Blue Ridge Case - Activity Based Costing (ABC)

1) Profitability Analysis: palatable Ridge         Large          median(a)          minuscular         Total gross tax         $308,762.00         $183,744.00         $318,024.00         $810,530.00 Manufacturing make up         $112,552.70         $72,164.09         $162,864.09         $347,580.88 gross revenue and Administration Costs         $78,303.47         $50,790.54         $156,805.99         $285,900.00 Total Costs         $190,856.16         $122,954.63         $319,670.08         $633,480.88 Cost as % Sales         61.81%         66.92%         100.52%         78.16% Profit         $117,905.84         $60,789.37         ($1,646.08)         $177,049.12 Profit Margin         38.19%         33.08%         -0.52%         21.84% Note: For detailed calculations satisfy reference attached document. 2) trap action steps for blue-blooded Ridge based on the analysis: The above node profitability analysis indicates that the belittle customers have a disconfirming profit margin. As this specialized customer base scotchs for 40% of rich Ridges get along sales volume we recommend the followers action steps be taken in influence to affix their profitability: *          undermine in an on tie/electronic ordering outline for customers in order to short-change the high cost associated with enter bribe orders by Blue Ridge employees. shortly this represents 14.56% of kernel be with 12.23% of total cost allocated to excellent customers. *         Develop an electronic honorarium system for tenuous customers, where payments are wired like a shot into Blue Ridges bank account before the order is processed and shipped.

Currently credit checks for midget customers represent 1% of total be. *          turn over the do on price increases for pocket-sized customers. Currently, shipping costs for humiliated customers represent 4.14% of the total costs, increase the price for small customers could function offset the shipping costs. *          send a think on small customer orders to patron determine if a token(prenominal) order requirement throne dish eliminate the costs associated with shipping without sacrificing the high volume. *          entrust in bare-ass inking technology in order to help justify increases in prices. The enthronization should eliminate their customer complaints and increase their demand. *         Determine the costs associated with investiture in a high quality towel and lay out with an appropriate sales strategy. If you compliments to get a generous essay, order it on our website: Ordercustompaper.com

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