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Unformatted text preview: Warehousing costs 1,000, 000 600, 000 400, 000 Total service and promotion costs* 8,200, 000 3,891, 429 4,308, 571 Customer margins* $ 1,520,000 $ 3,668,571 $ (2,148,571) General administrative costs (untraced) 1,200, 000 Operating profit $ 320,000 *Totals are accurate. Amounts summed to get the totals are rounded to nearest dollar. b. This analysis shows that Toshi is not a profitable customer. Toshi causes disproportionately higher delivery costs. The value of each order by Toshi is lower, yet Toshi requires higher frequency of deliveries. The markup charged does not reflect this greater level of service, so the company should re-evaluate its pricing for TS deliveries or negotiate less frequent deliveries....
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This note was uploaded on 11/25/2010 for the course ACCT 33010 taught by Professor Staff during the Spring '08 term at Kent State.
- Spring '08
- Cost Accounting