Carmel Company has a frequent buyer program for its customers, where the customers can attain an "elite" level based on

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Carmel Company Has A Frequent Buyer Program For Its Customers Where The Customers Can Attain An Elite Level Based On 1 (122.49 KiB) Viewed 31 times

Carmel Company has a frequent buyer program for its customers, where the customers can attain an "elite" level based on the number of orders and the total revenue of the orders. There are two elite levels: Platinum and Titanium. The benefits of elite membership include discounts and access to special customer service representatives who can resolve problems. The company has one full-time customer representative per 200 Titanium customers and one full-time customer representative per 2,000 Platinum customers. Customer representatives receive salaries plus bonuses of 1 percent of customer gross margin. Carmel spends 80 percent of its promotion costs on Titanium customers to encourage their loyalty. Customer Costs Titanium Platinum Number of customers Total 31,000 7,000 24,000 Average customer representative salary $70,000 $70,000 Promotion costs $3,050,000 Average gross margin per customer $1,610 $ 335 Required: a. Calculate the totals of the items below for both titanium and platinum customers, as well as the excess of gross margin over customer costs for each category. b. Which customers are more profitable? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the totals of the items below for both titanium and platinum customers, as well as the excess of gross margin over customer costs for each category. (Do not round Intermediate calculations.) Titanium Platinum Total gross margin Customer representative salaries & bonuses Promotion costs Excess of gross margin over customer cost < Required A Required B >