Can someone help me find the correct formula and amounts for Frequent and Infreq
ID: 2509745 • Letter: C
Question
Can someone help me find the correct formula and amounts for Frequent and Infrequent Profitability? It seems they are not 12841500 for frequent and 17986500 for infrequent.
Exercise 11.11
External Linkages, Customer Costing, Customer Profitability
Required:
1. Assign the customer-related activity costs to each category of customers in proportion to the sales revenue earned by each customer type.
Calculate the profitability of each customer type. (Because sales revenues for each customer type are equal, the profitability will be the same for each customer type.)
$
2. Assign the customer-related activity costs to each customer type using activity rates. Enter the appropriate activity rates below.
Calculate the profitability of each customer category.
Sales revenue $ Customer-related activity costs $Explanation / Answer
Answer 1:
Assignment of cost based on sales revenue
Calculating Profitability
Answer 2:
Calculating Activity rate
Calculating Profitability based on activity rates:
Frequently Ordering Customers Less Frequently Ordering Customers No. of Orders 21,000 2,100 Average Order Size 2,100 21,000 No. of parts Sold 4,41,00,000 4,41,00,000 Price per part 1.05 1.05 Total Sales revenue 4,63,05,000 4,63,05,000 Assignment of Customer related activity cost 61,95,000 61,95,000 [Based on Sales Revenue]Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.