Analysis shows that Zodiac Corporation incurred the following five-year gross margin and cost histories in serving customer number 128.

Required:

1. Prepare a trend analysis (in terms of percentage of gross margin) for these two customer-related costs.
2. What different conclusions might management draw about the behavior of these two costs?

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Year 1 Year 2 Year 3 Year 4 Year 5 Gross margin $602,000 $638,000 $636,000 $652,000 $670,000 Cost of engineering changes 6,600 12,120 7,000 7,200 80,250 Special packaging 66,200 73,360 82,600 78,100 80,400