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Unformatted text preview: o 80% of profits come from 20% of customers c10d469159acce7ccb49a0fb8bcee976a75749ca.doc PAGE 1 OF 2 ACCT 250 ACCOUNTING FOR DECISION MAKING NOTES CHAPTER 5B SPRING 2008 o 20% of customers are actually unprofitable a) Customer types b) How do we do it? Use ABC as weve learned it to calculate the cost of product sold to customer Extend ABC to period costs determine costs of serving customer Calculate customer profit: Sales less ABC COGS less: ABC service costs Robust example on pages 139 to 141 c) Why do it? Identify profitable customers Identify unprofitable customers Customer life-time value (CLV) c10d469159acce7ccb49a0fb8bcee976a75749ca.doc PAGE 2 OF 2...
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This note was uploaded on 04/18/2008 for the course ACCTG 250 taught by Professor Rabe during the Spring '08 term at Luther.
- Spring '08
- Decision Making