Scribd Logo
Upload

Welcome to Scribd!

  • To Find The Profitability of Charlie Lyons Identify Functional Cost Centre Order Getting Cost Order Filling Cost

    Uploaded by

    mohindroosahil
    17 views8 pages
    1. The document analyzes the profitability of Charlie Lyons' business by examining functional cost centers and natural expense accounts. 2. It converts natural expenses like salaries, commissions, advertising, etc. into functional accounts like direct selling, order getting, order filling and allocates expenses and revenues across different product lines and customer segments. 3. The analysis finds that Charlie Lyons is making a net profit of $50,868 before taxes through generating $2.6 million in sales revenue and $623,855 in gross margin, though profitability varies across different products and customers.

    Original Description:

    case analysis

    Original Title

    Workbook1

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    1. The document analyzes the profitability of Charlie Lyons' business by examining functional cost centers and natural expense accounts. 2. It converts natural expenses like salaries, commissions, advertising, etc. into functional accounts like direct selling, order getting, order filling and allocates expenses and revenues across different product lines and customer segments. 3. The analysis finds that Charlie Lyons is making a net profit of $50,868 before taxes through generating $2.6 million in sales revenue and $623,855 in gross margin, though profitability varies across different products and customers.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    17 views8 pages

    To Find The Profitability of Charlie Lyons Identify Functional Cost Centre Order Getting Cost Order Filling Cost

    Uploaded by

    mohindroosahil
    1. The document analyzes the profitability of Charlie Lyons' business by examining functional cost centers and natural expense accounts. 2. It converts natural expenses like salaries, commissions, advertising, etc. into functional accounts like direct selling, order getting, order filling and allocates expenses and revenues across different product lines and customer segments. 3. The analysis finds that Charlie Lyons is making a net profit of $50,868 before taxes through generating $2.6 million in sales revenue and $623,855 in gross margin, though profitability varies across different products and customers.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 8

    Profitability Analysis

    Specify the purpose


    1
    To find the
    profitability of Charlie
    Lyons
    2
    Identify functional
    cost centre
    Order getting cost Order filling cost
    Direct selling Packaging
    Advertising Transportation
    Travel expense Warehousing
    Commissions Order processing
    Rent
    3 Convert natural expenses into functional accounts
    Natural Accounts Selling Direct Costs
    Selling Indirect
    Costs
    Salaries 177,000 106500 47500
    Commissions 37431 37431
    Advertising 131915
    Packaging 43642
    Warehousing &
    Transportation 76374
    Travel expenses 59340 57340 2000
    Order Processing 770
    Rent 83000 18500
    Total Expenses 609,472 201,271 68,000
    4 Full Cost Approach 3151
    Functional Accounts
    Receivers
    Sales 2,638,340 787,750
    Cost of Goods Sold ($)
    2,014,485 668,012
    Gross margin ($) 623,855 119,738
    Expenses: -
    Salaries 177,000 59,000
    Commissions 37,431 7,184
    Advertising 131,915 39,388
    Packaging 43,642 6,302
    Ware Housing &
    Transportation 76,374 11,029
    Travel Expenses 59,340 19,780
    Order Processing 770 257
    Rent 83,000 27,667
    Total
    Expenses 609,472 170,606
    Net Profit (before taxes)
    ($) 14,383
    Net profit
    50,868 -
    5 Marketing profitability of indvidual market segments
    Advertising Order Processing
    Warehousing
    &
    Transportatio
    n Packaging
    11000
    12000
    131915
    43642
    76374
    770
    4500 40000 20000
    131,915 17,270 116,374 74,642
    2789
    American TV
    12079 6591 Receivers Turntables
    Turntables Speakers 422 1513
    1,026,715 823,875 2,638,340 Sales 105500 128605
    773,056 573,417 2,014,485
    Cost of Goods Sold
    ($) 89,464 96832
    253,659 250,458 623,855 Gross margin ($) 16,036 31,773
    - - - Expenses:
    59,000 59,000 177,000 Salaries 5,537 5,537
    15,220 15,027 37,431 Commissions 962 1,906
    51,336 41,194 131,917 Advertising 5,275 6,430
    24,158 13,182 43,642 Packaging 844 3,026
    42,277 23,069 76,374
    Ware Housing &
    Transportation 1,477 5,296
    19,780 19,780 59,340 Travel Expenses 1,891 1,891
    257 257 770 Order Processing 37 37
    27,667 27,667 83,000 Rent 2,306 2,306
    239,693 199,175 Total Expenses 18,328 26,428
    Net Profit (before
    taxes) ($) 2,292 - 5,345
    13,966 51,283
    American Tv Appliance Mart
    No. of sales calls 65 55
    Av time 55 45
    Total time 3575 2475
    1964
    Appliance mart
    Speakers Receivers Turntables Speakers Receivers
    854 337 1058 569 85
    106750 84250 89930 71125 21250
    74298 71,444 67712 49503 18,020
    32,452 12,806 22,218 21,622 3,230
    5,537 3,833 3,833 3,833 3,485
    1,947 768 1,333 1,297 962
    5,338 4,213 4,497 3,556 1,063
    1,708 674 2,116 1,138 170
    2,989 1,180 3,703 1,992 298
    1,891 1,600 1,600 1,600 1,454
    37 14 14 14 18
    2,306 2,306 2,306 2,306 2,306
    21,751 14,587 19,401 15,735 9,755
    10,701 1,781 - 2,817 5,887 6,525 -
    13,754 6,923
    Audio Emporium
    50
    45
    2250
    8300
    1014
    Audio Emporium
    Turntables Speakers
    455 474
    38675 59250
    29120 41238
    9,555 18,012
    3,485 3,485
    1,906 1,947
    1,934 2,963
    910 948
    1,593 1,659
    1,454 1,454
    18 18
    2,306 2,306
    13,605 14,779
    4,050 - 3,233 13,335
    7,342 -

    You might also like