Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 19.43 The sales manager of a children's clothing manufacturer and wholesaler is analyzing the profitability of two groups of customers. One group consists of
Problem 19.43 The sales manager of a children's clothing manufacturer and wholesaler is analyzing the profitability of two groups of customers. One group consists of small, family-owned stores that purchase frequent small orders with very specific types of clothing that may require special handling during the manufacturing process. The other group consists of discount retailers that buy large lots of standard clothing at a standard mix but at lower prices. Recently, the firm has implemented a balanced Scorecard and has begun to collect financial and nonfinancial data for each type of customer. The firm is considering whether it would be worthwhile to concentrate on one type of customer as a differentiation strategy. The accountant has gathered the following relevant information for the past month. Number of customers Revenues Direct costs (DM and DL) Delivery costs Number of returns Number of change orders Number of deliveries Family Stores 190 $1,083,000 $541,500 $49,400 798 114 385 Discount Retailer 45 $2,565,000 $555,000 $37,800 225 2 59 Following are the performance measures used to analyze customer benefit by group. Revenue per customer Revenue less direct costs per customer Distribution costs per customer Number of returns per customer Change orders per customer Number of deliveries per customer Calculate the performance measures for each customer type. (Round answers in dollars to o decimal places, e.g. 125 and other answers to 1 decimal place, e.g. 25.2.) Family Discount 5700 57000 Revenue per customer Revenue less direct costs per customer $1 2850 44667 Distribution costs per customer 260 840 Number of returns per customer 4.2 5 Change orders per customer 0.6 0.04 Number of deliveries per customer 2.03 1.3 SHOW ANSWER LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Calculate the contribution margin per customer. Family Discount 2590 11,493 Contribution margin per customer
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