Solved

Mini Case 15- 1

question 46

Multiple Choice

Mini Case 15- 1
Aspirin is so potent that many in the health professions contend that if it were invented today, it would be only available by prescription. In 1897, Felix Hoffman chemically concocted the first synthetic aspirin compound, known as acetylsalicylic acid. At the time he was working for the Bayer Company. In 1899, Bayer Aspirin was introduced. It was the first tablet ever to be marketed as a water- soluble pill. Fifty billion aspirins are consumed worldwide annually. A variety of painkillers line the store shelves today, but only aspirin has been subject to rigourous scientific testing that shows it has long- term cardiovascular and anti- cancer benefits. In spite of these positive aspects, a particular concern is that aspirin might contribute to the very rare Reye's Syndrome in children, a disease that affects the brain and liver, has led to aspirin having an identity crisis. There is a generation of individuals who have grown up assuming other drugs have completely replaced aspirin. Ask someone for an aspirin these days, and you're likely to receive a Panadol or any other brand of pain killer. Aspirin manufacturers are trying to educate people that simple aspirin, especially when taken in low dosages, can have important preventive health benefits.
-Refer to Mini Case 15- 1. What type of communication should the aspirin industry use if its goal is to promote the benefits of aspirin in a manner that the public perceive the message to be news rather than manufacturer- sponsored messages?

Definitions:

Factory Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and salaries of non-direct labor, which are not directly attributed to the production of goods.

Variable Factory Overhead

Costs in the manufacturing process that fluctuate with production volume, such as materials and labor directly involved in production.

Controllable Variance

The difference between actual costs and budgeted costs that a manager has direct control over in a given period.

Favorable Volume Variances

Differences between the expected volume of production or sales and the actual volume that lead to lower costs or higher profits than planned.