Anne Mariel Gomez & Gem Yao-Raneses

MGT 213 - WY

Date of Interview: October 12, 2021

Name of Interviewee: Evelyn Ng

Position: Accounting and Administrative Manager

Company Name: Sidamo Distribution Inc.

Location: Warehouse #6 Olivarez Compound, Juanita de Leon St., Barangay San Dionisio,
Paranaque City 1700

Business Type: Service Industry

Company Profile:

Sidamo Distribution was established in 2012 as the distribution partner of Universal Robina
Corporation (URC), FMCG products. It covers the South GMA area including Pasay, Taguig,
Pateros, Muntinlupa, Paranaque, Las Pinas. Makati, Mandaluyong, San Juan and Manila. It
caters to around 8600 stores and employs about 150 employees.

Interview Questions:

1. Does the business collect and use cost information to make decisions?

Yes, the business collects and uses cost information to make decisions.

2. Does it have a specialist in cost estimation who works with this cost data? If not, who is
responsible for the collection of cost information? Be as specific as possible.

Yes, the Accounting and Administrative Manager handles cost estimation and monitoring as well
as supervises the collection of the cost data.

3. What type of cost information does the business collect and how is each type of
information used?

The business collects two types of cost information.

❖ Predicting Cost Behavior

Variable Cost

● Utilities- include water electricity & internet bills

● Sales Commission and Allowances
● Logistics Cost
● Transportation Allowance
● Account Discounts

Sales and logistics manpower, and trucks requirement will depend on the number of
routes covered by the distributor. Each route’s break-even point is computed first before
deployment to determine profitability.

Fixed Cost

● Rent
● Salary
● Salesman Internet Plans
● Communication Allowance
 ● Employee Insurance
● Property Taxes
● Interest Expenses
● Trucks Depreciation

Rent contract has an annual increase. They need to monitor each increase, if it is still
within the budget. Same applies to salary expenses, as they are allowed an operating
expense margin of 5.5%.

Salesman Internet Plans and Communication Allowance in this case is fixed. Employees
shoulder the expense if the usage exceeded the provided allowances.

❖ Making Business Decisions

Differential Cost

Getting additional warehouse space entails additional working capital. The business has
to consider the optimal location and warehouse space to choose, in order to determine
the fastest way to recover their investment. The location must be strategically placed
within their area of coverage, so that they can limit their logistics cost.

Sunk cost

Bad Orders/ Returns from accounts/ customers. Some examples are near expiring
products & deflated product packaging, these could still be sold but at a bargain price.

4. How important does the owner/manager believe cost information is to the success of the
business?

The manager considers the cost information as vital in sustaining their business. The data
provides them an outlook on the timeline of the return on their investment. Moreover, it also
helps them monitor their financial standing to ensure that their business is profitable. Using
cost information, they can identify which expenses need to be adjusted in order to prevent
losses.