Question
XYZ provides two different type of service, A and B. Service B is less well-known than service A. As a result, Service B requires more
XYZ provides two different type of service, A and B. Service B is less well-known than service A. As a result, Service B requires more effort by sales representatives. ABC seeks to determine whether Service B should be discontinued.
The following are total sales expenses:
| Sales Rep Salaries | $120,000 |
| Phone and Internet | $20,000 |
| Travel | $50,000 |
| Presentation Materials and Equipment | $15,000 |
The following activity information is available
|
| Service A | Service B |
| Number of Appointments | 35 | 75 |
| Number of Follow-up Calls | 25 | 135 |
| Fraction of Total Effort | 25% | 75% |
| Number of Presentations | 10 | 30 |
| Sales Volume | $1,499,125 | $783,121 |
| Number of Final Sales | 512 | 281 |
a) What is the cost of delivering each service?
b) What should XYZ do?
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Virtual Remote Audit From Planning To Implementation
Authors: Roland Scherb
2nd Edition
3754301667, 978-3754301661
