Activity Based Costing and Customer Profitability Metrold Electric manufactures power distribution equipment for commercial customers, such as hospitals and manufacturers. Activity-based costing was used to determine customer profitability. Customer service activities were assigned to Individual customers, using the following assumed customer service activities, activity base, and activity rate: Customer Service Activity Activity Base Activity Rate Bid preparation Number of bid requests $420 per request Shipment Number of shipments $90 per shipment Support standard items Number of standard Items ordered $30 per std. Item Support nonstandard items Number of nonstandard items ordered $180 per nonstd. Item Assume that the company had the following gross profit Information for three representative customers! Customer 1 Customer 2 Customer 3 Revenues $130,000 $210,000 $180,000 Cost of goods sold (81,900) (113,400) (90,000) Gross profit 548,100 596,600 390,000 Gross profit as a percent of sales 379 46 50% Activity Base Customer 1 Customer 2 Customer 3 15 40 60 Number of bid requests Number of shipments Number of standard items ordered 25 55 SO 20 35 52 Number of nonstandard items ordered 6 65 85 a. Prepare a customer profitability report dated for the year ended December 31, 2048, showing (1) the operating income after customer service activities, (2) the gross profit as a percent of sales, and (3) the operating income after customer service activities as a percent of sales. Prepare the report with a column for each customer. Round percentages to the nearest whole percent. Metroid Electric Customer Profitability Report For the Year Ended December 31, 2048 Customer 2 Customer 3 Revenues Customer 1 Cost of goods sold Gross profit Customer service activities Bd preparation Shipment Support standard Items Support nonstandard items ni Support standard items Support nonstandard items Total customer service activities Operating income after customer service activities Gross profit as a percent of sales Operating income after customer service activities as a percent of sales % % % % %