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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