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Bryan Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Bryan commented, We apply ABC to determine product-line profitability. The
Bryan Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Bryan commented, "We apply ABC to determine product-line profitability. The same ideas apply to customer profitability, and we should find out our customer profitability as well." Bryan Wholesalers sends catalogs to corporate purchasing departments on a monthly basis. The customers are entitled to return unsold merchandise within a six-month period from the purchase date and receive a full purchase price refund. The following data were collected about the costs associated with the customer and specific on each customer. The customers pay all transportation costs. The cost of goods sold averages 75% of sales. Required 1. Provide an ABC analysis for the company. (4 marks) 2. Determine the contribution to profit from each customer last year. Comment on your solution. (14 marks) Bryan Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Bryan commented, "We apply ABC to determine product-line profitability. The same ideas apply to customer profitability, and we should find out our customer profitability as well." Bryan Wholesalers sends catalogs to corporate purchasing departments on a monthly basis. The customers are entitled to return unsold merchandise within a six-month period from the purchase date and receive a full purchase price refund. The following data were collected about the costs associated with the customer and specific on each customer. The customers pay all transportation costs. The cost of goods sold averages 75% of sales. Required 1. Provide an ABC analysis for the company. (4 marks) 2. Determine the contribution to profit from each customer last year. Comment on your solution. (14 marks)
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