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AutoSave . Off H Document2 - Word cristine ostrich CO X File Home Insert Design Layout References Mailings Review View Help Search Share Comments &

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AutoSave . Off H Document2 - Word cristine ostrich CO X File Home Insert Design Layout References Mailings Review View Help Search Share Comments & Cut 11 ~ A" A Aa Ap Find Calibri (Body) AaBbCcDd AaBbCcDd AaBbCc AaBbCcD Aa B AaBbCcD AaBbCcDd Replace Paste [A Copy BIU ab X X A LA 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Dictate Format Painter Select v Clipboard Font Paragraph Styles Editing Voice Aeronautics Company designs and manufactures electronic control systems for commercial airlines. Aeronautics Company does contract work for the two major aircraft makers and three other companies that make the narrow-body commercial jets. This is a very competitive field that Aeronautics Company operates In. It is imperative they manage the non-manufacturing overhead costs effectively in order to achieve an acceptable net profit margin. With declining profit margins in recent years, the CEO has become concerned that the cost of obtaining contracts and maintaining relations with its five customers may be getting out of hand You have been hired to conduct a customer profitability analysis. Below is applicable revenue and cost information you should include in your customer profitability analysis. Sales Customer 1 $2,000,000 Customer 2 11,000,000 Customer 3 3,000,000 Customer 4 4,000,000 Customer 5 2,000,00 $22,000,000 Cost of Good Sold (COGS) as a percentage of sales is the following: 80% of Total Sales generated Aeronautics Company selling and customer support team receives the following sales commissions on each customer account: 4% Sales generated per customer The accounting staff determined the additional selling and customer support expenses related to the following four activity cost pools and the cost per activity. Activity Activity Cost Driver Data Cost per unit of activity Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 1. Sales Visits Number of visit days $1,200 106 30 52 34 16 2. Product adjustments Number of adjustments 1,10 23 36 10 6 5 3. Phone and email contracts Number of calls/contracts 75 220 354 180 138 104 4. Promotion and entertainment events Number of events 1,500 82 66 74 18 10 In addition to the above, the sales staff used the corporate jet for trips to customers at a cost per hour as stated below and jet hours used per customer as follows: There is a cost of $800 hour Hours used of jet Customer 1 Customer 2 10 Customer 3 Customer 4 Customer 5 Page 1 of 1 0 words " Focus LO + 100% W X 5:44 PM 10/31/2020

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