Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers.
Jerry Inc. Kate Co.
Number of orders 4 60
Units per order 3,000 220
Sale Returns:
Number of returns 2 5
Total units returned 50 160
Number of sales calls 10 6
Colleen Sells its products at $200 per unit. The firm's gross margin ratio is 30%.
The firm has determined the following activity costs:
Activity Cost Driver and Rate
Sales Calls $900 per visit
Ordering processing $390 per order
Deliveries 490 per order
Sales return 270 per return and $3 per unit returned
Sales salary 95,000 per month
How do you calculate the sales return for Jerry inc and for Kate Co when comparing the profitability of two customers.