I just need help with the last question in red please. Time Solutions, Inc. is a
ID: 2464541 • Letter: I
Question
I just need help with the last question in red please.
Time Solutions, Inc. is an employment services firm that places both temporary and permanent workers with a variety of clients. Temporary placements account for 70% of Time Solutions' revenue; permanent placements provide the remaining 30%. President Gia Johnson recently read an article that discussed the need to consider selling and administrative costs in determining customer profitability-a practice that Time Solutions does not follow. Johnson is concerned that the company may be making poor choices in the selection of customers. In the temporary market, Time Solutions advertises and searches for workers, hires them, and pays them for the hours they work. The company then bills customers for an amount that is higher than the workers' pay plus taxes. Because the temporary market is very competitive, Time Solutions has had to reduce the rates charged to customers to keep their business. After reviewing the year's operations, Johnson has determined that the company's customer service activities for the temporary business could be divided into three cost pools: filling work orders, hiring temporary employees, and processing payroll/billing customers. The following table shows the three cost pools and their annual capacity: Time Solutions' largest four customers account for about 42% of total sales, so Johnson has decided to analyze these customer's accounts first to determine how much they are contributing to the bottom line. The gross margin the companies generate and the activities they use are as follows: Your answer is correct. Calculate the gross margin percentage for each customer. (Round answers to 1 decimal place, e.g. 15.2%.) Your answer is correct. Determine the activity rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 15.25.) Your answer is incorrect. Determine the customer net profit and customer profit margin for each customer. (Round customer net profit to 0 decimal places, e.g. 125 and customer profit margin to 1 decimal place, e.g. 15.2%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)Explanation / Answer
Last part Chemical Company Trailer Newspaper Food Activity rates Manufacturer Publisher Processor A B C D E Gross Margin 62243 12600 11261 21121 Temps ordered 85 55 920 340 50.55 Applicants 71 49 796 290 27.9 Hours worked 47440 15250 13090 22800 0.2 Chemical Company Trailer Newspaper Food Activity rates Manufacturer Publisher Processor Gross Margin (F) 62243 12600 11261 21121 Overhead allocated A * E B*E C*E D*E Temps ordered 4296.75 2780.25 46506 17187 Applicants 1980.9 1367.1 22208.4 8091 Hours worked 14.2 9.8 159.2 58 Total overhead cost allocated (G) 6291.85 4157.15 68873.6 25336 Customer net profit / (Loss) H ( F-G) 55951.15 8442.85 (57612.60) (4215.00) Sales (I) 467545 146993 122158 165600 Customer profit margin (H / I *100) 11.97% 5.74% -47.16% -2.55%