Customer profitability, customer-cost hierarchy. Enviro-Tech has only two retail and two whole- sale customers. Information relating to each customer for 2017 follows (in thousands): Wholesale Customers Retail Customers North America South America Wholesaler Wholesaler Revenues at list prices Discounts from list prices Cost of goods sold Delivery costs Order processing costs $375,000 25,800 285,000 4,550 3,820 6,300 $590,000 47,200 510,000 6,710 Green Energy Global Power $175,000 8,400 144,000 2,230 2,180 2,620 $130,000 590 95,000 2,145 1,130 1,575 5,980 2,620 Cost of sales visit Enviro-Tech's annual distribution-channel costs are $33 million for wholesale customers and $12 million for retail customers. The company's annual corporate-sustaining costs, such as salary for top management and general-administration costs are $48 million. There is no cause-and-effect or benefits-received rela- tionship between any cost-allocation base and corporate-sustaining costs. That is, Enviro-Tech could save corporate-sustaining costs only if the company completely shuts down.

Customer profitability, customer-cost hierarchy. Enviro-Tech has only two retail and two whole- sale customers. Information relating to each customer for 2017 follows (in thousands): Wholesale Customers Retail Customers North America South America Wholesaler Wholesaler Revenues at list prices Discounts from list prices Cost of goods sold Delivery costs Order processing costs $375,000 25,800 285,000 4,550 3,820 6,300 $590,000 47,200 510,000 6,710 Green Energy Global Power $175,000 8,400 144,000 2,230 2,180 2,620 $130,000 590 95,000 2,145 1,130 1,575 5,980 2,620 Cost of sales visit Enviro-Tech's annual distribution-channel costs are $33 million for wholesale customers and $12 million for retail customers. The company's annual corporate-sustaining costs, such as salary for top management and general-administration costs are $48 million. There is no cause-and-effect or benefits-received rela- tionship between any cost-allocation base and corporate-sustaining costs. That is, Enviro-Tech could save corporate-sustaining costs only if the company completely shuts down.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter10: Forecasting Financial Statement

Section: Chapter Questions

Problem 12PC

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