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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
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. Cost Driver Rate $1,000 Customer Related Activities Sales activity Order taking ... Special handling Special shipping Cost Driver Base Sales visits Purchase orders Units handled ......... Shipments ........... 200 500 est-driver data for two of Fresno's customers for the most recent year are Customer Related Activities Sales activity.... Order taking ..... Special handling.... Special shipping Trace Telecom 8 visits ........... 15 orders........... 800 units handled..... 18 shipments......... Caltex Computer 6 visits 20 orders 600 units handled 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. 19.000............ Caltex Computer $123,800 62,000 18,000 16,000
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