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PARTS 1&3 ONLY PLEASE Feather Light manufactures optic cables for the telecommunications industry. The cost management staff have just completed a customer profitability analysis, at
PARTS 1&3 ONLY PLEASE
Feather Light manufactures optic cables for the telecommunications industry. The cost management staff have just completed a customer profitability analysis, at the request of the marketing manager. The following information forms the basis for the analysis: Customer-driven activities Cost driver Cost driver rate Sales activity Sales visits $2 000 Order taking Purchase orders 400 Special handling Units handled 100 Special shipping Shipments 1 000 Cost driver data for two of Feather Light's major customers for the most recent year are as follows: Customer-driven activities Caesar Stream NeroCom Sales activity 8 sales visits 6 sales visits Order taking 20 purchase orders Special handling 600 units handled Special shipping 20 shipments The following data relates to those two customers: Caesar Stream NeroCom Sales revenue $380 000 $247 600 Cost of goods sold 160 000 124 000 General selling costs 48 000 36 000 General administrative costs 38 000 32 000 Required: Page 751 1. Prepare a customer profitability analysis for CaesarStream and NeroCom. 2. Prepare a customer profitability graph, similar to the one in Exhibit 15.14 3. Comment on the relative profitability of the two customers. , for the two customersStep by Step Solution
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