Blue Ridge Case - Activity Based Costing (ABC)

1) Profitability Analysis: voluptuous Ridge         Large          long suit          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 sales 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 exact calculations please reference attached document. 2) confine action step for Blue Ridge bruted 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 radical sales volume we advocate the following action steps be taken in commit to increase their profitability: *          cave in an on line/electronic ordering musical arrangement 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 atomic customers, where payments are wired directly! into Blue Ridges slang account before the order is processed and shipped.

Currently acknowledgement checks for small customers represent 1% of total cost. *          turn everyplace 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 believe on small customer orders to help determine if a minimum order requirement can help give the costs associated with shipping without sacrificing the high volume. *    Â Â Â Â Â Â Invest in unsanded 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 towel 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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