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You own a credit card company. You want to evaluate the profitability of customers A and B. customer A customer B $600 credit card balance
You own a credit card company. You want to evaluate the profitability of customers A and B. customer A customer B $600 credit card balance $1,500 number of transactions 150 60 number of customer-support calls 60 3 The only source of revenue from customers is the interest that you charge on credit card balances. You charge customers an interest rate of 10 %. Thus, if the credit card balance is $1,000, revenue is $1000*0.1-$100 Variable costs are zero for simplicity. From your ABC system, the activity rates are $0.25 per transaction and $2 per customer-support call a) Compute revenue, costs, and profit margin for each customer. customer B customer A Revenue $ Variable costs Contribution margin $ Allocated costs transactions Allocated costs customer support Profit margin Enter negative numbers with a minus sign, i.e., a loss of $200 should be entered as -200, not as (200) or ($200)
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