DOI

10.2308/iace-51854

Abstract

Based on an actual situation, this case explores the use of management accounting analysis in a difficult make-or-buy decision in the real world of humanitarian aid. An aid organization produces a specially designed, highly nutritious peanut butter medicine to save the lives of Haiti’s malnourished children. The challenge is deciding whether to source the peanuts from Haitian farmers and pay more or from foreign suppliers and pay less. Students perform both quantitative and qualitative cost-benefit, break-even, operating leverage, and product costing analysis. Performance measurement, incentive issues, short-term versus long-term thinking, micro and macroeconomics, and ethical issues are also considered. The case is best suited for cost accounting and managerial (particularly MBA managerial) accounting courses.

Document Type

Post-print Article

Publication Date

2018

Publisher Statement

Copyright © 2018. American Accounting Association. Article first published online: 01 JUL 2017.

DOI: 10.2308/iace-51854.

The definitive version is available at: https://meridian.allenpress.com/iae/article-abstract/33/1/17/73348/Can-Management-Accounting-Help-Aid-Associations?redirectedFrom=fulltext.

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