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GMIPService, a service company, provides two different types of services. Service A, which requires minimal sales effort and Service B, which is still not very well known in the market As expected, Service B consumes a lot of time from the sales representatives Instead of allocating an equal amount of sales expenses to each one of the products, the company can use estimation techniques to map out accurately this cost to the individual services. Sales expenses include the representatives’ salaries, phone and Internet time, and some travel to selected potential customers. There is also a great amount of time spent preparing the presentations and materials to show to individual clients, since there is always an attempt to customize them to the client’s potential use of the service. The expenses are shown in the following list Sales representatives salaries 140,000 Phone and Internet 4,000 20,000 Travel expenses 10,000 Presentations materials and equipment The following activity information is also available: Service A Service B Number of sales appointments 40 75 Number of follow-up calls 125 20 Estimated of effort 25% 75% Number of presentations 10 30 TL300,000 TL Volume of sales 00.000 100 Number of finalized sales 500 The company wants to know whether it is pricing Service B correctly? a) Use ABC to arrive a recommendation regarding ABC b) What is the cost of delivering each of the services?

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