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Biggby Coffee is a retail and wholesale distributor of roasted coffees to customers and retail businesses. The owner of Biggby Coffee is concerned about the

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Biggby Coffee is a retail and wholesale distributor of roasted coffees to customers and retail businesses. The owner of Biggby Coffee is concerned about the profitability of the company and the profitability of certain customers and has asked you to evaluate customer profitability. You have provided the CEO with the following information: Units Revenues Customer Carstomer Customer Total 140,036 201,770 51,810 398,616 $1,225,315 $1765,488 $453,238 $3,444,140 Variable Expenses Drect Materials Direct Labor Variable Manufacturing Overhead Varble Shipping costs Variable Selling Costs $S25,135 140,036 105,027 70018 35,009 $756,618 201,770 151,328 100,885 50,443 $191,288 $1476,060 51,810 393,616 38,858 295,212 25.905 196,08 12,953 98,404 Fored Experts Fixed Manufacturing Overhead General Allocated Overhead Fixed Selling Fored Administratie 150,000 80,000 40,000 31,000 210,000 125,000 40,000 37,000 140,000 95,000 40.000 12,000 500,000 300,000 120,000 80,000 Net Income 80,000 129,425 (145,475) (15,960) The CEO upon reviewing the information above has asked you drop Customer C since they are causing Net Income to be negative. You explain to the CEO the decision is not quite that easy. You explain that all variable costs are avoidable, with the exception of Direct Labor and Variable Manufacturing Overhead which are 70% and 85% unavoidable, respectively. The Fixed Selling costs are avoidable since those cover the marketing salary for the marketing manager for Customer C. The financial Adiantara Nicadvantacolaf dronning Customer Cie

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