Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

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]
Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote