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Question 3: (24 marks) Disney Forever is a toy producer and wholesaler in Australia and New Zealand. The company has classified its customers to three

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Question 3: (24 marks) Disney Forever is a toy producer and wholesaler in Australia and New Zealand. The company has classified its customers to three categories: small, medium and large according to their usual order size or sales volume. Mickey Forever's management has started a relatively simple customer profitability analysis project. The following table show the results of this analysis project: Large Sales revenue $1,681,000 $1,920,300 $3,000,000 $6,401,400 Direct costs of sales 5924,594 $1,056,198 $1,800,000 $3.760.193 Use of product-related activities Number of orders received Number of deliveries made 20 Small Medium Total 96 54 42 192 1.32 26 60 Indirect costs and their cost drivers are defined in the table below: Estimated indirect costs Cost driver Activity cost pool Orders filling costs Number of orders Distribution-related costs Number of deliveries Marketing promotion sales Sales dollars Administration related costs Number of deliveries 5504,000 $1.000.000 S1.122.000 5552,720 Required: a. Using the activity analysis results, assign the activity costs to each of the three customer categories. (8 marks) Click or tap here to enter text. b. Calculate the profitability of each of the customer categories and draw an appropriate conclusion from your analysis. [10 marks Hints: conduct a customer profitability analysis based on the above customer related indirect costs. Click or tap here to enter text. c. The management of Disney Forever is concerned about the increasing competition in the industry. They have acknowledged that customer relationship management is very important for the company's growth. Advise the management on what critical strategic factors should be monitored in addition to the financial profitability analysis. 16 marks/ Click or tap here to enter text. Question 4: (26 marks) One Hawk Ltd. is evaluating a project on purchasing new automation equipment to improve its production capacity

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