Customer Profitability [15 marks] Assign the activity costs to each of the three (3) customers [4 marks] Cubes with Speed is a wholesaler of a large range of speed cubes, puzzles and accessories that supply to a large range of different customers. The business is concerned about increasing costs related to various activities of the business. These concerns include costs relating to administration, associated with processing and invoicing orders to customers and the costs related to distribution of the orders to the customers. 2. Calculate the contribution for each customer using the data provided for each customer (sales, cost of goods sold and profit) (4 marks] The business has decided to investigate costs relating to sales of products to its customers using a simple customer analysis exercise and has identified the following costs related to three (3) of its customers Financial data by customer category Rubik Gan QiYi 140,000 $ Sales revenue S 250,000 $ 150.000 Total 550,000 315,000 235,000 160,000 $ 88,000 72.000 Cast of sales 77,000 3. Rank each customer from best to worst (1 = best to 3 = worst) in terms of profitability for the business. [1 mark] Grass Profit 100,000 63.000 $ 42.000 Order processing and invoicing costs (based on the number of orders received) Distribution costs (based on the number of deliveries made Sales and marketing costs (based on dollar value of sales) Administration costs (based on the number of deliveries made) 83,500 53,500 36.000 Total expenses Profit (Loss) 215,000 20,000 4. Provide Cubes with Speed with two (2) recommendations as to potential areas of change that could improve relationships with customers and profitability for the business (4 marks] S Cost drivers Number of orders received and invoiced 45 SS 90 190 Number of deliveries made 60 73 120 253 1. Calculate the activity cost rate for each activity [2 marks]