SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representativeper 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receivesalaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 90 percent of its promotion costs on Gold customers toencourage their loyalty.Customer CostsNumber of customersAverage customer representative salaryPromotion costsAverage gross margin per customerRequired A Required BTotal121,000$5,000,000Total gross marginCustomer representative salaries &bonusesRequired:a. Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin over customer costsfor each category.b. Which customers are more profitable?Complete this question by entering your answers in the tabs below.Promotion costsExcess of gross margin over customercostGold41,000$ 81,000$715Answer is not complete.< Required ASilver80,000$ 81,000$Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin overcustomer costs for each category. (Do not round intermediate calculations.)GoldSilver320Required B >

Lets understand the basics. We are required to calculate which customer is more profitable for the…

SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receive salaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 90 percent of its promotion costs on Gold customers to encourage their loyalty. Customer Costs Number of customers Average customer representative salary Promotion costs Average gross margin per customer Total 121,000 $5,000,000 Gold 41,000 $ 81,000 $ 715 Silver 80,000 $ 81,000 $ 320 Required: a. Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin over customer cost for each category. b. Which customers are more profitable? Answer is not complete.

SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative per 10,000 Silver customers. Customer representatives receive salaries plus bonuses of 10 percent of customer gross margin. SkiBlu spends 90 percent of its promotion costs on Gold customers to encourage their loyalty. Customer Costs Number of customers Average customer representative salary Promotion costs Average gross margin per customer Total 121,000 $5,000,000 Gold 41,000 $ 81,000 $ 715 Silver 80,000 $ 81,000 $ 320 Required: a. Calculate the totals of the items below for both gold and silver customers, as well as the excess of gross margin over customer cost for each category. b. Which customers are more profitable? Answer is not complete.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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