PROFITABILITY ANALYSIS BY CHANNELS OF MARKETING

During December, the cost department calculated the following standard units costs for the coming year: At the end of the year, activity cost
were,
Retailers Wholesalers Depratment Stores
Measure of Activity Functions Est. Est. Est. Total Est. Total Under or
Units Rate Amount Units Rate Amount Units Rate Amount Amount Act.Amount Over App

Salesperson's Calls Selling 75,000 1.75 131,250 10,000 1.75 17,500 15,000 1.75 26,250 175,000 187,500 (12,500)
Cu.ft of Product Warehousing 390 12.00 4,680 160 12.00 1,920 250 12.00 3,000 9,600 12,100 (2,500)
Cu.ft of Product Packing & Shipping 390 47.00 18,330 160 47.00 7,520 250 47.00 11,750 37,600 35,900 1,700
Media Circulation Advertising 4,000 1.25 5,000 1,000 1.25 1,250 5,000 1.25 6,250 12,500 11,200 1,300
Invoice Lines Credit & Collection 115,000 0.08 9,200 75,000 0.08 6,000 60,000 0.08 4,800 20,000 23,800 (3,800)
Customer's Order General Accounting 18,500 0.35 6,475 2,000 0.35 700 4,500 0.35 1,575 8,750 9,300 (550)

Total 174,935 34,890 53,625 263,450 279,800 (16,350)

INCOME STATEMENT
Retailers Wholesalers Department Stores Total

Sales 670,000.00 310,000.00 405,000.00 1,385,000.00

Less: Cost of Good Sold 502,500.00 186,000.00 283,500.00 972,000.00
Gross Profit 167,500.00 124,000.00 121,500.00 413,000.00
Less: Operating Expense
Selling 131,250.00 17,500.00 26,250.00 175,000.00
Warehousing 4,680.00 1,920.00 3,000.00 9,600.00
Packing & Shipping 18,330.00 7,520.00 11,750.00 37,600.00
Advertising 5,000.00 1,250.00 6,250.00 12,500.00
Credit & Collection 9,200.00 6,000.00 4,800.00 20,000.00
General Accounting 6,475.00 700.00 1,575.00 8,750.00
Total Operating Expense 174,935.00 34,890.00 53,625.00 263,450.00
Operating Profit (7,435.00) 89,110.00 67,875.00 149,550.00
Over or Under Applied Expense
Selling (12,500)
Warehousing (2,500)
Packing & Shipping 1,700
Advertising 1,300
Credit & Collection (3,800)
General Accounting (550)
Less: Over Applied Expenses (16,350.00)

Net Profit 133,200