Healthy Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled...

  

 

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Healthy Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at $12 per case and sells to retail customers at a list price of $14 50 per case Data pertaining to the five customers are: E (Click the icon to view the data) Healthy Paper Delivery's five activities and their cost drivers are E(Cick the icon to view the activities and cost divers.) O Data Table - X Read the cequirements O Data Table ch of the five retail customers now being examined (1. 2. 3, 4. Customer 1 2 3 4 he operating income for each customer (Complete all answer b Cases sold 1,800 8,780 65,700 33,700 2,300 2 3 4 5 Activity Cost Driver Rate List selling price $14.50 $14.50 $14 50 $14 50 $14.50 Order taking $140 per purchase order Actual selling price $14.50 $14.25 13 20 $14.01 $13.04 Customer visits 590 per customer visit Number of purchase orders 13 31 39 29 32 Deliveries $1 per delivery mile traveled Number of customer visits 3 1. 8 3 4 Product handling $0.70 per case sold Number of deliveries 15 69 32 41 38 Expedited deliveries 5350 per expedited delivery Miles traveled per delivery 22 6 6 41 Number of expedited deliveries 3 Print Done then click Check Answer. Print t Done Requirements 1. Compute the customer-level operating income of each of the five retail customers now being examined (1, 2, 3, 4, and 5). Comment on the results. 2. What insights do managers gain by reporting both the list selling price and the actual selling price for each customer? 3. What factors should managers consider in deciding whether to drop one or more of the five customers? Print Done Healthy Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at $12 per case and sells to retail customers at a list price of $14 50 per case Data pertaining to the five customers are: E (Click the icon to view the data) Healthy Paper Delivery's five activities and their cost drivers are E(Cick the icon to view the activities and cost divers.) O Data Table - X Read the cequirements O Data Table ch of the five retail customers now being examined (1. 2. 3, 4. Customer 1 2 3 4 he operating income for each customer (Complete all answer b Cases sold 1,800 8,780 65,700 33,700 2,300 2 3 4 5 Activity Cost Driver Rate List selling price $14.50 $14.50 $14 50 $14 50 $14.50 Order taking $140 per purchase order Actual selling price $14.50 $14.25 13 20 $14.01 $13.04 Customer visits 590 per customer visit Number of purchase orders 13 31 39 29 32 Deliveries $1 per delivery mile traveled Number of customer visits 3 1. 8 3 4 Product handling $0.70 per case sold Number of deliveries 15 69 32 41 38 Expedited deliveries 5350 per expedited delivery Miles traveled per delivery 22 6 6 41 Number of expedited deliveries 3 Print Done then click Check Answer. Print t Done Requirements 1. Compute the customer-level operating income of each of the five retail customers now being examined (1, 2, 3, 4, and 5). Comment on the results. 2. What insights do managers gain by reporting both the list selling price and the actual selling price for each customer? 3. What factors should managers consider in deciding whether to drop one or more of the five customers? Print Done