The following data have been gathered: Support Activity Driver Costs per Driver

Question

The following data have been gathered: Support Activity Driver Costs per Driver Unit Major refinishes Hours on jobs $ 75 Touchups Number of visits $ 120 Communication Number of calls $ 30

Builder Major Refinishes   Touchups Communication

Apline 80 150 360

Blue Ridge 35 110 205

Piola 42 115 190

(a) Assuming that each of the three customers produces gross profits of $100,000, calculate the profitability from each builder after taking into account the support activity required for each builder..

Alpine $Answer

Blue Ridge $Answer

Piola $Answer

Support Activity Costs per Driver Unit Driver Major refinishes Hours on jobs Number of visits Communication Number of call:s $ 75 120 % 30 Touchups Major Refinishes Builder Touchups Communication Apline Blue Ridge Piola 150 110 115 360 205 190 80 35 (a) Assuming that each of the three customers produces gross profits of $100,000, calculate the profitability from each builder after taking into account the support activity required for each builder. Alpine Blue Ridge $ 0 Piola $ 0

Explanation / Answer

Profitability

Alpine Blue Poila Gross profit $100,000 $100,000 $100,000 less:Major refinishes @75 (6,000) (2,625) (3,150) Touch ups @120 (18,000) (13,200) (13,800) Communication @30 (10,800) (6,150) (5,700) Proftiability $65,200 $78,025 $77,350

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