SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representativeper 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receivesalaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 90 percent of its promotion costs on Gold customers toencourage their loyalty.Customer Costs.Number of customersAverage customer representative salaryPromotion costsAverage gross margin per customerTotal133,000$4,200,000Required A Required BRequired:a. Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin over customer costsfor each category.b. Which customers are more profitable?Complete this question by entering your answers in the tabs below.GoldGold33,000$73,000$ 675Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin overcustomer costs for each category. (Do not round intermediate calculations.)Silver< PrevSilver100,000$ 73,000$ 24016 of 18wwwwwwwNext >

Gross MarginGross margin is a financial indicator that compares income from sales to cost of goods…

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 Number of customers Average customer representative salary. Promotion costs Average gross margin per customer. Total 133,000 $4,200,000 Gold 33,000 $73,000 $ 675 Silver 100,000 $ 73,000 $ 240 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. b. Which customers are more profitable?

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 Number of customers Average customer representative salary. Promotion costs Average gross margin per customer. Total 133,000 $4,200,000 Gold 33,000 $73,000 $ 675 Silver 100,000 $ 73,000 $ 240 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. b. Which customers are more profitable?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 6E: Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing...

See similar textbooks

Similar questions

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. Number of customers Average customer representative salary Promotion costs Average gross margin per customer Total 133,000 $4,200,000 Gold 33,000 $73,000 $ 675 $ Complete this question by entering your answers in the tabs below. Total gross margin Customer representative salaries & bonuses Promotion costs Excess of gross margin over customer cost 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. b. Which customers are more profitable? Silver…
Which of the following is an example of Step Costs? Select one: 1. A company’s advertisement assistant is paid $100 for every new partner who agrees to distribute the company’s marketing materials. 2. The salary of a company’s social media manager is $2,500 per month. The monthly salary of the head of the marketing department is $4,000. 3. A company employs a salesperson whose salary is $3,000 per month. Once the monthly sales exceed $100,000, the salesperson receives the commission of 8% of the sales made. 4. A sales company needs one manager for up to 100 clients, 2 managers for 101 to 200, and so forth as the number of clients increases.
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 twoelite 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 representa tive per 2,000 Platinum customers. Customer representatives receive salaries plus bonuses of 2 percent of customer gross margin. Carmel spends 70 percent of its promotion costs on Titanium customers to encourage their loyalty
Bobby's Inc. operates a chain of restaurants across North Carolina. Each restaurant employs ten people; one is a manager paid a salery plus a bonus equal to 2 percent of sales. Other employees three cooks, one dishwasher, and five servers, are paid salaries. Each manager is budgeted $4,000 per month for advertising costs. Required Classify each of the following costs incurred by Bobby's Inc. as fixed, variable, or mixed: a Advertising costs relative to the number of customers for a particular restaurant. b. Rental costs relative to the number of restaurants c. Cooks' salaries at a particular location relative to the number of customers. Cost of supplies (cups, plates, spoons, etc.) relative to the number of customers. Manager's compensation relative to the number of customers. Servers salaries relative to the number of restaurants.
determine the dollar value of an employee award who had a basic salary of BDT 20,000m incentive award of 7%. Assume that both the company and employee have excellent performance
Advanced Coding is a software development company that sells specialized practice management software to large professional services firms. Management has decided to analyze certain costs related to sales to determine per-customer profitability and to plan for future sales efforts. These costs include sales commissions and overhead related to the corporate jet expenses. They have determined that $200,000 of overhead costs related to the corporate jet should be assigned to individual customers. Sales representatives are paid a commission of 5% on Gross Profit (sales less costs to develop the software). In relation to overhead costs, the sales staff used the corporate jet at a cost of $1,000 per hour for trips to customers as follows: Customer #1: 50 hours Customer #2: 43 hours Customer #3: 15 hours Customer #4: 8 hours Customer #5: 10 hours Gross profit per customer is as follows: Customer #1: $340,000 Customer #2: $240,000 Customer #3: $60,000 Customer #4: $80,000 Customer #5: $60,000…
Better Finance (previously Bill Float), based in San Francisco, California, provides leasing and credit solutions to consumers and small businesses. If Better Finance wants to distribute $38,000 worth of overhead by sales. New customer sales (NCS) Current customer new sales (CCNS) Current customer loan extension sales $ 4,235,000 4,235,000 3,630,000 (CCLES) $12,100,000 Calculate the overhead expense for each department. Overhead expense New customer sales Current customer new sales Current customer loan extension sales
LPC Bank operates a call centre to deal with customer queries. The following information is available: 120 call centre operators work in teams. Each team has a supervisor. There are eight supervisors. Call centre operators are paid RM8 per hour and supervisors are paid RM15 per hour. All staff work a 36-hour week. Bonuses are paid to call centre operators if they achieve efficiency and quality targets. For example, if 100% efficiency and quality are achieved the call centre operator receives a bonus of 20% of their basic pay. Bonuses are paid to supervisors if their teams achieve targets. For example, if the team achieves the target of 100% then the supervisor receives a bonus of 20% of their basic pay. Targets and bonuses for call centre operators and supervisors are given in the table below: Target achieved 100% 95% 90% Bonus paid 20% 15% 10% In week 12 the number of call centre operators and supervisors achieving targets was as follows: Target…
Better Finance (previously Bill Float), based in San Francisco, California, provides leasing and credit solutions to consumers and smal businesses. If Better Finance wants to distribute $41,000 worth of overhead by sales. $ 4,960, 900 4, 960, 800 New customer sales (NCS) Current customer new sales (CCNS) Current customer loan extension sales (CCLES) 2,480, 000 $12, 400, 000 Calculate the overhead expense for each department. Overhead expense New customer sales Current customer new sales Current customer loan extension sales
R.p Within a company there is a (micro)economy that is monitored by the accounting procedures. In terms of the accounts, the various departments "produce" costs, some of which are internal and some of which are direct costs. This problem shows how an open Leontief model can be used to determine departmental costs. The sales department of an auto dealership charges 10% of its total monthly costs to the service department, and the service department charges 20% of its total monthly costs to the sales department. During a given month, the direct costs are $68,600 for sales and $49,000 for service. Find the total costs of each department. (Round your answers to the nearest whole number.) sales department $service department $
Ethics and the Manager, Understanding the Impact of Percentage Completion on Profit—Weighted-Average Method Gary Stevens and Mary James are production managers in the Consumer Electronics Division of General Electronics Company, which has several dozen plants scattered in locations throughout the world. Mary manages the plant located in Des Moines, Iowa, while Gary manages the plant in El Segundo, California. Production managers are paid a salary and gel an additional bonus equal to 5% of their base salary if the entire division meets or exceeds its target profits for the year. The bonus is determined in March after the company’s annual report has been prepared and issued to stockholders. Shortly after the beginning of the new year, Mary received a phone call from Gary that went like this: The final processing department in Mary’s production facility began the year with no work in process inventory. During the year, 210,000 units were transferred in from the prior processing department…
Case #2 - General Electronics CompanyGary Stevens and Mary James are production managers in the ConsumerElectronics Division of General Electronics Company, which has severaldozen plants scattered in locations throughout the world. Mary manages theplant located in Des Moines, Iowa, while Gary manages the plant in ElSegundo, California. Production managers are paid a salary and get anadditional bonus equal to 5% of their base salary if the entire division meetsor exceeds its target profits for the year. The bonus is determined in Marchafter the company’s annual report has been prepared and issued tostockholders.Shortly after the beginning of the new year, Mary received a phone call fromGary that went like this:1. Gary:How’s it going, Mary?2. Mary:Fine, Gary. How’s it going with you?3. Gary:Great! I just got the preliminary profit figures for the division for last yearand we are within $200,000 of making the year’s target profits. All we have to dois pull a few strings, and we’ll be over…