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Analyze the relative profitability of trudeauz and scheery

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Reference no: EM132585813

We Trust Me Ltd. is reviewing two of its customers using ABC analysis. It has identified the following customer related activities and their rates:

Activity                       Cost Driver                            Rate

Sales                          # of visits                     $450

Order processing            # of orders                  $125

Product handling             # of units                   $12

Special shipping               # of shipments            $500

The company has the following information regarding Trudeauz Ltd. and Scheery Inc.:

Activity              Trudeauz Ltd.             Scheery Inc.

# of visits                     9                    6

# of orders                   18                 24

Product handling             650                 380

Special shipping                 15                30

  • Sales for Trudeauz and Scheeryare $280,000 and $148,000 respectively. The cost of goods sold on these sales are the same at 52%.

Required:

Question 1: Using Customer ABC Analysis, analyze the relative profitability of Trudeauz and Scheery. This requires full analysis including summary

Reference no: EM132585813

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