Managing Customers and Time

3200 WordsApr 6, 201413 Pages
8/22/2011 ACCG301: Organisational Planning and Control LECTURE 3 Managing Customers and Time Chapters 10 (pp. 396-405) & 16 (pp. 646-651) Cost Accounting: a managerial emphasis (Horngren et al.) Rahat Munir Department of Accounting and Corporate Governance accg301@mq.edu.au 1 Learning Outcomes 1. Explain customer profitability analysis 2. Describe differences in an organisation’s revenues and costs across customers purchasing the same product 3. Explain differences in customer level costs across customers 4. Describe the ways to calculate customer costs 5. Describe customer-response time and explain the reasons for and costs of delays 6. Explain the customer waiting time 2 1 8/22/2011 Customer Profitability…show more content…
Ability to learn from customers 10 5 8/22/2011 Exercise 10-14 Customer profitability, customer-cost hierarchy Ramish electronics has only two retail and two wholesale customers. Information relating to each customer for 2011 follows (in thousands): Ramish’s annual distribution-channel costs are $38 million for wholesale customers and $7 million for retail customers. Its annual organisation-sustaining costs, such as salary for top management and general administration costs, are $65 million. There is no cause-and-effect or benefits received relationship between any cost-allocation base and organisation-sustaining costs. That is, organisation-sustaining costs could be saved only if Ramish Electronics were to completely shut down. 11 1. Calculate customer-level operating profit using the format in Exhibit 10-2. All amounts in thousands of A dollars Wholesale Retail Australia New Zealand Downunder World Revenues at list prices Price discounts Revenues (at actual prices) Cost of goods sold Gross margin Customer-level operating costs Delivery Order processing Sales visit Total cust.-level optg.costs Customer-level operating income Total Customer-level operating costs Customer-level operating income $420,000 30,000 390,000 325,000 65,000 450 800 5,600 6,850 $58,150 1.7% 14.9% $580,000 40,000 540,000 455,000 85,000 650 1,000 5,500 7,150 $77,850 1.3% 14.4% $130,000 7,000 123,000 118,000 5,000 200 200 2,300 2,700 $2,300 2.1% 1.9%
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