The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

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Answer 1

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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The following were selected from among the transactions completed by Babcock Company during November of the current year: Nov. 3 Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $37,680. The cost of the goods sold was $22,600. 5 Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. 6 Returned merchandise with an invoice amount of $13,500 ($18,000 list price less trade discount of 25%) purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the goods sold was $9,400. 13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14 Sold merchandise with a list price of $236,000 to customers who used VISA and who redeemed $8,000 of pointof- sale coupons. The cost…

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Answer 2

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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Answer 3

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

2.

To determine

To identify: The distribution channel company would close.

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Answer 6

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

Answer 7

Chapter 14, Problem 14.35P

1.

To determine

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

Answer 8

2.

To determine

To identify: The distribution channel company would close.

Answer 9

2.

To determine

To identify: The distribution channel company would close.

Answer 10

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Answer 11

3.

To determine

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 14 - Prob. 14.1Q Ch. 14 - Why is customer-profitability analysis an...Ch. 14 - Prob. 14.3Q Ch. 14 - A customer-profitability profile highlights those...Ch. 14 - Give examples of three different levels of costs...Ch. 14 - What information does the whale curve provide?Ch. 14 - A company should not allocate all of its corporate...Ch. 14 - What criteria might managers use to guide...Ch. 14 - Once a company allocates corporate costs to...Ch. 14 - A company should not allocate costs that are fixed...

The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

To compute: The operating income for each distribution channel as percentage of revenue after assigning customer level cost, distribution channel cost and corporate cost.

To identify: The distribution channel company would close.

To explain: If corporate cost is allocated to division, explain the benefit of allocating corporate cost to division and actions that can be taken on the basis of this.

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Chapter 14 Solutions