Quality Dairy Case.

This case examines an actual dairy's pricing decision for a sizeable order from a major customer. The purpose is to encourage students to consider the complexities of pricing decisions and the role of managerial accounting information in these decisions. Specific managerial accounting concepts addressed include product costing, selection of an appropriate allocation base, accounting for opportunity costs, relevant or incremental analysis, strategic cost management, and activity-based costing. The case highlights the importance of designing an appropriate costing system to support strategic pricing and product mix decisions by demonstrating how poor cost information can encourage decisions that run contrary to a firm's strategy.