Prepare the customer profitability graph and profile

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Reference no: EM131793618

Assignment

Assume the following activity based system information :

Customer related activities

Cost driver base

Cost driver rate

Customer 1

Customer 2

Sales Activity

Sales visits

1000

8 visits

6 visits

Order Taking

Purchase Order

200

15 orders

20 orders

Special handling

Units Handled

50

800 units handled

600 units handled

Special shipping

Shipments

500

18 shipments

20 shipments


Customer 1

Customer 2

Sales Revenue

190,000

123,000

COGS

80,000

62,000

General selling costs

24,000

18,000

General administrative costs

19,000

16,000

Operating Income

67,000

27,000

Prepare the customer flexibility analysis for customers 1 and 2

Additional information for six other customers as follow:


Customer 3

Customer 4

Customer 5

Customer 6

Customer 7

Customer 8

Operating income

71,000

-18,000

60,000

42,000

93,000

6,000

Prepare the customer profitability graph

Prepare the customer profitability profile

Comment on the result

Reference no: EM131793618

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