Safe at Home produces several lines of ant traps for commercial and domestic use. It sells its products to three major wholesalers, which then distribute them to the retail market. Recently new management took over the company and it would like to get an idea of the profitability of these three wholesalers: Bennie’s Wholesale, Pickens Wholesaling, and Rogers Products, Ltd. It provides you with the following information for the last year.

REQUIRED:

a. Create a customer profitability variance report by line item for Safe at Home’s three major customers.

b. Translate the results in the above table into percentage terms.

c. Create a customer profitability variance report by line item using the percentages derived in (b).

d. Which customer looks best? Why? Does your answer change any if you use percentages instead of absolute dollars?

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Safe at Home Bennie's Wholesale Pickens Wholesaling Rogers Products, Lid. Line Item Budget Actual Budget Actual Budget Actud Revenue $12,000,000 $1,500,000 $10,000,000 SI1,500,000 $15,000,000 $16,500,000 Less: Oost of god sold $5,760,000 S5,462,500 $4,500,000 $4,830,000 $7,200,000 $7,590,000 Gross margin $6,240,000 $6,037,500 $5,500,000 $6,670,000 $7,800,000 $8,910,000 Sales calls $1,500,000 $1,800,000 $1,200,000 $1,500,000 S1,800,000 $2,300,000 Order processing Shipping $1,000,000 $900,000 $850,000 $900,000 S1,200,000 $1,500,000 S750,000 $700,000 $600,000 S650,000 $800,000 S850,000 General overheod $1,800,000 S1,850,000 $1,600,000 $1,400,000 S1,900,000 $2,200,000 Total SG&A $5,050,000 S5,250,000 $4,250,000 $4.450,000 $5,700,000 $6,850,000 Profit before tax $1,190,000 $787,500 $1,250,000 $2,220,000 S2,100,000 $2,060,000 Profit percentoge 9.92% 6.85% 12.50% 19.30% 14.00% 12.48%