10 (10 points) Cheng Corp collected the following data for three customers HS AD BW Gross sales $50,000 $65,000 $80,000 Sales discountsa 2 3 4 Number of orders 100 312 125 Number of deliveries 10 80 50 Expedited orders 0 2 5 Sales visits 1 12 4 aSales discounts are applied to customer Gross Sales Cheng Corp gathered the following data pertaining to activities Activity Cost Driver and Rate Order processing $ 75 per order Delivery $ 300 per delivery Expedited orders $ 500 per order Sales visits $ 800 per visit a Calculate the Operating Income for each customer above b Based on this analysis, which customer is most important to Chengs long term profitability Explain why you believe this customer to be most important

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Question: 10. (10 points) Cheng Corp. collected the following data for three customers. HS AD BW Gross sales $50,000 $65,000 $80,000 Sales discountsa 2% 3% 4%

10. (10 points) Cheng Corp. collected the following data for three customers.

HS	AD	BW
Gross sales	$50,000	$65,000	$80,000
Sales discountsa	2%	3%	4%
Number of orders	100	312	125
Number of deliveries	10	80	50
Expedited orders	0	2	5
Sales visits	1	12	4

aSales discounts are applied to customer Gross Sales Cheng Corp. gathered the following data pertaining to activities:

Activity	Cost Driver and Rate
Order processing	$ 75 per order
Delivery	$ 300 per delivery
Expedited orders	$ 500 per order
Sales visits	$ 800 per visit

a. Calculate the Operating Income for each customer above. b. Based on this analysis, which customer is most important to Chengs long-term profitability? Explain why you believe this customer to be most important.

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