Quebec Ltd. is a company that manufactures climbing rope for mountaineering and rescue operations. They sell...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Quebec Ltd. is a company that manufactures climbing rope for mountaineering and rescue operations. They sell various types of rope to four distributors: Alpine Adventures Corporation (AAC), Mountain Supply Coop (MSC), Bigfoot Safety Supply Ltd. (BSS), Elite Mountain Equipment (EME). Currently, Quebec Ltd. does not charge extra fees for any order and delivery related costs. The company president, Rolf Resche, wants an ABC customer analysis done to determine if a change in pricing policy is warranted. The customer-level cost driver rates are: Order taking Product handling Delivery by ground Delivery by air freight Rush order extra cost $32 5 1 15 45 Rope costs $2 per metre to produce and sells for an average price of $3 per metre in units of 100 metres. per order per thousand metres per kilometre per order (delivery to air freight company) per order The following table presents customer metrics: Total # of units sold Number of orders Ground delivery kilometres Air freight deliveries Number of rush orders Required: AAC 2,500 1,250 6,250 100 MSC 8,000 3,000 15,000 2,700 100 BSS 4,000 4,500 4,500 4,500 EME 500 500 500 500 Prepare a customer profitability report for the president using ABC analysis. Present the profit as a percentage of sales for each customer at the end of the report. Quebec Ltd. is a company that manufactures climbing rope for mountaineering and rescue operations. They sell various types of rope to four distributors: Alpine Adventures Corporation (AAC), Mountain Supply Coop (MSC), Bigfoot Safety Supply Ltd. (BSS), Elite Mountain Equipment (EME). Currently, Quebec Ltd. does not charge extra fees for any order and delivery related costs. The company president, Rolf Resche, wants an ABC customer analysis done to determine if a change in pricing policy is warranted. The customer-level cost driver rates are: Order taking Product handling Delivery by ground Delivery by air freight Rush order extra cost $32 5 1 15 45 Rope costs $2 per metre to produce and sells for an average price of $3 per metre in units of 100 metres. per order per thousand metres per kilometre per order (delivery to air freight company) per order The following table presents customer metrics: Total # of units sold Number of orders Ground delivery kilometres Air freight deliveries Number of rush orders Required: AAC 2,500 1,250 6,250 100 MSC 8,000 3,000 15,000 2,700 100 BSS 4,000 4,500 4,500 4,500 EME 500 500 500 500 Prepare a customer profitability report for the president using ABC analysis. Present the profit as a percentage of sales for each customer at the end of the report.
Expert Answer:
Related Book For
Financial Accounting
ISBN: 9781264229734
11th Edition
Authors: Robert Libby, Patricia Libby, Frank Hodge
Posted Date:
Students also viewed these accounting questions
-
A company that manufactures recreational pedal boats has approached Mike Cichanowski to ask if he would be interested in using Current Designs rotomold expertise and equipment to produce some of the...
-
A company that manufactures air-operated drain valve assemblies budgeted $74,000 per year to pay for plastic components over a 5-year period. If the company spent only $42,000 in year 1, what uniform...
-
U2 Ltd is a company that manufactures high-quality musical instruments in three factories in Ireland. The instruments are very well regarded in the market and are all handmade from high-quality...
-
In each of the homeowners forms, OA) the property coverage is the same OB) the liability coverage varies OC) both the property and liability coverage are the same OD) the property coverage varies
-
A concrete wall, which has a surface area of 20 m 2 and is 0.30 m thick, separates conditioned room air from ambient air. The temperature of the inner surface of the wall is maintained at 25C, and...
-
Leighs comment about not considering decreases in inventory to be a source of long -term growth in free cash flow for Holt is: A. Inconsistent with a forecasting perspective. B. Mistaken because...
-
Give examples of EMA tools, as per the United Nations EMA classifications.
-
Five years ago a dam was constructed to impound irrigation water and to provide flood protection for the area below the dam. Last winter a 100-year flood caused extensive damage both to the dam and...
-
During February, Imtiaz Corporation, Rs. 110,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The...
-
On August 1, 2016, Stephanie Ram, a sole proprietor, started a new business, Ram Wholesale Company. The company sells refrigerators (merchandise) to various retail stores and uses the periodic...
-
(a) (60 pts) Your weight is proportional to g (mathematically: weight = mass g). Calculate your weight on the different planetary bodies listed below by filling entries in the following table. I know...
-
1. What is the nature of the industry and the business? 2. What are the major customer groups that the Bank has chosen to focus on? 3. Determine the impact of the Bank's business strategy on its...
-
what ways does a collaborative team environment contribute to or detract from your job satisfaction?
-
What is the total amount that Fess should record as bad debt expense for the year ended December 3 1 , 2 0 2 3 ?
-
Total revenues for Atlanta Clinic in 2022 was $5,000,000 ($100 50,000 visits). Total variable cost for Atlanta Clinic in 2022 was $2,500,000 ($50 50,000 visits). Total Fixed costs for Atlanta Clinic...
-
How does cultural hegemony manifest in contemporary societies, and what mechanisms perpetuate this phenomenon across different cultural contexts ?
-
When companies have a period of operating losses and thus report negative taxable income how are the income tax consequences on the financial statements reported when a tax carryback is used? How...
-
(a) Water flows through the nozzle of a garden hose. Find an expression for m in terms of line pressure P 1 , ambient pressure P 2 , inside hose diameter D 1 , and nozzle outlet diameter D 2 . Assume...
-
Warren Corporation had the following transactions in Year 1: 1. On April 1, Warren received a $30,000, 10 percent note from a customer in settlement of a $30,000 account receivable. According to the...
-
Failure to make an adjusting entry to recognize accrued salaries payable would cause which of the following? (Hint: See Tip for how to analyze the effects.) a. An understatement of expenses,...
-
Mike Lynch is the manager of an upstate New York regional office for an insurance company. As the regional manager, his compensation package comprises a base salary, commissions, and a bonus when the...
-
Like many American cities during the 1960s and 1970s, Washington, DC, experienced declining population, economic challenges, and growing social problems, as many middle-class families and businesses...
-
Think about your most rewarding (or unrewarding) experience as a volunteer or nonprofit staff member. Which of Herzberg's satisfiers and dissatisfiers were present in the environment?
-
Are the values and motivations of millennials really different from those of previous generations or do people become more alike as they proceed through various life stages?
Study smarter with the SolutionInn App