Lynnwood Ltd. is reviewing two of its customers using ABC analysis. It has identified the following customer related activities and their rates:
The company has the following information regarding Enbright Ltd. and Jackson Inc.:
Sales for Enbright and Jackson are $280,000 and $148,000 respectively. The gross margins on these sales are the same at 52%.
Required:
Using Customer ABC Analysis, analyze the relative profitability of Enbright and Jackson.
Definitions:
Lithium
A chemical element often used in the treatment of bipolar disorder, affecting the flow of sodium through nerve and muscle cells.
Electroconvulsive Therapy
A psychiatric treatment involving electrically induced seizures to provide relief from severe mental illnesses.
Prognosis
A medical term referring to the predicted outcome or course of a disease, including chances of recovery.
Relapse
A return to a previous state of illness or negative behavior after a period of improvement.
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