Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jewel Joy is a new company that manufactures custom jewelry. Jewel Joy currently has six customers referenced by customer number: 01, 02, 03, 04, 05,

image text in transcribedimage text in transcribedimage text in transcribed

Jewel Joy is a new company that manufactures custom jewelry. Jewel Joy currently has six customers referenced by customer number: 01, 02, 03, 04, 05, and 06. Besides the costs of making the jewelry, the company has the following activities: Click the icon to view the activities.) 5 (Click the icon to view the customer data.) Read the requirements. Requirement 1. Calculate the customer-level operating income for each customer. (Complete all answer boxes. Enter a "0" for any zero balances. Use parentheses or a minus sign when entering operating losses.) Customer 01 02 03 04 05 06 Revenue $ 700 $ 850 3,800 $ 2,660 280 $ 196 2,000 $ 1,400 4,900 $ 3,430 Cost of product 490 595 Gross profit Customer-level costs Customer orders Customer fittings Rush order costs Returns for repair Customer-level operating income (loss) More info 1. Customer orders. The salespeople, designers, and jewelry makers spend time with the customer. The cost-driver rate is $38 per hour spent with a customer. 2. Customer fittings. Before the jewelry piece is completed, the customer may come in to make sure it looks right and fits properly. Cost-driver rate is $26 per hour. 3. Rush orders. Some customers want their jewelry quickly. The cost-driver rate is $115 per rush order. 4. Number of customer return visits. Customers may return jewelry up to 30 days after the pickup of the jewelry to have something refitted or repaired at no charge. The cost-driver rate is $28 per return visit. Data table Information about the six customers follows. Some customers purchased multiple items. The cost of the jewelry is 70% of the selling price. Customer number 01 02 03 04 05 06 Custom Cust Sales revenue $ 700 $ 280 $ 850 3,800 $ 2,660 $ 2,000 $ 1,400 $ 4,900 $ 3,430 $ Cus $ 490 $ 196 $ 595 Rus 2 6 1 6 18 5 Cost of item(s) Hours spent on customer order Hours on fittings Number of rush orders Rety 0 4 0 1 0 1 0 2 NN- 1 2 0 0 Custom 0 Number of return visits 0 1 O 0 1 C Requirements 1. Calculate the customer-level operating income for each customer. Rank the customers in order of most to least profitable and prepare a customer-profitability analysis. 2. Are any customers unprofitable? What is causing this? What should Jewel Joy do about these customers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Analysis With Microsoft Excel

Authors: Conrad Carlberg

3rd Edition

0789736640, 9780789736642

More Books

Students also viewed these Accounting questions

Question

What is a key public for this product/service/concept?

Answered: 1 week ago