Dakota Office Products

Harvard Business School Case #102-021

Case Software #XLS-408

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Exhibit 1 Dakota Office Products: Income Statement CY2000

Sales 42,500,000 121.4%

Cost of Items Purchased 35,000,000 100.0%
Gross margin 7,500,000 21.4%
Warehouse Personnel Expense 2,400,000 6.9%
Warehouse Expenses (excluding personnel) 2,000,000 5.7%
Freight 450,000 1.3%
Delivery Truck Expenses 200,000 0.6%
Order entry expenses 800,000 2.3%
General and selling expenses 2,000,000 5.7%
Interest expense 120,000 0.3%
Net Income Before Taxes (470,000) -1.3%
Exhibit 2 Customer Profitability Report (Current Method)

Customer A Customer B
Sales 103,000 121.2% 104,000 122.4%
Cost of Items Purchased 85,000 100.0% 85,000 100.0%

Gross margin 18,000 21.2% 19,000 22.4%

Warehousing, Distribution and 12,750 15.0% 12,750 15.0%
Order Entry

Contribution to general and selling 5,250 6.2% 6,250 7.4%

expenses, and profit
Exhibit 3 Services Provided in Year 2000 to Customers A and B

Customer A Customer B
Number of cartons ordered 200 200
Number of cartons shipped 200 150
commercial freight
Number of desktop deliveries - 25
Number of orders, manual 6 100
Number of line items, manual 60 180
Number of EDI orders 6 -
Average accounts receivable $9,000 $30,000