Activity-Based Costing and Customer Profitability Schneider 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 Bid preparation Shipment Support standard Items Support nonstandard Items Activity Base Number of bid requests Number of shipments Number of standard items ordered Number of nonstandard items ordered Activity Rate $400 per request $ 80 per shipment $25 per std. item $150 per nonstd. Item Assume that the company had the following gross profit information for three representative customers Customer Customer 2 Customer 3 Revenues $120,000 76,800 $43,200 Cost of goods sold $200,000 110,000 $90,000 $160,000 83,200 $76,800 Gross profit 36% 45 48% Gross profit as a percent of sales The administrative records indicated that the activity-base usage quantities for each customer were as follows: Customer 1 Customer 2 Customer 3 14 38 55 Activity Base Number of bid requests Number of shipments Number of standard Items ordered Number of nonstandard items ordered 30 60 48 15 30 50 5 70 80 a. Prepare a customer profitability report dated for the year ended December 31, 2018, showing (1) the income from operations after customer service activities, (2) the gross profit as a percent of sales, and (3) the income from operations after customer service activities as a percent of sales. Prepare the report with o column for each customer. Round percentages to the nearest whole percent. Enter all amounts as positive numbers, Schneider Electric Customer Profitability Report For the Year Ended December 31, 2048 Customer 1 Customer 2 Customer 3 Revenues Cost of goods sold land Gross profit Customer service activities: Bid preparation Shipment Support standard items Support nonstandard Items Total customer service activities Income from operations after customer service activities Gross profit as a percent of sales Income from operations after customer service activities as a percent of sales Feedback