Question 1

Some companies believe that as long as the sales revenue a customer generates exceeds the cost of goods sold,that the customer is profitable.However,companies incur product costs,selling costs,and administrative costs.
Required:
a.List three items that would be classified as product costs.
b.List three items that would be classified as selling costs.
c.List three items that would be classified as administrative costs.

Accepted Answer

The answer of Some companies believe that as long as...

Question 2

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory.You have gathered the following information on one of your customers:
  Required: 
a.Calculate the customer net profit.
b.Calculate the customer profit margin.

Accepted Answer

The answer of Assume you are a sales manager responsible...

Question 3

It may appear that all unprofitable customers should be dropped.However,before any action is taken,managers should evaluate all the implications of the action for the affected customer,for other customers,and for the company.
Required:
a.Explain three implications for the affected customer.
b.Explain three implications for other customers.
c.Explain three implications for the company.

Accepted Answer

The answer of It may appear that all unprofitable customers...

Question 4

Two calculations can be made to measure customer profitability: customer net profit and customer profit margin.
Required:
a.What is the formula for customer net profit?
b.What is the formula for customer profit margin?

Accepted Answer

The answer of Two calculations can be made to measure...

Question 5

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory.You have gathered the following information on one of your customers:
  Required: 
a.Calculate the customer net profit.
b.Calculate the profit margin.

Accepted Answer

The answer of Assume you are a sales manager responsible...

Quiz 17: Topic Focus Customer Profitability

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory.You have gathered the following information on one of your customers: Required: a.Calculate the customer net profit. b.Calculate the customer profit margin.

Two calculations can be made to measure customer profitability: customer net profit and customer profit margin. Required: a.What is the formula for customer net profit? b.What is the formula for customer profit margin?

Assume you are a sales manager responsible for analyzing the profitability of the customers in your territory.You have gathered the following information on one of your customers: Required: a.Calculate the customer net profit. b.Calculate the profit margin.