Customer profitability analysis CLICK HERE TO REVIEW LEARNING OBJECTIVES ASSIC Q

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Customer profitability analysis

CLICK HERE TO REVIEW LEARNING OBJECTIVES ASSIC QUESTION 5 Not complete Points out of 10.00 lag question Customer Profitability Analysis Hystandard Services, Inc. provides residentia for determining the costs for completing each job. The job cost system does not capture any cost i homeowner occupies the home. HyStandard required after the homes HyStandard owner has observed that the substantially differe been gathered: al painting services for three home building companies. Alpine, Blue Ridge, and Pineola, and it uses a job costing system paints each house on a square footage contract price, which includes painting as well as all refinishes and touchups ilders, however, require substantially different levels of support following the completion of jobs. The following data have Finish a ncurred by HyStandard for return touchups and refinishes after the are occupied. Each year, the company generates about one-third of its total revenues and gross profits from each of the three builders. The Support activity Major refinishes Touchups Communication Driver Hours on jobs Number of visits Number of calls Cost per Driver Unit $60 100 40 Builder Major Refinishes Touchups Communication 80 35 42 150 110 115 360 205 190 Biue Ridge Pineola Assuming that each of the three customers produces gross profits of $100.000. calculate the profitability from each builder after taking into account the support activity required for each builder Activity Alpine

Explanation / Answer

Activity Alpine Blue Ridge Pincola Refinishes 4800 2100 2520 Touchups 15000 11000 11500 Communication 14400 8200 7600 Total support costs 34200 21300 21620 Gross Profit 100000 100000 100000 Customer Profits 65800 78700 78380

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