Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Necklace Delights is a new company that manufactures custom jewelry. Necklace Delights currently has six customers referenced by customer number: 01, 02, 03, 04,
Necklace Delights is a new company that manufactures custom jewelry. Necklace Delights 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: 1 (Click the icon to view the activities.) (Click the icon to view the custom i More Info - i Requirements 1. Customer orders. The salespeople, designers, and jewelry makers spend time with the customer. The cost driver rate is $45 per hour spent with a customer. 2. 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. 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 $90 per rush order. 4. 2. Are any customers unprofitable? What is causing this? What should Necklace Delights do about these customers? 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 $22 per return visit. Print Done i Data Table Information about the six customers follows. Some customers purchased multiple items. The cost of the jewelry is 60% of the selling price. Customer number 01 02 03 04 05 06 Sales revenue 500 $ Cost of item(s) 300 $ 5,300 $ 3,180 $ 320 $ 192 $ 2,400 $ 1,440 $ 4,600 $ 2,760 $ 620 372 Hours spent on customer order 2 10 2 6 20 3 Hours on fittings 2 4 1 2 1 Number of rush orders 0 0 1 0 0 0 Number of return visits 0 1 1 0 LQ 5 1
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started