Blue Ridge Case - Activity Based Costing (ABC)

1) Profitability Analysis: voluptuous Ridge         Large          mass medium          minuscular         Total gross revenue         $308,762.00         $183,744.00         $318,024.00         $810,530.00 Manufacturing Costs         $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        Â Â ($1,646.08)         $177,049.12 Profit Margin         38.19%         33.08%         -0.52%         21.84% Note: For fine calculations please reference attached document. 2) confine action go for Blue Ridge suitcased on the analysis: The in a higher place customer profitability analysis indicates that the belittled customers have a negative profit margin. As this specialized customer base accounts for 40% of Blue Ridges entireness sales volume we advocate the following action steps be taken in hunting lodge to increase their profitability: *          cave in an on line/electronic ordering organisation for customers in order to abstract the high cost associated with entering bribe orders by Blue Ridge employees. shortly this represents 14.56% of total be with 12.23% of total cost allocated to excellent customers. *         Develop an electronic honorarium system for w ee customers, where payments are wired direc! tly into Blue Ridges swan account before the order is processed and shipped.

Currently recognise checks for small customers represent 1% of total be. *          turn over the effects on price increases for small customers. Currently, shipping cost for small customers represent 4.14% of the total costs, increasing the price for small customers could help offset the shipping costs. *         Conduct a suppose on small customer orders to help determine if a minimum order requirement can help take place the costs associated with shipping without sacrificing the high volume. *          Invest in in the buff inking technology in order to help justify increases in prices. The investment should eliminate their customer complaints and increase their demand. *         Determine the costs associated with investing in a higher quality wipe and align with an appropriate sales strategy. If you want to get a full essay, order it on our website: BestEssayCheap.com

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