Arctic Air Inc, manufactures cooling units for commercial buildings. The price and cost of goods sold for each unit are as follows: per unit 1 Price per unit 2 Cost of goods sold 5 Gross profit per unit $75,150.00 59,050.00 $16,100.00 per unit In addition, the company Incurs selling and administrative expenses of $247,202. The company wishes to assign these costs to its three major customers, Gou and The Martin Group. These expenses are related to three major nonmanufacturing activities: customer service, project bidding, and engineering support. The In addition, the company Incurs selling and administrative expenses of $247,202. The company wishes to assign those costs to its three major customers, Gough Industries, Broon Inc. and The Martin Group. These expenses are related to three major nonmanufacturing activities: customer service, project bidding, and engineering support. The engineering support is in the form of engineering changes that are placed by the customer to change the design of a product. The budgeted activity costs and activity bases associated with these activities are: 1 Activity 2 Customer service 1 Project bidding Engineering support Budgrted Activity Activity Base Cost $9570100 Number of service requests 57,85400 Number of bids 93,660.00 Number of customer design changes 5242.202.00 Activity-base usage and unit volume information for the three customers is as follows: The Martin Breen Inc. Group Total Gough Industries 65 47 225 337 35 18 49 102 Number of service requests Number of bids Number of customer dosign changes Unit volume 47 33 143 223 20 13 5 38 Required: 1. Determine the activity rates for each of the three nonmanufacturing activity pools. Refer to the Nsts of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. 2. Determine the activity costs allocated to the three customers, using the activity rates in (1). Refer to the lists of Labels and Amount Descriptions 1. Determine the activity rates for each of the three non manufacturing activity pools. Refer to the lets of Labels and Amount Descriptions for the exact wording of the answer choices for out entries 1 Activity SActivity rates. 00 per serv.reg per bid 3 per design change 4 2. Determine the activity costs allocated to the three customers, using the activity rates in (1). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. 1 Activity Costs 2 3 4 Customer Profitability Report 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports should disclose the gross profit and income from operations associated with each customer. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Colons() will automatically appear if required. Enter all amounts as positive numbers, except for a negative income from operations. Arctic Air Inc. Customer Profitability Report (Label) Gough Industries Breen Inc. The Martin Group 2 3 4 5 (Label) 6 1
