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Dakota Office Product (Case): Based on the Dakota Office Product case, following information is give: Services Provided to Customer A and Customer B Particulars Customer

Dakota Office Product (Case): Based on the Dakota Office Product case, following information is give:

Services Provided to Customer A and Customer B
Particulars Customer A Customer B
No. of cartons ordered 200 200
No. of cartons shipped (commercial freight) 200 150
No. of desktop deliveries 25
No. of manual orders 6 100
No. of line items (manual) 60 180
No. of EDI orders 6
Average Account Receivables 9,000 30,000
Profitability Analysis of Customer A and B
Particulars Customer A Customer B
Sales 103,000 104,000
Cost of items purchased 85,000 85,000
Gross Margin 18,000 19,000
Cost of processing cartons 10,400 10,400
Cost of shipping cartons (commercial freight) 1,200 900
Cost of shipping cartons (desktop delivery) 5,500
Cost of processing orders (manual) 60 1,000
Cost of entering line items (manual orders) 240 720
Cost of processing EDI orders 30
Interest cost on average account receivables 900 3,000
Profit from customers 5,170 -2,520

1.How much interest rate (per annum) should DOP charge from Customer B on the account receivables of $30,000 in order to achieve a profit of $0;

2.What will be the profit for DOP from Customer B if all its cartons are shipped via commercial freight;

3.The per unit cost of processing EDI orders divided by the per unit cost of processing orders manually is;

4.What will be the profit from Customer A if DOP is not incurring any interest cost on its accounts receivables;

5. In relation to the costs incurred by DOP, which activity accounts for the biggest absolute difference between Customer A and Customer B?

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