Question: LeRoy was looking back on his multiple years in the grocery business, realizing how much had changed in his company's customer service offerings. Originally, customers'
LeRoy was looking back on his multiple years in the grocery business, realizing how much had changed in his company's customer service offerings. Originally, customers' only option was to shop in-store for themselves. The store now offered online shopping with in-store pick-up, curbside delivery, and direct shipping to customers' homes. The industry had come a long way, but his business profits hadn't kept pace. His aim was to calculate profitability by customers using different shopping approaches, wondering if the company needed to change pricing for the different services. His team gathered the following information. The three costs listed below COGS are directly traceable to the shopping approaches, with amounts listed as appropriate. Customer Shopping Method Online Shopping Total In-Store Shopping In-Store Pick-up Curbside Pick-up Deliver to Home Sales $12,000,000 $8,400,000 $960,000 $600,000 $2,040,000 Cost of goods sold 10,360,000 7,250,000 810,000 525,000 1,775,000 Pick-n-Pack costs 240,000 50,000 40,000 150,000 Temporary storage costs 25,000 5,000 5,000 15,000 Customer shipping costs 20,000 20,000 General and administrative costs 950,000 Selling expenses 250,000 Required For each category of service offering, determine the gross margin and gross margin percentage. Rank the different categories by their gross margin percentages. Determine the segment margin for each ca
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