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  • bachelor in business administration
    Polytechnic State University Sanluis
    Jan-2006 - Nov-2010

  • CPA
    Polytechnic State University
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Category > Accounting Posted 14 May 2017 My Price 10.00

Customer Profitability

Customer Profitability

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

100,000

30,000

70,000

Average customer representative salary

 

$35,000

$35,000

Promotion costs

$4,000,000

 

 

Average gross margin per customer

 

$ 220

$ 70

Required

a. What is the excess of gross margin over customer costs for each category of customer?

b. Write a short memo that evaluates customer profitability.

 
 

 

Answers

Alpha Geek
(8)
Status NEW Posted 14 May 2017 06:05 PM My Price 10.00

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Attachments

file 1494787562-691165_1_636301007650026571_SKI-BLU-LTD-WORKING-11-MAY-2017.xlsx preview (98 words )
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