As companies shift from a product-centric focus to a customer-centric focus, a myth that almost all current customers are profitable needs to be replaced with the truth. Some high-demanding customers may indeed be unprofitable! Here’s the basic problem. With accounting’s traditional product gross profit margin reporting, managers can’t see the more important and relevant “bottom half” of the total income statement picture–all the profit margin layers that exist and should be reported from customer-related MSDA expenses. Based on your new knowledge on measuring customer profitability, what other considerations should a company look at in measuring customer profitability?

Xie company identified the following activities, costs, and activity drivers for 2017. the company manufactures two types of go-karts: deluxe and basic. activity expected costs expected activity handling materials $ 625,000 100,000 parts inspecting product 900,000 1,500 batches processing purchase orders 105,000 700 orders paying suppliers 175,000 500 invoices insuring the factory 300,000 40,000 square feet designing packaging 75,000 2 models required: 1. compute a single plantwide overhead rate, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours. 2. in january 2017, the deluxe model required 2,500 direct labor hours and the basic model required 6,000 direct labor hours. assign overhead costs to each model using the single plantwide overhead rate.

The discussion of the standards for selection of peanuts that will be used in m& ms and the placement of the m& m logo on the candies speaks to which building block of a sustainable competitive advantage:

On june 3, teal company sold to chester company merchandise having a sale price of $2,600 with terms of 2/10, n/60, f. o.b. shipping point. an invoice totaling $91, terms n/30, was received by chester on june 8 from john booth transport service for the freight cost. on june 12, the company received a check for the balance due from chester company. prepare journal entries on the teal company books to record all the events noted above under each of the following bases. (1) sales and receivables are entered at gross selling price. (2) sales and receivables are entered at net of cash discounts.