Gripu Report

Fairly Tetile Co

1. Detarmine the profitability of each customer group. Show all calculations and discuss the key assumptions underlying your profitability figures. Use the following steps:

1) (copy the question)

Please describe explanation about procedure (briefly) and results, but briefly

Table 5: The manufacturing cost of Towels (HK$)

Line 1: Towels | Large | Medium | Small |

Material | 372,451 | 225,659 | 379,348 |

Labor | 255,044 | 154,593 | 286,812 |

Manf. Overhead | 154,243 | 93,414 | 175,121 |

Manf. Cost of Towels | 781,738 | 473,667 | 841,281 |

2) (copy the question)

Please describe explanation about procedure (briefly) and results, but briefly

Please describe how to calculate “Other”. I calculate based on the number of sales unites.

Table 6: Title (HK$)

Line 1: Towels | Large | Medium | Small |

Inking | 124,857 | 73,648 | 147,697 |

Dyeing | 17,373 | 8,405 | 10,429 |

Embroidery | 58,535 | 63,751 | 288,737 |

Other | 1 | 1 | 1 |

3) Determine the selling and administrative costs for each group.

This process was one of complex ones: After dividing selling and administrative costs to various activity types, total cost of each activity then allocated by the total amount of activity driver base to identify the activity driver rates. Based on the table 4B, basis for distributing costs of Functions, all of the administrative and selling costs were assigned to every client group based on their activity consumption

Table 7: The activities cost per each driver

Re-assigned to Customer- | HK$1,000 of: | |

Related Activities: | Shipping | Sales | Marketing | Other | Total | cost per each driver | |

Entering Purchase Orders | | 656.7 | | 52.7 | 709.4 | 0.116 | |

Commissions | | 179.1 | | | 179.1 | 179.1 (Medium) | * only for medium |

Shipping Activities | 150 | | | 79.05 | 229.05 | 0.0352 | |

Invoicing | | | | 105.4 | 105.4 | 0.0188 | |

Cost to Make Sales Calls | | 298.5 | | 52.7...