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Please help with all 2 requirements Mississippi Manufacturing makes a component called B2040. This component is manufactured only when ordered by a customer, so Mississippi
Please help with all 2 requirements
Mississippi Manufacturing makes a component called B2040. This component is manufactured only when ordered by a customer, so Mississippi keeps no inventory of B2040. The list price is $112 per unit, but customers who place "large" orders receive a 10% discount on price. The customers are manufacturing firms. Currently, the salespeople decide whether an order is large enough to qualify for the discount. When the product is finished, it is packed in cases of 10. If the component needs to be exchanged or repaired, customers can come back within 14 days for free exchange or repair. (Click the icon to view the data.) (Click the icon to view the activities and cost drivers.) Read the requirements. Data table Information about Mississippi's five biggest customers follows: Number of units purchased Discounts given Number of orders Number of cases Number of rush orders A 5,400 10% 8 540 2 Customer D 4,400 10% 20 440 0 B 1,800 1,200 10% 0% 16 50 180 120 7 1 E 8,100 10% on half the units 18 810 8 Number of units purchased Discounts given Number of orders Number of cases Number of rush orders Number of units exchanged/repaired 5,400 1,800 1,200 10% 10% 0% 8 16 50 180 120 7 1 70 13 540 2 18 4,400 10% 20 440 0 50 8,100 10% on half the units 18 810 8 200 All customers except E ordered units in the same order size. Customer E's order quantity varied, so E got a discount part of the time but not all the time. Data table The full cost of manufacturing a unit of B2040 is $95. In addition, Mississippi incurs customer-level costs. Customer-level cost-driver rates are shown below: Order taking Product handling Rush-order processing Exchange and repair costs $360 per order $15 per case $560 per rush order $50 per unit Requirements 1. Calculate the customer-level operating income for these five customers. Use the format provided. Prepare a customer-profitability analysis by ranking the customers from most to least profitable. 2. Discuss the results of your customer-profitability analysis. Does Mississippi have unprofitable customers? Is there anything Mississippi should do differently with its five customers? Requirement 1. Calculate the customer-level operating income for these five customers. Use the format provided. Prepare a customer-profitability analysis by ranking the customers from most to least profitable. Begin by calculating the customer-level operating income for these five customers. (For accounts with a $0 balance, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign when entering operating losses.) Revenues at list price Price discounts Revenues at actual prices A 604800 60480 544320 B 201600 40320 161280 C 134400 0 0 D 52800 5280 47520 E 907200 45360 861840 Begin by calculating the customer-level operating income for these five customers. (For accounts with a $0 balance, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign when entering operating losses.) Revenues at list price Price discounts Revenues at actual prices Cost of goods sold Gross margin A 604800 60480 544320 B 201600 40320 161280 C 134400 0 0 D 52800 5280 47520 E 907200 45360 861840
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