Customer profitability, distribution. Green Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at $20 per case and sells to retail customers at a list price of $26 per case. Data pertaining to the five customers are:
Green Paper Delivery’s five activities and their cost drivers are:
Customer 2 3 4 1,830 31,200 1,950 Cases sold 6,780 44,500 $26 $26 $26 $26 $26 List selling price Actual selling price $26 $25.20 $24.30 $25.80 $23.90 Number of purchase orders 10 18 35 16 35 Number of customer visits 3 5 12 4 12 Number of deliveries 12 28 65 25 35 Miles traveled per delivery 14 6 45 Number of expedited deliveries
Activity Cost Driver Rate $90 per purchase order $75 per customer visit $3 per delivery mile traveled $1.20 per case sold $250 per expedited delivery Order taking Customer visits Deliveries Product handling Expedited deliveries
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