Ascent Ltd.is a company that manufactures climbing rope for mountaineering and rescue operations.They sell various types of rope to four distributors: Alpine Adventures Corporation (AAC), Mountain Supply Coop (MSC), Bigfoot Safety Supply Ltd.(BSS), Elite Mountain Equipment (EME).Currently Ascent Ltd.does not charge extra fees for any order and delivery related costs.The company president, Rolf Resche, wants an ABC customer analysis done to determine if a change in pricing policy is warranted.The customer-level cost driver rates are:
Rope costs $2 per metre to produce; and, sells for an average price of $3 per metre in units of 100 metres.The following table presents customer metrics:
Required:
Prepare a customer profitability report for the president using ABC analysis.Present the profit as a percentage of sales for each customer at the end of the report.

Question

Ascent Ltd.is a company that manufactures climbing rope for mountaineering and rescue operations.They sell various types of rope to four distributors: Alpine Adventures Corporation (AAC), Mountain Supply Coop (MSC), Bigfoot Safety Supply Ltd.(BSS), Elite Mountain Equipment (EME).Currently Ascent Ltd.does not charge extra fees for any order and delivery related costs.The company president, Rolf Resche, wants an ABC customer analysis done to determine if a change in pricing policy is warranted.The customer-level cost driver rates are:
  Rope costs $2 per metre to produce; and, sells for an average price of $3 per metre in units of 100 metres.The following table presents customer metrics:
  Required:
Prepare a customer profitability report for the president using ABC analysis.Present the profit as a percentage of sales for each customer at the end of the report.

Quizplus · Accepted Answer

The Answer of Ascent Ltd.is a company that manufactures climbing rope for mountaineering and rescue operations.They sell various types of rope to four distributors: Alpine Adventures Corporation (AAC), Mountain Supply Coop (MSC), Bigfoot Safety Supply Ltd.(BSS), Elite Mountain Equipment (EME).Currently Ascent Ltd.does not charge extra fees for any order and delivery related costs.The company president, Rolf Resche, wants an ABC customer analysis done to determine if a change in pricing policy is warranted.The customer-level cost driver rates are:
  Rope costs $2 per metre to produce; and, sells for an average price of $3 per metre in units of 100 metres.The following table presents customer metrics:
  Required:
Prepare a customer profitability report for the president using ABC analysis.Present the profit as a percentage of sales for each customer at the end of the report.