Class Notes (808,113)
BU247 (83)
Lecture

# March 06 2014 bu247.docx

3 Pages
76 Views

School
Wilfrid Laurier University
Department
Course
BU247
Professor
Esther Maier
Semester
Winter

Description
March 06 2014 bu247 5-18 Hampstead Company A) What is the rate per house for each order entry employee for Hampstead’s Activity based costing system? \$873 600/20 = \$43680 (cost per employee) \$43680/1560 (practical capacity) = \$28.00 per hour b) On average, it takes an order entry employee about 0.1 hour to enter the basic customer information for a manual customer order. In addition, manual orders require an operator to spend an additional 0.02 hours to enter each line item on the order. An operator spends an average 0.06 hours to check the information on an electronic order, but no further entries are needed for specific line items. What is the order entry cost associated with each of the following two orders? -An manual order with 10 line items [0.1 (basic info) + 10 x 0.02] x \$28.00 = \$8.40 to process one manual -An electronic order with 10 line items 0.06 x \$28.00 = \$1.68 to process one electronically Give customer incentive to do electronically and also give the customer a discount so that they would be interested. 5-19 Wright Company, a new systems consulting company is concerned about the profitability of its customers. The company has prepared the following data: Customer Profit Customer Profit 1 -221 000 14 83000 2 -40000 15 -179000 3 -143000 16 14000 4 217000 17 50 000 5 22000 18 -191000 6 9000 19 90 000 7 101000 20 30 000 8 -200000 21 -10 000 9 259000 22 87 000 10 96000 23 -158000 11 208000 24 -100 000 12 233000 13 264000 -sort them by the highest profit 264 000 end -200 000 -find the cumulative profit/ loss (such as the difference) 264 000 en 858 000 -Customer rank 1- 25 -customer ratio 4% end 100% -cumulate % 31% end 100% = (C4/\$C\$28) Step 1: enter the customer code in column A and profit in Column B Step 2: sort the data by profits (highest to lower) Step 3: copy of the profit of the most profitable customer into C Step 4: calculate the cumulative profit in column C. The last cell = total profit Step 5: Input the rank for each customer in terms of profit Step 5 calculate the ratio of customer profit to total profit in column E Step 6: calculate the cumulate percentage: rank / total customers Step 7: Graph the data 5-22 Saunders Company has recently become aware of the large total discounts on its orders and would like to know the impact on profit. The company computed its operating profits as follows: Amount 10% increase 2% decrease (price) Net sales after discounts \$200 000 200 000 x 10% = 220 000 \$196 000 (200 000 x 98%) Variable costs 80 000 80 000 80 000 Contribution margin \$120 000 \$140 000 \$116 000 Fixed costs 70 000 70 000 70 000 Operating profits \$50 000 \$70 000 \$46 000 % increase \$20 000/50 40% 000 %decrease\$ 4000/\$50 4000/50 000
More Less

Related notes for BU247

OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Join to view

OR

By registering, I agree to the Terms and Privacy Policies
Just a few more details

So we can recommend you notes for your school.