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Rick Flair, the controller of Quality Supply, wants to use this ABC system to examine individual customer profitability within each distribution market. LOADING... (Click the
Rick Flair, the controller of
Quality Supply,
wants to use this ABC system to examine individual customer profitability within each distribution market.
LOADING...
(Click the icon to view additional information.)Read the requirements
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.
Requirement 1. Use the ABC information to compute the operating income of each customer in August
2017.
Comment on the results and what, if anything, Flair should do. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for operating losses.)
Quality Supply is a distributor of pharmaceutical products. Its ABC system has five activities: (Click the icon to view the activities.) Rick Flair, the controller of Quality Supply wants to use this ABC system to examine Individual customer profitability within each distribution market (Click the icon to view additional information.) Read the requirements, Requirement 1. Use the ABC information to compute the operating income of each customer in August 2017. Comment on the results and what, if anything, Flair should do. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for operating losses.) Chapel Hill Pharmacy Revenues Cost of goods sold Gross margin Operating costs Operating income(loss) Quality Supply is a distributor of pharmaceutical products. Its ABC system has five activities: (Click the icon to view the activities.) Rick Flair, the controller of Quality Supply, wants to use this ABC system to examine individual customer profitability within each distribution market. (Click the icon to view additional information.) Read the requirements. X and what - X Data table More info Requirement 1 Use parenthese Chapel Hill Pharmacy Albany Pharmacy Revenues 16 10 Activity Area 12 19 Cost of goods Gross margin 6 6 8 Total orders Average line items per order Total store deliveries Average cartons shipped per store delivery Average hours of shelf-stocking per store dellvery Average revenue per delivery Average cost of goods sold per delivery Cost Driver Rate in 2017 $39 per order $7 per line item $49 per store delivery $5 per carton $18 per stocking-hour 24 23 Operating costs 1. Order processing 2. Line-Item ordering 3. Store deliveries 4. Carton deliveries 5. Shelf-stocking 0.5 0.25 Operating incor S S 1,950 2,500 $ 2,100 $ S 1,500 Print Done Print Done Requirements 1. 2. Use the ABC information to compute the operating income of each customer in August 2017. Comment on the results and what, if anything, Flair should do. Flair ranks the individual customers in the Ma and Pa single-store distribution market on the basis of monthly operating income. The cumulative operating income of the top 20% of customers is $52,740. Quality Supply reports operating losses of $23,670 for the bottom 40% of its customers. Make four recommendations that you think Quality Supply should consider in light of this new customer-profitability information. Print DoneStep by Step Solution
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