Author Question: Assume you are a sales manager responsible for analyzing the profitability of the customers in your ... (Read 273 times)

awgagawg · **on:** Feb 5, 2023

Question 1

Georgia Manufacturing Company has provided the following information for calculating cost pool rates for selling activities:

Activity

Annual Cost

Annual Driver Activity

Sales calls	$300,000	6,000 sales orders
Packing and shipping	450,000	5,000 orders
Support call center	60,000	60,000 minutes
Product returns	20,000	400 returns
Product training	40,000	100 training sessions

Required:

Calculate the activity cost pool rate for each selling activity.

Question 2

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory. You have gathered the following information on one of your customers:

Sales		$400,000
Cost of goods sold		320,000
Selling costs:
In-person sales calls	50 @ $100 each	5,000
Phone orders	500 @$20 each	10,000
Shipping	12,000 @ $2 each	24,000
Express shipping	100 @ $50 each	5,000
Administrative costs:
Office supplies	Amount allocated to customer	500
Office salaries	Amount allocated to customer	600

Required:

a.	Calculate the customer net profit.

b.	Calculate the customer profit margin.

ElaneShive · **Reply #1 on:** Feb 5, 2023

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