Handy-Man Services is a repair-service company specializing in small household j
ID: 2353273 • Letter: H
Question
Handy-Man Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The following profitability data apply to five customers.
Question 1:Compute the operating income for each of the five customers. (five points)
Question 2:What options should Handy-Man Services consider in light of the customer-profitability results? (five points)
Question 3: What problems might Handy-Man Services encounter in accurately estimating the operating costs of each customer? (five points)
Handy-Man Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The following profitability data apply to five customers. Question 1:Compute the operating income for each of the five customers. (five points) Question 2:What options should Handy-Man Services consider in light of the customer-profitability results? (five points) Question 3: What problems might Handy-Man Services encounter in accurately estimating the operating costs of each customer? (five points)Explanation / Answer
Custmer revenues
Customer costs
Operating income
marveline
330
225
75
jackson
200
305
(105)
Roger jones
80
75
5
paul
75
110
(35)
Beacky stephan
350
220
130
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Pay increased attenstion to the profitiable customers Stephan and burnett.
Seek ways of reducing costs and increasing for the loss accounts of jacksons and paul saas. Work with the customers so their behavior reduces overall costs. Reduce costs with better scheduling.
May be a different fee schedule needs to be implemented depending on the age of the house, the distance to the home.
Determine whether the operating income pattern will propably continue or not
===========================================
Basic undelaying records may not be accurate.
Some repairs personnels may be efficient and more experienced , other may be less experience and slower and still other may chit chat more twith client than others.
Costs that are allocated to more than one customer may be sdistoring operating income
Custmer revenues
Customer costs
Operating income
marveline
330
225
75
jackson
200
305
(105)
Roger jones
80
75
5
paul
75
110
(35)
Beacky stephan
350
220
130
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