Question : 81) _____________ 82) Bob’s Appliances manufactures industrial Dryers and Washers. During February the : 1196113

 

81)

_____________

82)

Bob’s Appliances manufactures industrial Dryers and Washers. During February the following data are available:

 

DryersWashers

Actual units sold

10,00040,000

Budgeted sales

8,82033,180

Actual selling price

$700$900

Budgeted selling price

 

 

 

 

$710$930

Budgeted market share

 

25%24%

Actual market share

 

20%19%

Budgeted sales mix

 

51%49%

Actual sales mix

 

49%51%

Budget cont. margin /unit

 

 

$275$375

 

Required:

 

Determine the market-size variance and the sales-mix variance. 82)

_____________

83)

Harry’s Electronics manufactures electronic parts. Data for two of the company’s customers is as follows:

 

 

 

 

Customer 1Customer 2

Revenues at list price

 

 

$220,000$220,000

Units sold

40,00050,000

Unit list price

$5.50$4.40

Cost of goods per unit

 

 

 

$2.00$2.00

Net revenues

200,000190,000

Customer-specific costs

Order-taking

$ 1,800$2,250

Product-handling

$14,000$17,500

Delivery

$ 4,200$5,250

 

Required:

 

Prepare a Customer-Profitability Analysis. 83)

_____________

84)

Clarke Industries collects information on two customers for 2007:

 

                                                        Langley                                          Soldar

                                                        Supply                                         

 Inc.

 

Revenues                                          $1,492,000                            $640,000

Cost of goods sold                            $1,164,000                            $486,000

Number of in-stock orders                                          14                                          4

Number of out-of-stock orders                            12                           

 

 

24

 

Clarke estimates the following activity-based costs:

Cost of processing and delivering an in-stock order                            $1,200

Cost of processing and delivering an out-of-stock order              $3,500

 

An in-stock order is an order for which all the items included are in inventory at the time the order is received.

 

Required:

Compute the customer specific contribution of each customer for 2007 using;

a.

16% of revenues as the allocation rate for customer-related costs.

b.

The activity based costing approach. 84)

_____________

85)

Each division manager for a paint manufacturer is provided with reviewing their customer profitability analysis for their six largest customers for the past year. The managers use the analysis to determine how best to allocate the company’s resources within their division, and when a customer is a ‘loss customer’, that customer is dropped.

 

Required:

 

Advise (briefly) the managers on their strategy, in terms of improving the bottom line of their respective divisions. Include at least three points in your answer. 85)

_____________

86)

The data for a paint manufacturing company for February 20×1 are as follows;

 

Customer-

LitresListspecific

SoldPriceCosts

Customer 150,000$9.00$20,000

Customer 255,000$9.00$20,000

Customer 320,000$9.00$9,000

Customer 415,000$9.00$4,000

Customer 540,000$9.00$19,000

 

Price discount policy:

$0.25 discount per gallon in excess of 20,000 gallons (up to 40,000)

$0.35 discount per gallon in excess of 40,000 gallons

 

Required:

 

Prepare a report showing the customer-specific contribution as a percentage of customer revenue. Include the price discounts in customer revenue. 86)

_____________

 

 

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