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Carmel Company has a frequent buyer program for its customers, where the customers can attain an elite level based on the number of orders and
Carmel Company has a frequent buyer program for its customers, where the customers can attain an "elite" level based on the number of orders and the total revenue of the orders. There are two elite levels: Platinum and Titanlum. The benefits of elite membership Include discounts and access to special customer service representatives who can resolve problems. The company has one full-time customer representative per 200 Titanlum customers and one full-time customer representative per 2,000 Platinum customers. Customer representatives receive salaries plus bonuses of 1 percent of customer gross margin. Carmel spends 90 percent of its promotion costs on Titanlum customers to encourage their loyalty. Total 28, Customer Costs Number of customers Average customer representative salary Promotion costs Average gross margin per customer Titanium Platinum 6,000 22,000 $ 69,000 $69,000 $2,950,000 $ 1,600 $ 330 Required: a. Calculate the totals of the items below for both titanlum and platinum customers, as well as the excess of gross margin over customer costs for each category. b. Which customers are more profitable? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the totals of the items below for both titanium and platinum customers, as well as the excess of gross margin over customer costs for each category. (Do not round intermediate calculations.) Titanium Platinum Total gross margin Customer representative salaries & bonuses Promotion costs Excess of gross margin over customer cost Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for Inventory is not an option. Mercia's single plant has the capacity to make 94,500 packages of chocolate annually. Currently, Mercla sells to only two customers: Ver's Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern's orders 54,900 packages and Mega Stores orders 19,500 packages annually. Variable manufacturing costs are $19 per package, and annual fixed manufacturing costs are $534,000. The gourmet chocolate business has two seasons, holidays and non-holidays. The holiday season lasts exactly four months and the non-holiday season lasts elght months. Vern's orders the same amount each month, so Vern's orders 17,700 packages during the holidays and 37,200 packages in the non-holiday season. Mega Stores only carries Mercia's chocolates during the holidays. Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. b. Calculate the product cost for each season with excess capacity costs assigned to the season requiring It. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the product cost for each season with excess capacity costs assigned to the season requiring it. (Round your intermediate calculations and final answers to 2 decimal places.) Non-holiday Holiday Product Cost per package per package
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