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SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receive salaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 80 percent of its promotion costs on Gold customers to encourage their loyalty Customer Costs Number of customers Total 94,000 Average customer representative salary. Gold 34,000 $ 74,000 Silver 60,000 $ 74,000 Promotion costs $4,300,000 Average gross margin per customer $ 680 $ 250 Required: a. Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin over customer costs for each category. b. Which customers are more profitable?
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