My Home X CengageN X Course He X Course He X Course He X * Course He X Course He X Course He X Course He X + X A v2.cengagenow.com/ilmn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false To CHAPTER 18 1 eBook Show Me How Print Item Activity-Based Costing and Customer Profitability 1. EX. 18.01.ALGO ? Metroid Electric manufactures power distribution equipment for commercial customers, such as hospitals and manufacturers. Activity-based costing was 2. EX. 18.02.ALGO used to determine customer profitability. Customer service activities were assigned to individual customers, using the following assumed customer service activities, activity base, and activity rate: 3. EX. 18.03.ALGO Customer Service Activity Activity Rate 4. EX. 18.05.ALGO Activity Base Bid preparation Number of bid requests $420 per request 5. EX. 18.10.ALGO Shipment Number of shipments $90 per shipment 6. EX. 18.11.ALGO Support standard items Number of standard items ordered $30 per std. item Support nonstandard items Number of nonstandard items ordered $180 per nonstaitem 7. EX. 18.12 Assume that the company had the following gross profit information for three representative customers: 8. EX. 18.20.ALGO Customer 1 Customer 2 Customer 3 9. EX. 18.19 Revenues $130,000 $210,000 $180,000 10. EX. 18.21 Cost of goods sold (81,900) (113,400) (90,000) Gross profit $48,100 $96,600 $90,000 Gross profit as a percent of sales 370 46% 50% The administrative records indicated that the activity-base usage quantities for each customer were as follows: Progress: 9/10 items Check My Work 3 more Check My Work uses remaining. Previous Next Type here to search O 9 W ? 5:46 PM Rain coming 9/19/2022My Home X CengageN X Course He X Course He X Course He X Course He X Course He X Course He X Course He X + X A v2.cengagenow.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false To CHAPTER 18 7 eBook Show Me How Print Item 1. EX. 18.01.ALGO Activity Base Customer 1 Customer 2 Customer 3 ? 2. EX. 18.02.ALGO Number of bid requests 15 40 60 Number of shipments 25 55 50 3. EX. 18.03.ALGO Number of standard items ordered 20 35 52 Number of nonstandard items ordered 6 65 85 4. EX. 18.05.ALGO 5. EX. 18.10.ALGO a. Prepare a customer profitability report dated for the year ended December 31, 20Y8, showing (1) the operating income after customer service activities, (2) the gross profit as a percent of sales, and (3) the operating income after customer service activities as a percent of sales. Prepare the 6. EX. 18.11.ALGO report with a column for each customer. Round percentages to the nearest whole percent. Metroid Electric 7. EX. 18.12 Customer Profitability Report For the Year Ended December 31, 20YS 8. EX. 18.20.ALGO Customer 1 Customer 2 Customer 3 Revenues 9. EX. 18.19 Cost of goods sold 10. EX. 18.21 Gross profit Customer service activities: Bid preparation Shipment Support standard items Support nonstandard items Previous Next Progress: 9/10 items Check My Work 3 more Check My Work uses remaining. 9 5:47 PM Type here to search O W ? Rain coming A 91 9/19/2022My Home X CengageN X Course He X Course He X Course He X Course He X Course He X Course He X Course He X + X A v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false To CHAPTER 18 1 eBook Show Me How Print Item 1. EX. 18.01.ALGO Cost of goods sold ? 2. EX. 18.02.ALGO Gross profit Customer service activities: 3. EX. 18.03.ALGO Bid preparation Shipment 4. EX. 18.05.ALGO Support standard items 5. EX. 18.10.ALGO Support nonstandard items 6. EX. 18.11.ALGO Total customer service activities Operating income after customer service activities 7. EX. 18.12 Gross profit as a percent of sales 8. EX. 18.20.ALGO Operating income after customer service activities as a percent of sales 9. EX. 18.19 b. Interpret the report in part (a). 10. EX. 18.21 The gross profit as a percent of sales indicated that was the least profitable, while was the most profitable. After deducting the activity costs associated with customer service activities, became the least profitable, while became nearly as profitable as Customer 2. The reason is because consumed much more customer service activities than did the other customers. Apparently, ordered nonstandard products that required specialized bid requests. In addition, required more shipments, indicating smaller shipments to a customer's location, rather than a few large shipments. Progress: 9/10 items Check My Work 3 more Check My Work uses remaining. Previous Next Type here to search O W ? 5:47 PM Rain coming ~ 9: @ 9/19/2022