customer profitability analysis omega printers ltd handles printing jobs for a varie 255227

Question 2: Customer Profitability Analysis Omega Printers Ltd handles printing jobs for a variety of clients. The marketing manager of Omega, Joe Patterson, finds that serving some clients is more demanding than serving others. The demands made by some clients take up a lot of time that the sales staff would prefer to spend on soliciting new clients. In particular, Joe is interested in knowing the profitability of serving Expert Travels – a travel operator and Evon Cosmetics – a retailer.

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Question 2: Customer Profitability Analysis Omega Printers Ltd handles printing jobs for a variety of clients. The marketing manager of Omega, Joe Patterson, finds that serving some clients is more demanding than serving others. The demands made by some clients take up a lot of time that the sales staff would prefer to spend on soliciting new clients. In particular, Joe is interested in knowing the profitability of serving Expert Travels – a travel operator and Evon Cosmetics – a retailer. The management accounting department staff of Omega printers have provided the following information. Expert Travels Evon Cosmetics Sales revenue $554,000 $446,800 Cost of goods sold $288,000 $223,200 Selling costs $86,400 $64,800 Administration costs $68,400 $57,600 Cost driver data used by Omega Printers and traceable to the two clients are: Customer-driven activities Cost driver Cost driver rate Sales activity Sales visits $200 per visit Order taking Purchase orders $ 40 per purchase order Sorting & packaging Number of packages $ 50 per package Ordinary shipping Number of shipments $ 150 per shipment Special shipping Number of shipments $ 750 per shipment The following data relates to those same two clients: Customer-driven activities Expert Travels Evon Cosmetics Sales activity 10 sales visits 20 sales visits Order taking 15 purchase orders 36 purchase orders Sorting & Packaging 200 packages 1,500 packages Ordinary shipping 12 shipments 10 shipments Special shipping 3 shipments 26 shipments Required: Prepare a customer profitability analysis for Expert Travels and Evon Cosmetics. Comment on the relative profitability of the two customers by computing the gross margin, net profit margin and any other relevant ratios. Suggest and explain one non-financial performance measure that Omega Printers Ltd could use to evaluate each of the following: Customer acquisition Customer retention Customer satisfaction …

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