Carmel Company has a frequent buyer program for its customers, where the customers can attain...
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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 Titanlum. 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 salarles 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 Total Titanium Platinum Number of customers 25,888 5,880 20,000 Average customer representative salary $68,888 $68,000 Promotion costs $2,850,880 Average gross margin per customer $ 1,590 325 $ 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
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