Carmel Company has a frequent buyer program for its customers, where the customers can attain an...
Carmel Company has a frequent buyer program for its customers, where the customers can attain an “elite” level based on the number of orders and the total revenue of the orders. There are two elite levels: Platinum and Titanium. The benefits of elite membership include discounts and access to special customer service representatives who can resolve problems. The company has one full-time customer representative per 200 Titanium customers and one full-time customer representative per 2,000 Platinum customers. Customer representatives receive salaries plus bonuses of 1 percent of customer gross margin. Lighthouse spends 90 percent of its promotion costs on Titanium customers to encourage their loyalty.
| Customer Costs | Total | Titanium | Platinum | ||||||
| Number of customers | 28,000 | 6,000 | 22,000 | ||||||
| Average customer representative salary | $ | 69,000 | $ | 69,000 | |||||
| Promotion costs | $ | 2,950,000 | |||||||
| Average gross margin per customer | $ | 1,600 | $ | 330 | |||||
Required:
a. Calculate the totals of the items below for both titanium and platinum customers, as well as the excess of gross margin over customer costs for each category.
titatnium platinum
total gross margin
customer representative salaries and bonuses
promotion costs
excess of gross margin over customer cost.
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Carmel Company has a frequent buyer program for its customers,
where the customers can attain an...
Carmel Company has a frequent buyer program for its customers, where the customers can attain an...
Carmel Company has a frequent buyer program for its customers, where the customers can attain an “elite” level based on the number of orders and the total revenue of the orders. There are two elite levels: Platinum and Titanium. The benefits of elite membership include discounts and access to special customer service representatives who can resolve problems. The company has one full-time customer representative per 200 Titanium customers and one full-time customer representative per 2,000 Platinum customers. Customer representatives receive...
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time...
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receive salaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 80 percent of its promotion costs on Gold customers to encourage their loyalty. Customer Costs Total Gold Silver Number of customers 110,000 40,000 70,000 Average customer representative salary $ 80,000 $ 80,000 Promotion costs...
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time...
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receive salaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 80 percent of its promotion costs on Gold customers to encourage their loyalty. Total 68,000 Customer Costs Number of customers Average customer representative salary Promotion costs Average gross margin per customer Gold 48,000 $88,000...
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time...
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receive salaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 90 percent of its promotion costs on Gold customers to encourage their loyalty. Customer Costs Total Gold Silver Number of customers 49,000 39,000 10,000 Average customer representative salary $ 79,000 $ 79,000 Promotion costs...
Customer Costs Total Gold Silver Number of customers 110,000 40,000 70,000 Average customer representative salary $...
Customer Costs Total Gold Silver Number of customers 110,000 40,000 70,000 Average customer representative salary $ 80,000 $ 80,000 Promotion costs $ 4,900,000 Average gross margin per customer $ 710 $ 310 Required: a. Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin over customer costs for each category. (Do not round intermediate calculations.) Gold Silver total gross margin customer representative salaries and bonuses promotion costs excess...
Starcups Coffee Company is launching a new sustainability Initiative that would reward customers for purchasing a...
Starcups Coffee Company is launching a new sustainability Initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $100 for the reusable cup and would receive a 25 percent discount each time they return with the cup to buy a cup of coffee. Each week Starcups serves 40,000 customers who purchase an average of 2.5 cups of coffee per week (100,000 cups totall. Starcups's contribution margin income statement for a typical...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages...
Cancico Communications has supplied the following data for use
in its ABC system:
Overhead Costs
Wages and salaries
$
295,000
Other overhead costs
163,000
Total overhead costs
$
458,000
Activity Cost Pool
Activity Measure
Total Activity
Direct labour support
Number of direct labour-hours
12,110
DLHs
Order processing
Number of orders
500
orders
Customer support
Number of customers
120
customers
Other
These costs are not allocated
to products or customers
NA
Distribution of Resource Consumption
across Activity Cost Pools
Direct
Labour...
RW White has supplied the following data for use in its activity based costing systemm Wages and ...
RW White has supplied the following data for use in its activity based costing systemm Wages and Salaries 700,000 $1,100,000 Direct Labor Support Order Processing Customer Support Other Activity Measure Number of direct labor-hours Number of orders Number of Customers This is an organization- Sustaining activity 10,000 DLHs 500 Orders 100 customers Not applicable Distribution of Resource Consumption across Activities Direct Labor Order Processing 35% 15% Customer Wages and Salaries Other Overhead Costs 30% 2 5% 25% 20% Other 10%...
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages...
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries Other overhead costs Total overhead costs $ 300,000 100,000 $ 400,000 Activity Cost Pool Supporting direct labor Order processing Customer support Other Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization- sustaining activity Total Activity for the Year 20,000 DLHS 400 orders 200 customers Not applicable Distribution of Resource Consumption Across Activities Supporting Order...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $ 295,000 Other overhead costs 163,000 Total overhead costs $ 458,000 Activity Cost Pool Activity Measure Total Activity Direct labour support Number of direct labour-hours 12,110 DLHs Order processing Number of orders 500 orders Customer support Number of customers 120 customers Other These costs are not allocated to products or customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour...
SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receive salaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 80 percent of its promotion costs on Gold customers to encourage their loyalty. Total 68,000 Customer Costs Number of customers Average customer representative salary Promotion costs Average gross margin per customer Gold 48,000 $88,000...
Starcups Coffee Company is launching a new sustainability Initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $100 for the reusable cup and would receive a 25 percent discount each time they return with the cup to buy a cup of coffee. Each week Starcups serves 40,000 customers who purchase an average of 2.5 cups of coffee per week (100,000 cups totall. Starcups's contribution margin income statement for a typical...
Cancico Communications has supplied the following data for use
in its ABC system:
Overhead Costs
Wages and salaries
$
295,000
Other overhead costs
163,000
Total overhead costs
$
458,000
Activity Cost Pool
Activity Measure
Total Activity
Direct labour support
Number of direct labour-hours
12,110
DLHs
Order processing
Number of orders
500
orders
Customer support
Number of customers
120
customers
Other
These costs are not allocated
to products or customers
NA
Distribution of Resource Consumption
across Activity Cost Pools
Direct
Labour...
RW White has supplied the following data for use in its activity based costing systemm Wages and Salaries 700,000 $1,100,000 Direct Labor Support Order Processing Customer Support Other Activity Measure Number of direct labor-hours Number of orders Number of Customers This is an organization- Sustaining activity 10,000 DLHs 500 Orders 100 customers Not applicable Distribution of Resource Consumption across Activities Direct Labor Order Processing 35% 15% Customer Wages and Salaries Other Overhead Costs 30% 2 5% 25% 20% Other 10%...
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries Other overhead costs Total overhead costs $ 300,000 100,000 $ 400,000 Activity Cost Pool Supporting direct labor Order processing Customer support Other Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization- sustaining activity Total Activity for the Year 20,000 DLHS 400 orders 200 customers Not applicable Distribution of Resource Consumption Across Activities Supporting Order...
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