Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 22

Outsourcing; Choice of Strategic Business Unit The management of office printing, duplicating, filing, and overall document storage is one of the most significant overhead costs in many companies, especially companies with large and complex product lines and/or a diverse customer base, such as the large consumer products company, Procter Gamble (P G). Increasingly, companies like P G are outsourcing their overall document management activity to service providers such as Xerox, Hewlett-Packard (HP), or Canon. Xerox and HP provide the equipment, materials, and labor for the activity in what is often called "managed print services" (MPS). MPS has reduced P G's costs significantly and also provides P G an opportunity to better focus its efforts on strategic marketing and operational matters.
Required
1. What type of SBU was probably used by P G to manage print services prior to outsourcing What type of responsibility accounting is probably being used by P G now, after outsourcing Explain briefly.
2. How would the decision to outsource print services affect the sustainability objectives of a firm such as Procter Gamble