Complete Problems 5-63 and 5-65 in the textbook.
Prepare Problem 5-63 using Word. Problem 5-65 should be prepared using Excel. Please note, must show your work in Excel, which includes providing the formulas in the cells, not just the summary value.
Problem 5-65 Customer-Profitability Analy sis: Activity-Based Costing (LO 5-9) 1. Operating income, Trace Telecom: $7.000 Fresno Fiber Optics, Inc. manufactures fiber optic cables for the computer and telecommunications industries. At the request of the company vice president of marketing, the cost management staff has recently completed a customer-profitability study. The following activity-based costing information was the basis for the analysis Chapter 5 ctvity-Based Costing and Management 225 Customer Related Activities Sales activity Ordering Special handling Special shipping Cost Driver Base Seles visits Purchase orders Units handed Shipments Cost Driver Rate $1.000 200 50 500 Cost-driver data for two of Fresno's customers for the most recent year are Trace Telecom Customer Related Activities Sales activity Order taking Special handing Special shipping 15 orders 800 units harded 18 shipments Caltex Computer visits 20 orders 500 units handied 20 shipments The following additional information has been compiled for Fresno Fiber Optics for two of its cus- tomers, Trace Telecom and Caltex Computer, for the most recent year. Sales revenue Cost of goods sold General selling costs General administrative costs Trace Telecom $190.000 80,000 24.000 Caltex Computer $123,800 62.000 18,000 16,000 Required: 1. Prepare a customer profitability analysis for Trace Telecom and Caltex Computer. (Hint: Refer to Exhibit 5-13 for guidance.) 2. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (1) above. Show how the solution will change if the following information changes: Trace Telecom's sales revenue was $185,000 and Caltex Computer's cost of goods sold was 559,000. Problem 5-63 Better Bagels, Inc. manufactures a variety of bagels, which are frozen and sold in grocery stores. The Basic Elements of a Produc- production process consists of the following steps. tion Process: Non-Value 1. Ingredients, such as flour and raisins, are received and inspected. Then they are stored until needed. Added Costs 2. Ingredients are carried on hand carts to the mixing room. (LO 5-7,5-8,5-10) 3. Dough is mixed in 40-pound batches in four heavy-duty mixers. 4. Dough is stored on large boards in the mixing room until a bagel machine is free. 5. A board of dough is carried into the bagel room. The board is tipped, and the dough slides into the hopper of a bagel machine. This machine pulls off a small piece of dough, rolls it into a cylin- drical shape, and then squeezes it into a doughnut shape. The bagel machines can be adjusted in a setup procedure to accommodate different sizes and styles of bagels. Workers remove the uncooked bagels and place them on a tray, where they are kept until a boiling vat is free. 6. Next the trays of uncooked bagels are carried into an adjoining room, which houses three 50-gallon vats of boiling water. The bagels are boiled for approximately one minute. 7. Bagels are removed from the vats with a long-handled strainer and placed on a wooden board. The boards full of bagels are carried to the oven room, where they are kept until an oven rack is free. The two ovens contain eight racks which rotate but remain upright, much like the seats on a Ferris wheel. A rack full of bagels is finished baking after one complete revolution in the oven. When a rack full of bagels is removed from the oven, a fresh rack replaces it. The oven door is opened and closed as each rack completes a revolution in the oven. 8. After the bagels are removed from the oven, they are placed in baskets for cooling. 9. While the bagels are cooling, they are inspected. Misshapen bagels are removed and set aside. (Most are eaten by the staff.) 10. After the bagels are cool, the wire baskets are carried to the packaging department. Here the bagels are dumped into the hopper on a bagging machine. This machine packages a half-dozen bagels in each bag and seals the bag with a twist tie. 11. Then the packaged bagels are placed in cardboard boxes, each holding 24 bags. The boxes are placed on a forklift and are driven to the freezer, where the bagels are frozen and stored for shipment. Required: 1. Identify the steps in the bagel-production process that fall into each of the following categories: process time, inspection time, move time, waiting time, storage time. 2. List the steps in the production process that could be candidates for non-value-added activities
