Capital Doors Canberra (CDC) supplies parts for automatic grape doors in Canberra region. CDC direct costs consist of parts and equipment that are directly traceable to the customers and a pool of office overhead. Until recently. CDC estimated tustomer profitability by locating the customer related ottice overhead to each customer based on share of revenues. For 2000, CDC reported the Following results for four of its customers Amy Opel George Total Revenues $260 000 $200 000 5122 000 $582 000 Less parts and equipment costs $182000 $175.000 5107 000 $464000 Gross margin $78000 $25 000 $15 000 5118 000 Less, total customer related office overhead $90 750 costs Operating profit $27 250 Mary Ban, CDC) new management accountant note that the overhead is more than 10% of total arts and equament costs. She spends a couple of weeks analysing the consaction of the overhead resources by these four customers. She collects the following information relating to the verhead costs activity areas and relevant cost-driver rate of the activity areas Activity are Cost-driver rate Service call handling 575 Service Pats order Shop web-based parts order Billing and collection $50 Customer dat tenance $10 per service Mary collects the following to win to the use of activities by the store Amy Geor Mary Banks also collects the following information relating to the use of activities by the customers George Amy 150 120 Opela 240 Number of service calls Number of web-based parts orders Number of bills 120 210 150 30 90 60 Required: (a) Calculate customer-level operating profit using the new information activity-based costing that Mary Banks has gathered (There is no need to show a Total column in your calculation. Show other workings). (6 marts (b) Briefly discuss what options should CDC consider regarding the improvements in individual customers' profitability considering the new ABC-based data and analysis of the office overhead? 16 marks Edit View invert Format Tools Table BIVA 2