Minnesota Manufacturing makes a component called Upper B2040. This component is manufactured only when ordered by...

Minnesota Manufacturing makes a component called Upper B2040. This component is manufactured only when ordered by a customer, so Mississippi keeps no inventory of Upper B2040. The list price is $114 per unit, but customers who place "large" orders receive a 14% discount on price. The customers are manufacturing firms. Currently, the salespeople decide whether an order is large enough to qualify for the discount. When the product is finished, it is packed in cases of 10. If the component needs to be exchanged or repaired, customers can come back within 14 days for free exchange or repair.

information about Minnesota's five biggest customers follows:

	Customer
	A	B	C	D	E
Number of units purchased	5,200	1,200	600	4,800	8,900
Discounts given	14%	14%	0%	14%	14% on half the units
Number of orders	6	18	54	30	24
Number of cases	580	150	110	450	830
Number of rush orders	5	5	2	0	11
Number of units exchanged/repaired	15	100	11	70	260

All customers except E ordered units in the same order size. Customer E's order quantity varied, so E got a discount part of the time but not all the time.

The full cost of manufacturing a unit of Upper B2040 is $ 88. In addition, Minnesota incurs customer-level costs. Customer-level cost-driver rates are:

Order taking	$300 per order
Product handling	$14 per case
Rush-order processing	$590 per rush order
Exchange and repair costs	$70 per unit

Requirement:

Rank the customers in order of most to least profitable and prepare a customer-profitability analysis in terms of operating income. (Use parentheses or a minus sign when entering negative numbers and losses. Enter percentages rounded to two decimal places, X.XX%)

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ekkarill92 answered 1 year ago

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