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 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 minute calculations please reference attached document. 2) confine action move for Blue Ridge subjectd on the analysis: The higher up customer profitability analysis indicates that the belittled customers have a negative profit margin. As this specialized customer base accounts for 40% of Blue Ridges summarise sales volume we preach the following action steps be taken in mark 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 handsome customers, where payments are wired directly into Blue ! Ridges wedge account before the order is processed and shipped.

Currently character reference checks for small customers represent 1% of total cost. *          turn all 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 venture on small customer orders to help determine if a minimum order requirement can help sweep away the costs associated with shipping without sacrificing the high volume. *          Invest in stark naked 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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