so this is the problem i got i cant figure out the sevice cost on the last page i put. I was wondering if someone could check the answers to make sure i am doing them correctly.I also need help on whether i should lower the prices for a certain company or cut off a company becasue we arent making any money and a reson why.
question
answers
question
answer
we Should 1ower thour Johnson Beverage sell to Retail store customers about 20 customers Last year Revenue was $12 million-Sell Sport Dr (Exhibit 1 Customer Profitability) Total JB Odd Lots $12,000,000 Cost of Goods Sold 1,048,000 7,886,200 re create Customer Service Costs these #sL Customer Profit 1,200,000 116,800 12,152 271,382 Profit % 0.3% 2.7% List price is $15.20 per case Cost is $13.10 per case Discounts vary by customer (Exhibit 2 Customer information) Oscars Total JB $ 15.00 hyn A Odd Lots $14.80 $14.go $ 15.19 $ 15.15 Price per Case Number of Cases Number of Orders Number of Deliveries 800,000 Miles per Delivery Expedited Deliveries Sales Visits Customer Saver Superstore is not happy- they think they are paying too much Customer Service Cost Detail In addition to COGS Johnson has Customer Service costs of $1.2 million per year- like overhead See Table 1 Currently allocated based on % of revenue Product Handling Taking Orders from Customers Delivering the Product Expediting Deliveries Sales visits Total 672,000r 672,000 +0.su 100,000 198,000 $ 1,200,000 They Run a report of Profitability by Customer See Exhibit 1 2000 100,b00 -1200 Can you help them using Activity Based costing? Coment whether reare Rage over agan Thenpt to give tWem Some advice 2ate 6,720 4/o00 200 6,875 Ex Peditivavres130 6250 4, 32,3d Activihy rate Prokvet hansfing 3o.be 0 25/20 Tae- bder5 tron cash-3 2,315 Deiive oing me scoduct (23x 3.125 32,373 $43,153 indtrect Coot for othes Actinty cost Product honbing Ratecost Actvity 002,00 o.gu $ 505, 13.125 110' 2s 3 74.2a 154/4s 246-1250 $741 ooo ta Cost 8 20,526.5 Dountown Saver Supec Stor 1,000 Ner teven ue 21,620 6,720 Grass Pro Cs romer Service ca CuSton er prbd 4400 25,000 202.5 51047 343. 344265.5 la, o00 , Total JBI 2,0 06,0o D, 430 000 Net revenue Coe s Gross Proft Cus tomer Service Cast Customer Robvct 413,76.5 5 20.00 10 6281.3 Johnson Beverage sell to Retail store customers-about 20 customers Last year Revenue was $12 million -Sell Sport Drinks (Exhibit 1 Customer Profitability) Oscars Odd Lots Midwellorn Others Total JB Retail 1,192,000 $121,520$454,500 393,000 Net Revenue Cost of Goods Sold Gross Profit Customer Service Costs Customer Profit Profit % $1,168,000 1,048,000 7,886,200 1,177,780 10,480,000 1,520,000 1,200,000 104,800 144,000 119,200 24,800 45,450 16,050 116,800 12,152 271,382 3.0% 2.7% 3.5% List price is $15.20 per case Cost is $13.10 per case Discounts vary by customer (Exhibit 2 Customer information) Oscars Odd Lots Midwellon $ 15.19 Downtown Retail $15.15 Others $ 15.06 Total JBI 15.00 800,000 Price per Case Number of Cases Number of Orders Number of Deliveries Miles per Delivery Expedited Deliveries Sales Visits S14.60 80,000 80,000 4,480 Customer Saver Superstore is not happy-they think they are paying too much Customer Service Cost Detail In addition to COGS Johnson has Customer Service costs of $1.2 million per year-like overhead See Table 1 Currently allocated based on % of revenue Cost Product Handling Taking Orders from Customers Delivering the Product Expediting Deliveries Sales visits Total $672,000 They Run a report of Profitability by Customer See Exhibit 1 90,000 $1,200,000 Can you help them using Activity Based costing? Preeare Rage oves agan Nt Rvenue $,66,000 co6s 4494, 000 893,0oo 64, oo 43453 7,26 200 10,40,oc 6 20 1 2500o 19,000 8047 3.B% 40% 3.f%, 344% Service Costs hanalen61200 0 veR Pawntrun fo re $4C.19 3-1 25(23b74), 2875 Visits K12: 3000 10,000 ar per Caie 38, 39 43453 mer NambeR Cases 00 505,6 , sale vists the Ce Thi Nguyen , ors 813u Accqt 16 8 :00 am, 1.0 am we Should 1ower thour Johnson Beverage sell to Retail store customers about 20 customers Last year Revenue was $12 million-Sell Sport Dr (Exhibit 1 Customer Profitability) Total JB Odd Lots $12,000,000 Cost of Goods Sold 1,048,000 7,886,200 re create Customer Service Costs these #sL Customer Profit 1,200,000 116,800 12,152 271,382 Profit % 0.3% 2.7% List price is $15.20 per case Cost is $13.10 per case Discounts vary by customer (Exhibit 2 Customer information) Oscars Total JB $ 15.00 hyn A Odd Lots $14.80 $14.go $ 15.19 $ 15.15 Price per Case Number of Cases Number of Orders Number of Deliveries 800,000 Miles per Delivery Expedited Deliveries Sales Visits Customer Saver Superstore is not happy- they think they are paying too much Customer Service Cost Detail In addition to COGS Johnson has Customer Service costs of $1.2 million per year- like overhead See Table 1 Currently allocated based on % of revenue Product Handling Taking Orders from Customers Delivering the Product Expediting Deliveries Sales visits Total 672,000r 672,000 +0.su 100,000 198,000 $ 1,200,000 They Run a report of Profitability by Customer See Exhibit 1 2000 100,b00 -1200 Can you help them using Activity Based costing? Coment whether reare Rage over agan Thenpt to give tWem Some advice 2ate 6,720 4/o00 200 6,875 Ex Peditivavres130 6250 4, 32,3d Activihy rate Prokvet hansfing 3o.be 0 25/20 Tae- bder5 tron cash-3 2,315 Deiive oing me scoduct (23x 3.125 32,373 $43,153 indtrect Coot for othes Actinty cost Product honbing Ratecost Actvity 002,00 o.gu $ 505, 13.125 110' 2s 3 74.2a 154/4s 246-1250 $741 ooo ta Cost 8 20,526.5 Dountown Saver Supec Stor 1,000 Ner teven ue 21,620 6,720 Grass Pro Cs romer Service ca CuSton er prbd 4400 25,000 202.5 51047 343. 344265.5 la, o00 , Total JBI 2,0 06,0o D, 430 000 Net revenue Coe s Gross Proft Cus tomer Service Cast Customer Robvct 413,76.5 5 20.00 10 6281.3 Johnson Beverage sell to Retail store customers-about 20 customers Last year Revenue was $12 million -Sell Sport Drinks (Exhibit 1 Customer Profitability) Oscars Odd Lots Midwellorn Others Total JB Retail 1,192,000 $121,520$454,500 393,000 Net Revenue Cost of Goods Sold Gross Profit Customer Service Costs Customer Profit Profit % $1,168,000 1,048,000 7,886,200 1,177,780 10,480,000 1,520,000 1,200,000 104,800 144,000 119,200 24,800 45,450 16,050 116,800 12,152 271,382 3.0% 2.7% 3.5% List price is $15.20 per case Cost is $13.10 per case Discounts vary by customer (Exhibit 2 Customer information) Oscars Odd Lots Midwellon $ 15.19 Downtown Retail $15.15 Others $ 15.06 Total JBI 15.00 800,000 Price per Case Number of Cases Number of Orders Number of Deliveries Miles per Delivery Expedited Deliveries Sales Visits S14.60 80,000 80,000 4,480 Customer Saver Superstore is not happy-they think they are paying too much Customer Service Cost Detail In addition to COGS Johnson has Customer Service costs of $1.2 million per year-like overhead See Table 1 Currently allocated based on % of revenue Cost Product Handling Taking Orders from Customers Delivering the Product Expediting Deliveries Sales visits Total $672,000 They Run a report of Profitability by Customer See Exhibit 1 90,000 $1,200,000 Can you help them using Activity Based costing? Preeare Rage oves agan Nt Rvenue $,66,000 co6s 4494, 000 893,0oo 64, oo 43453 7,26 200 10,40,oc 6 20 1 2500o 19,000 8047 3.B% 40% 3.f%, 344% Service Costs hanalen61200 0 veR Pawntrun fo re $4C.19 3-1 25(23b74), 2875 Visits K12: 3000 10,000 ar per Caie 38, 39 43453 mer NambeR Cases 00 505,6 , sale vists the Ce Thi Nguyen , ors 813u Accqt 16 8 :00 am, 1.0 am
