contributed 80% of the division’s business. • What information might the accounting staff provide to enable this work group to make the necessary decisions and to justify their costs to higher management? • What might be the appropriate headings for a cost report for this division?