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II. A and B are two customers of XYZ Electronics Ltd., a manufacturer of audio players: Selling price per unit is Rs. 5,400. Its cost
II. A and B are two customers of XYZ Electronics Ltd., a manufacturer of audio players: Selling price per unit is Rs. 5,400. Its cost of production per unit is Rs. 4,420 Additional costs are: Order Processing Cost: Rs. 2,000 per order Delivery Costs: Rs. 3,500 per delivery Details of customers A and B for the period are given below CustomerB 500 10 (each of 50 units) Customer A Audio Players purchased (no.) 350 No. of orders 5 (each of 70 units) No. of deliveries The company's policy is to give a discount of 5% on the selling price on orders for 50 units or more, and to further give 8% discount on the undiscounted selling price if a customer uses his own transport to collect the order. Assume that production levels are not altered by these orders. You are required to analyse the profitability by comparing profit per unit for each customer. Comment on the discount policy on delivery. 16] OR
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