What is the relationship between customer profitability analysis and ABC?
What will be an ideal response?
ABC relies on a cost hierarchy of volume-, batch-, product-, customer-, and facility-related costs. In customer profitability analysis, the focus is on the customer-related costs.
To use ABC, the traditional steps of determining the customer-related activities, the appropriate cost drivers, and then the costs per unit of activity still exist. Once the costs are developed for the activities, key customers can be analyzed. The first step in such an analysis is developing an income statement for each customer that shows not only the revenue from the customer and the cost of the products sold but also the costs related to each customer-related activity used. Those with losses are problems.
A second analysis showing each of the key customer-related costs as a percent of gross margin for each customer being analyzed and comparing these percentages against a company norm for each customer-related cost can be prepared. These relative measures are more effective than the dollar figures since significant deviations from the norm are more obvious, e.g., the norm for one item is 2 percent and a customer's percentage is 10 percent.
This analysis can be expanded to look for trends in usage-was this a one-time aberration or has the problem continued for a while and it is growing.
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Answer the following statements true (T) or false (F)
1. A job diagnostic survey can be used to identify problems with a job's motivational characteristics and help determine if a job redesign is appropriate. 2. Reinforcement theory suggests behavior tends to be repeated if it has positive consequences and tends not to be if it has negative consequences. 3. The use of reinforcement theory to change human behavior is called behavior alteration. 4. Something that inhibits a given behavior can be called reinforcement.
Which of the following is not true of staple merchandise categories?
A. They consist of items that are in continuous demand over an extended time period. B. The demand for these categories is predictable. C. Because their sales are relatively steady from day-to-day, a periodic inventory system is used. D. The number of new product introductions in these categories is limited. E. Merchandise planning systems for these categories focus on continuous replenishment.
What is the most common way for two people to touch one another during a business situation?
Fill in the blank(s) with the appropriate word(s).
Camp Corporation purchased 8,500 shares of Tent Corporation common stock for $80 per share on January 1, 2014. Tent reported net income of $220,000 for 2014 and paid dividends of $90,000 during 2014. As of December 31, 2014, the market value of Tent Corporation common stock was $80 per share. Assuming the shares owned by Camp represent 30 percent of the total outstanding stock of Tent, Camp
Corporation should report the long-term investment on December 31, 2014, at a carrying value of A) $641,000. B) $680,000. C) $719,000. D) $810,000.