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Question 1( 30 marks) a. There appears to be a growing tendency for companies to seek competitive advantage by applying customer focused strategies. This customer

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Question 1( 30 marks) a. There appears to be a growing tendency for companies to seek competitive advantage by applying customer focused strategies. This customer focus is evident from a number of companies including customer orientation in their corporate mission statement. 1-Explain the concept of customer profitability analysis. Give examples of cost drivers used in this analysis 2-How does the life time analysis differ from the basic customer profitability approach? Explain 3-Show reasons why might an organization choose to keep an apparently unprofitable customer. 4- Should the company in its customer profitability analysis use activity based costing approach or traditional product and service costing approaches. Explain the reason behind your answer. (20 marks) b- Provide brief information about the IMA(Institute Of Management Accountants), its history, mission, vision, core values , conditions for membership ...etc.( not more than 200 words) (10 marks) Provide brief information about the IMA(Institute of Management Accountants), its history. mission, vision, core values. conditions for membership...tenot more than 200 words) (10 marks) Question 2 ( 30 marks) Amira, the owner of a music equipment shop wanted to have a sales budget for the next three months. She asked her assistant Dina to do the job. After consulting with friends in the same business, Dina estimated February revenues to be $30,000. She expects revenues to increase by $3,000 per month in March and April. Dina also expects that 60% of sales to be cash and 40% of sales to be on credit. Sales on credit are expected to be collected as follows: 30% in the month of sale and 70% in the month following the sales Required: Based on the above information, calculate the expected cash collection for the month of April Question 3 ( 40 marks) Newtel Inc, manufactures Cell phones. Last year Newtel sold 30,000 phones at $80 each. Total costs amounted to $1,800,000 of which S600,000 were considered fixed. In an attempt to improve its product, the company is considering replacing a component part that has a cost of 516 with a new and better part costing S26 per unit in the coming year. A new machine would also be needed to increase plant capacity. The machine would cost $100,000 with a useful life of five years and a $20,000 salvage value The company uses straight-line depreciation on all plant assets. (Ignore company tax.) Reywired: Calculate in units, Innovation's break-even point for las year (10 marks) 2. Calculate the number of units that the company would have had to sell in the last year to cam $ 200,000 Prove your answer ( 10 marks) 3. If Newtel increases the selling price by S20, and purchases the new part and the new machine, calculate the new contribution margin, the new fixed cost & the number of units that the company will have to sell to make the same net income as last year. (20 marks)

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