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Cardinal Company's cost system assigns MSDA expenses to customers using a rate of 37% of sales revenue. The new controller has discovered that Cardinal's

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Cardinal Company's cost system assigns MSDA expenses to customers using a rate of 37% of sales revenue. The new controller has discovered that Cardinal's customers differ greatly in their ordering patterns and interaction with Cardinal's sales force. Because the controller believes Cardinal's cost system does not accurately assign MSDA expenses to customers, she developed an activity-based costing system to assign these expenses to customers. She then identified the following MSDA costs and additional information for two customers, Mandel and Bedell (Click the icon to view the activity-based costs.) (Click the loon to view the information.) Requirements (a) Using the current cost system's approach of assigning MSOA expenses to customers using a rate of 37% of sales revenue, determine the operating prof associated with Mandel and with Bedell (b) Using the activity-based costing information provided, determine the operating proft associated with Mandel and with Bedell (c) Which of the two methods produces more accurate assignments of MSDA expenses to customers? Explain. Requirement (a) Using the current cost system's approach of assigning MSDA expenses to customers using a rate of 37% of sales revenue, determine the operating proft associated with Mandel and with Bedell. (Round the profit percentages to two decimal places, XXX%) Sales Cost of goods sold Gross margin MSDA expenses Operating profit Profit percentage Mandel Bedell

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