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Customer profitability analysis and trend analysis

Analysis shows that Xavier Corporation incurred the following five-year gross margin and cost histories in serving customer number 614.

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Gross margin... $301000 $319000 $318000 $326000 $335000

Cost of engineer
-ing changes..... 3,300 6,060 3,500 3,600 40,125

Spl packaging...... 33,100 36,680 41300 39050 40,200

1. prepare a trend analysis (in terms of percentage of gross margin) for these two customer-related costs

2. What different conclusion might management draw about the behvaior of these two costs?

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Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Gross margin... $301000 $319000 $318000 $326000 $335000

Cost of engineer
-ing changes..... 3,300 6,060 3,500 3,600 40,125

Spl packaging...... 33,100 36,680 41300 39050 40,200

1. prepare a trend analysis (in terms of percentage of gross ...

Solution Summary

This explains the customer profitability analysis and trend analysis for the organization

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