Great Chocolates sells two types of candy - bars and gift boxes to two types of customers - airlines and gift shops:

Required:
1) Using the information above, prepare a customer profitability statement in absolute dollar amounts.
2) Using the information above prepare a common-size profit statement.
3) Management believes it is important to maintain the airline customers. They believe much of their gift shop demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Using the information above, what can Great Chocolates do to improve profitability?
4) Management believes it is important to maintain the airline customers. They believe much of their gift ship demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Assuming the operating costs are fixed, how much would sales of bars to the airline customers need to increase in order for Great Chocolates to achieve a break-even return on sales for the Airlines.
5) Management believes it is important to maintain the airline customers. They believe much of their gift shop demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Assuming the operating costs are fixed, how much would sales of gift boxes to the airline customers need to increase in order for Great Chocolates to achieve a break-even return on sales for the airlines.
6) Assume Great Chocolates desires a 40% return on sales. What level of profit enhancement is required to meet his profitability target at the same level of sales?

Question

Great Chocolates sells two types of candy - bars and gift boxes to two types of customers - airlines and gift shops:
 
Required:
1) Using the information above, prepare a customer profitability statement in absolute dollar amounts.
2) Using the information above prepare a common-size profit statement.
3) Management believes it is important to maintain the airline customers. They believe much of their gift shop demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Using the information above, what can Great Chocolates do to improve profitability?
4) Management believes it is important to maintain the airline customers. They believe much of their gift ship demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Assuming the operating costs are fixed, how much would sales of bars to the airline customers need to increase in order for Great Chocolates to achieve a break-even return on sales for the Airlines.
5) Management believes it is important to maintain the airline customers. They believe much of their gift shop demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Assuming the operating costs are fixed, how much would sales of gift boxes to the airline customers need to increase in order for Great Chocolates to achieve a break-even return on sales for the airlines.
6) Assume Great Chocolates desires a 40% return on sales. What level of profit enhancement is required to meet his profitability target at the same level of sales?

Quizplus · Accepted Answer

The Answer of Great Chocolates sells two types of candy - bars and gift boxes to two types of customers - airlines and gift shops:
 
Required:
1) Using the information above, prepare a customer profitability statement in absolute dollar amounts.
2) Using the information above prepare a common-size profit statement.
3) Management believes it is important to maintain the airline customers. They believe much of their gift shop demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Using the information above, what can Great Chocolates do to improve profitability?
4) Management believes it is important to maintain the airline customers. They believe much of their gift ship demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Assuming the operating costs are fixed, how much would sales of bars to the airline customers need to increase in order for Great Chocolates to achieve a break-even return on sales for the Airlines.
5) Management believes it is important to maintain the airline customers. They believe much of their gift shop demand is a result of airline passengers tasting the candy. Therefore, they do not want to drop the airlines as customers. Assuming the operating costs are fixed, how much would sales of gift boxes to the airline customers need to increase in order for Great Chocolates to achieve a break-even return on sales for the airlines.
6) Assume Great Chocolates desires a 40% return on sales. What level of profit enhancement is required to meet his profitability target at the same level of sales?

Great Chocolates Sells Two Types of Candy - Bars and Gift