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You own a credit card company. You want to evaluate the profitability of customers A and B. customer Acustomer B credit card balance $1,500 $600
You own a credit card company. You want to evaluate the profitability of customers A and B. customer Acustomer B credit card balance $1,500 $600 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 30%. Thus, if the credit card balance is $1,000, revenue is $1000*0.3=$300. Variable costs are zero for simplicity. From your ABC system, the activity rates are $0.75 per transaction and $6 per customer- support call. a) Compute revenue, costs, and profit margin for each customer. customer A customer B 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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