I'm trying to answer 2 dealing with Managerial Accounting profitability analysis.... "what type of actions might the company take as a result of this analysis? Reference the different customers... Note to tutor: I have already solved this problem, I just need help interpreting it as the question says.

Part t Aeronautics Company designs and manufactures electronic control systems for commercial airlines. Aeronautics Company does contract work for the two major aircraft makers and three other companies that make the narrow-body commercialjeE. This is a very competitive field that Aeronautics Company operates in. it is imperative they manage the non-manufacturing overhwd costs effectively in order to achieve an acceptable net profit margin. With declining_prot margins in recent years the CEO has become co ncemed that the cost of obtaining contracts and maintaining relations with its ve customers may be getting out of hand. You have been hired to conduct a customer profitability analysis. Below is applicable revenue and cost Infom'iation you should include in your cuomer profitability analysis. Sales Customer 1 $18 000 000 Customer 2 13 000 000 Customer 3 4 000 000 Customer 4 5 000 000 Customer 5 4 000 000 $44 000 000 Cost ofGood Sold (COGS) as a percentage of sales is the following: 80% of Total Sales generated Aeronautics Company selling and cuomer support team receives the following sales commisser on each customer account: 6% SaE generated per customer The accounting slatf determined the add itional selling and customer support expenses related to the following four activity cost pools and the cost per activity. Usage of cost driver per customer Activity Activity Cost Driver Data Cost per unit of activity Customer 1 CustomerZ Customer 3 Customerd Customer 5 1. Sales Visits Number of visit days $1 300 106 130 52 34 16 2. Product adjustments Number ofadjustrnents 1 250 23 36 10 6 5 3. Phone and email contracts Number ofcallsi'contracts 150 220 354 181) 138 104 4. Promotion and entertainment events Number of events 1 400 8'2 66 74 18 1D In addition to the above the sales staff used the corporate jet for trips to customers at a cost per hou r as stated below and jet hours used per customer as follows: There is a cost of $900 hour Hours used of jet Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Required: 1. Develop a customer profitability analysis for Aeronautics Company that shows the sales, cost of goods sold, gross profit on sales, and all costs that can be assigned to the ve customers. Include the cuomer profitability ratio for mch customer and the company. Make sure you use cell references to make all your calculatiors 2. What type of actions might the company take as a result ofthis analysis? You need to specilical reference the different customers in the analysis you have )erfom'ied in your answer to this question. Solution: Make sure you use cell references to make all your calculations. Sales 5 15 000 000.00 13 000 000.00 $ 4 000 000.00 $ 5 000 000.00 $ 4 000 000.00 COGS $ 14400 000.00 $ 10400 000.00 5 320000000 $ 4000 000.00 $ 3200 000.00 Gross Prot 5 3600 000.00 $ 2 600 000.00 5 800 000.00 $ 1 000 000.00 5 500 000.00 (A) Expenses Sales Commissions 6% of Sales 55 900 000.00 $ 650 000.00 $ 200 000.00 $ 250 000.00 $ 200 00000 Sales Visits 5 137 600.00 $ 169 000.00 $ 67 600.00 $ 44200.00 5 20 500.00 Product Adjustments 35 25 750.00 $ 45 00000 if; 12 500.00 $ 7 50000 if; 6 25000 Phone and other Remote Contacts 55 33 000.00 $ 53100.00 5 27 000.00 $ 20 700.00 $ 15 600.00 Promotion and Entertainment 5 114600.00 $ 92 400.00 $ 103 600.00 $ 25 200.00 $ 14 000.00 Corporate Jet @ $900 per hour $ 21 600.00 $ 32 40000 SE 4 500.00 $ - $ 5 400.00 Total Expenses 55 1 235 950.00 $ 1 041 900.00 5 41520000 $ 347 600.00 $ 262 05000 Customer Protability $ 2 364 050.00 $ 1 555 100.00 $ 354 600.00 $ 652 400.00 $ 537 950.00 Customer Protability Ratio [ProtJ'Sales * 1 00] 13.13% 11.99% 9.62% 13.05% 13.45% Sales Visits 137 800.00 169 000.00 67 600.00 44 200.00 20 800.00 5 439 40000 Product Adjus1ments $ 28 750.00 5 45 000.00 $ 12 500.00 5 7 500.00 $ 6 250.00 5 100 00000 Phone and other Remote Contacts 5 33 000.00 $ 53 100.00 $ 27 000.00 $ 20 700.00 $ 15 600.00 $ 149 400.00 Promotion and Entertainment $ 114 800.00 $ 92 400.00 $ 103 600.00 $ 25 200.00 $ 14 000.00 5 350 000.00 Total 3 314, 350.00 8 350,500.00 8 210,700.00 8 97,500.00 8 55,550.00 3 1,030,000.00 2. The customer profitability is the profit the rm makes from sewing a customer for a time duration; it applies a relatively simple math formula to calculate revenues minus their expenses for each customer. In this calculat