P.12.11 The new Controller of Bharti Telecom (BT) has discovered that BTs customers differ greatly in their ordering pattern and interaction with BTs sales force. He feels that BTs costing system does not accurately assign marketing, distribution and selling expenses to customer. He has developed an ABC system to assign these expenses to customers. He has identified the following marketing, selling and distribution costs for two customers, Alpha and Beta. Alpha Beta 1 Travelling by sales representatives 236,000 21,68,000 2 Servicing customers 60,000 4,40,000 3 Handling customer orders 4,000 48,000 4 Shipping to customers 96,000 2,88,000 196.00 9,44,000 j14 (Contd.) The following additional information is available: 1 Sales 1720.000 14.00,000 2 Cost of goods sold 8.80,000 6,20,000 REQUIRED: (a) Using the current costing approach of assigning marketing, selling and distribution expenses to customers using 33 per cent of sales revenue, determine the operating profit of the two customers. (b) Using the ABC information provided, determine their operating profits. (c) Which of the two methods produces more accurate assignment of marketing, selling and distribu- tion expenses to customers? Explain