The management of Almarai

Your team has been invited by the management of Almarai to present an overview of the issues facing the company. You are required to write a report to the management of ALMARAI, addressing the issues shown below. The report should be no more than 6 pages (excluding the title page, cover page, reference list, and appendices). A. The management of ALMARAI are concerned about the relevance of its current costing and billing systems: 1. Write an executive summary to highlight the main themes indicated in ALMARAI case. (10% of the project marks) 2. Describe the main features of the current costing and billing systems used by ALMARAI? Your answer should include the weaknesses of the current costing system. (10% of the project marks) 2 B. The management of ALMARAI notes that cost accuracy is crucial for product pricing and customer retainment. You have been asked to address the following issues in your report: 1. Use the information in the case, including Exhibit 1 and 2 and any other necessary data on activities and costs to propose a more relevant costing system for ALMARAI. Use the costing system you have proposed to allocate ALMARAIâ€s overhead costs. (25% of the project marks) 2. Explain the differences in the assumptions between ALMARAIâ€s current costing system and the costing system you have recommended in (B.1) above. (10% of the project marks) 3. Use the costing system information calculated in (B.1) above to estimate customer profitability for LuLu, Carrefour, Almira and convenient stores. (15% of the project marks) 4. Compare the costs and profit per customer you have calculated using your recommended costing system (B.3) and the estimated costs using ALMARAIâ€s current costing system: a. What causes the two costing systems to provide different cost estimates? (10% of the project marks) C. Which costing system provides management of ALMARAI with better information? Why? Drawing on your answers on (B) above: a. What are the strategic implications of your analysis? Your answer should include your recommendations to the management regarding the companyâ€s costing systems and pricing policy AND any tactical and strategic approaches that they should adopt in order to enhance the company performance, retain customers and remain competitive. (20% of the project marks)

Sample Solution
The management of Almarai

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