Answered step by step
Verified Expert Solution
Question
1 Approved Answer
HEY if it is possible may you show your formulas?? Thank youuuu Arctic Air Inc. manufactures cooling units for commercial buildings. The price and cost
HEY if it is possible may you show your formulas??
Thank youuuu
Arctic Air Inc. manufactures cooling units for commercial buildings. The price and cost of goods sold for each unit are as follows: 1 Price per unit $74,900.00 per unit 2 Cost of goods sold 60,550.00 3 Gross profit per unit $14,350.00 per unit In addition, the company incurs selling and administrative expenses of $233,998. The company wishes to assign these costs to its three major customers, Gough Industries, Breen Inc., and The Martin Group. These expenses are related to three major nonmanufacturing activities: customer service, project bidding, and engineering support. The engineering support is in the form of engineering changes that are placed by the customer to change the design of a product. The budgeted activity costs and activity bases associated with these activities are: Activity Budgeted Activity Cost Activity Base Customer service $91,080.00 Number of service requests 3 Project bidding 58,900.00 Number of bids 4 Engineering support 84,018.00 Number of customer design changes Total costs $233,998.00 Activity-base usage and unit volume information for the three customers is as follows: Gough Industries 1 Number of service requests The Martin Group 211 4 6 136 5 Breen Inc. 56 19 31 14 Number of bids Total 330 100 209 43 Number of customer design changes Unit volume R Required: 1. Determine the activity rates for each of the three nonmanufacturing activity pools. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. 2. Determine the activity costs allocated to the three customers, using the activity rates in (1). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports should disclose the gross profit and income from operations associated with each customer. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Colons (c) will automatically appear if required. Enter all amounts as positive numbers, except for a negative income from operations. Labels December 31 For the Year Ended December 31 Selling and administrative activities Amount Descriptions Breen Inc. Cost of goods sold Customer service Engineering support Gough Industries Gross profit The Martin Group Income from operations Other income (expense) Plantwide factory overhead rate Product cost distortion Project bidding Revenues Total selling and administrative activitiesStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started