Question 1
The formula for the customer profit margin is customer
◦ net profit divided by customer revenue.
◦ profit margin less allocated selling and administrative expenses.
◦ revenue divided by customer cost of goods sold.
◦ revenue less cost of goods sold less allocated selling expenses.
Question 2
Unprofitable customers should be
◦ evaluated for implications that any action will have on the customer.
◦ assessed fees to cover extra costs incurred by the company to service the customer.
◦ dropped to prevent further profit reductions.
◦ evaluated for implications that any action will have on the customer, other customers and the company.
