Ruiz Wholesalers operates at capacity and sells furniture items to four department- store chains…
Ruiz Wholesalers operates at capacity and sells furniture items to four department- store chains (customers). Mr. Ruiz commented, “We apply ABC to determine product- line profitability. The same ideas apply to customer profitability, and we should find out Activity Cost- Driver Rate Regular order processing………. $ 32 per regular order Rush order processing……….. $ 160 per rush order Returned items processing………. $ 20 per item Catalogs and customer support …….. $ 1,000 per customer Customers pay the transportation costs. The cost of goods sold averages 80% of sales. Required Determine the contribution to profit from each chain last year. Comment on yoursolution.