Part $1$

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

$$450$

$$5,300$

$$330$

$$2,500$

$$5,500$

$$750$

Cost of product

$270$

$3,180$

$198$

$1,500$

$3,300$

$450$

Gross profit

Customer$-$level costs

Customer orders

Customer fittings

Rush order costs

Returns for repair

Customer$-$level operating income $($loss$)$

Part $2$

Rank the customers in order of most to least profitable and prepare a customer$-$profitability analysis in terms of operating income. $($Use parentheses or a minus sign when entering negative numbers and losses. Enter percents rounded to two decimal places, X$.$XX$\%)$

Customer Number

Customer$-$Level Operating Income

Customer Revenue

Customer$-$Level Operating Income Revenue $(\%)$

Cumulative Customer$-$Level Operating Income

Cumulative Customer$-$Level Operating Income as a $\%$ of Total Customer$-$Level Operating Income $(\%)$

First row customer number input

First row customer$-$level operating income number input

First row customer revenue number input

First row customer$-$level operating income revenue percentage number input

First row cumulative customer$-$level operating income number input

First row cumulative customer$-$level operating income as a $\%$ of total customer$-$level operating income percentage number input

Second row customer number input

Second row customer$-$level operating income number input

Second row customer revenue number input

Second row customer$-$level operating income revenue percentage number input

Second row cumulative customer$-$level operating income number input

Second row cumulative customer$-$level operating income as a $\%$ of total customer$-$level operating income percentage number input

Third row customer number input

Third row customer$-$level operating income number input

Third row customer revenue number input

Third row customer$-$level operating income revenue percentage number input

Third row cumulative customer$-$level operating income number input

Third row cumulative customer$-$level operating income as a $\%$ of total customer$-$level operating income percentage number input

Fourth row customer number input

Fourth row customer$-$level operating income number input

Fourth row customer revenue number input

Fourth row customer$-$level operating income revenue percentage number input

Fourth row cumulative customer$-$level operating income number input

Fourth row cumulative customer$-$level operating income as a $\%$ of total customer$-$level operating income percentage number input

Fifth row customer number input

Fifth row customer$-$level operating income number input

Fifth row customer revenue number input

Fifth row customer$-$level operating income revenue percentage number input

Fifth row cumulative customer$-$level operating income number input

Fifth row cumulative customer$-$level operating income as a $\%$ of total customer$-$level operating income percentage number input

Sixth row customer number input

Sixth row customer$-$level operating income number input

Sixth row customer revenue number input

Sixth row customer$-$level operating income revenue percentage number input

Sixth row cumulative customer$-$level operating income number input

Sixth row cumulative customer$-$level operating income as a $\%$ of total customer$-$level operating income percentage number input

Part $3$

Requirement $2.$ Are any customers unprofitable? What is causing this? What should Jewel Joy do about these customers?

The unprofitable customer$($s$)$

are Customers $03$ and $01.$

is Customer $03.$

are none.

Unprofitable customers, if there are any, are those who have a

high operating income to revenue percentage.

low operating income to revenue percentage.

They tend to have

high activity levels and$/$or low revenues.

low activity levels and$/$or low revenues.

The customers with the lowest operating income amounts are usually those customers with a

large number of orders, rush orders, and return visits.

small number of orders, rush orders, and return visits.

Part $4$

Jewel Joy could make these customers more profitable by: $($If a box is not used in the table, leave the box empty; do not select an answer.$)$

Part $5$

Whatever decision it takes, Jewel Joy must also consider the effect the decision might have on

the number of hours spent on customer order.

the number of rush orders.

total sales.

The unprofitable customer$($s$)$Unprofitable customers, if there are any, are those who have aUnprofitable customers, if there are any, are those who have aThey tend to haveThey tend to haveThe customers with the lowest operating income amounts are usually those customers with aThe customers with the lowest operating income amounts are usually those customers with aWhatever decision it takes, Jewel Joy must also consider the effect the decision might have on

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Activities

Customer orders. The salespeople, designers, and jewelry makers spend time with the customer. The cost$-$driver rate is $ $44$ per hour spent with a customer.

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 $ $20$ per hour.

Rush orders. Some customers want their jewelry quickly. The cost$-$driver rate is $ $110$ per rush order.

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 $ $25$ per return visit.

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Customer Data

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

$$450$

$$5,300$

$$330$

$$2,500$

$$5,500$

$$750$

Cost of item$($s$)$

$$270$

$$3,180$

$$198$

$$1,500$

$$3,300$

$$450$

Hours spent on customer order

$2$

$7$

$2$

$7$

$25$

$3$

Hours on fittings

$1$

$6$

$0$

$3$

$5$

$0$

Number of rush orders

$0$

$0$

$1$

$2$

$2$

$0$

Number of return visits

$0$

$0$

$0$

$0$

$3$

$1$

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Required

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.

Are any customers unprofitable? What is causing this? What should Jewel Joy do about these customers?

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