80.2K

Verified Solution

Link Copied!

provide answers to all parts

ers? Is there anyuny VHSJID 2. Of what us ability of five new customers. It buys recycled paper at $20 per case and sells to retail customers at a list 17-37 Customer profitability, distribution. Green Paper Delivery has decided to analyze the profit price of $26 por case. Data pertaining to the five customers are Customer 2 1 Try it 17-1 3 4 5 1,830 $26 $26 10 1,950 $ 26 31,200 $ 26 $25.80 16 6,780 $26 $25.20 18 5 28 4 44,500 $ 26 $24.30 35 12 $23.90 Cases sold List selling price Actual selling price Number of purchase orders Number of customer visits Number of deliveries Kilometres travelled per delivery Number of expedited deliveries 35 3. 4 12 12 65 25 35 14 8 6 45 0 0 0 w 3 Revenue Price dis Revenue Cost of g Gross me Custome Delive Order pr Sales Total cu Custom Green Paper Delivery's five activities and their cost drivers are Activity Order taking Customer visits Deliveries Product handling Expedited deliveries Cost Driver Rate $90 per purchase order $75 per customer visit $3 per delivery kilometre travelled $1.20 per case sold $250 per expedited delivery Assignn Required 1. Compute the customer-level operating income of each of the five retail customers now being examined (1,2, 3, 4, and 5). Comment on the results. 2. What insights do managers gain by reporting both the list selling price and the actual selling price for each customer? 3. What factors should managers consider in deciding whether to drop one or more of the five customers

Answer & Explanation Solved by verified expert

See Answer